The 2024 session of the Idaho Legislature has been touted as being very generous to Idaho schools, and it was – except for those in Oneida County. Pointedly, Speaker of the House Mike Moyle of Legislative District 10 (Star, Idaho) has been quoted as saying that House Bill 521 would benefit 143 of Idaho’s 144 school districts; the lone exception would be Oneida
School District.

In 2023, Oneida School District asked the voters to approve a bond to build a badly needed elementary school to replace the current 70-year-old building. Three times such a bond had previously failed, largely because Idaho is one of two states that still requires 2/3 approval to pass a bond. In 2023, the School District asked for a bond that would not increase property taxes but was a formality so that the District could access the funds then available for school capital projects through the Bond Levy Equalization Support Program that was established in 2002. This fund was created by the Idaho Legislature to make building projects financially feasible for the school districts in Idaho. Because of no increase in property taxes, the bond passed in March 2023, and the building of the new Malad Elementary School began.

Under the Bond Equalization Program, the first year’s entitlement is not paid until the second year. Therefore, Oneida School District expected to receive approximately $7,672,466 on September 1, 2024.

However, the Bond Equalization Program was repealed in the 2024 legislative session when the Idaho Legislature passed H.B. 521 as a new school facilities and school modernization funding bill. H.B. 521 provided that for fiscal years 2025 and 2026, a school district would receive a distribution from the school facilities fund that would not be less than it would have received under the Bond Equalization Program. Therefore, Oneida School District officials thought the District would still receive its $7.7 million payment in September 2024 (the beginning of fiscal year 2025).

A trailer bill to H.B. 521 (H.B. 766) changed things by stating that a school district must have levied a tax for bonds in property tax year 2023. Oneida School District did not bill taxpayers for bond payments because it had funds available for its share of the new building and thought the State funding would cover the rest of the cost. The State, under the direction of Representative Moyle, interpreted the bill to mean that if a bond did not levy funds, the District would not be eligible for state funding. This interpretation means that the bill is being applied retroactively and applies only to Oneida School District.

Upon the advice of Hawley Troxell, the law firm in Idaho probably most experienced in Idaho school law, Oneida School District filed a lawsuit against the Idaho State Department of Education and the State of Idaho on July 17, 2024, for injunctive relief, claiming that it is illegal to apply a law retroactively when the School District has no opportunity to make changes to a bond that had passed a year earlier. 

In essence, Oneida School District – the only school district in Idaho to which this interpretation of the school funding law applies – is being punished for saving the taxpayers money and for finding ways other than bonds to fund a new school building. Superintendent Jon Abrams and the School Board depended on the Bond Equalization Program funds from the State to be available, not to be suddenly and unexpectedly cut off in a new legislative session.

The lawsuit will be heard in the District Court of the Fourth Judicial District of the State of Idaho, Ada County, on Thursday, August 29.  The timing of the court date is critical because the funds under H.B. 521 are scheduled to be distributed to eligible school district (every district but Oneida), beginning September 1. According to Superintendent Abrams, he hopes that the court will require the State to hold back what would be Oneida School District’s portion of the funding allocation until the matter is completely resolved through the court system.

Should the lawsuit fail, the District will hold public meetings to determine the best way to fund what would have been the State’s portion of the new school building and ball fields. “The school and ball fields will be completed,” emphasized Superintendent Abrams. The payments may have to be stretched out further to allow for other funding to be used for bond payments while not harming other projects needed by the District.

“If people reading this are angry, they should know that I’m angry too,” Abrams said, acknowledging that he felt blindsided by the process.  In his opinion, the district was targeted specifically for this treatment.  “Out of all the districts in the state it affects one—this one.”

Should the initial suit be dismissed, there are further avenues for appealing the decisions down the road, but Abrams hopes that the resolution will be relatively quick.  “Once we get past this first payment, we’ll be fine,” he added.