An Ada County judge has tossed out a multimillion-dollar school funding lawsuit from Eastern Idaho’s Oneida School District.
Monday’s ruling means taxpayers in the rural district could be entirely on the hook for a new, $29 million elementary school — without millions of dollars of state money that Oneida was planning to use to reduce the local cost.
The complex July 2024 lawsuit pitted the district against state officials, including the Legislature and the Idaho Department of Education, who successfully argued for the case’s dismissal.
Oneida said it was counting on using at least $7.8 million from a state school bond levy equalization fund to help pay for the school.
When voters approved the bond issue in 2023, the levy equalization fund was intact. Oneida was expecting to receive state payments in August 2024.
But before that could happen, an omnibus 2024 school facilities law eliminated the bond levy equalization fund. A followup law, also passed in 2024, restored bond levy equalization payments — provided a district collected 2023-24 property taxes for bond payments. Oneida collected no such taxes, instead using cash on hand to cover its 2023-24 payments.
The lawsuit centered on the $7.8 million — the state money Oneida expected to receive in 2024. However, district officials said they expected to receive similar payments in 2025 and 2026.
In other words, the district expected the state to pay the bulk of the building costs and bankroll an accelerated repayment plan, wrapping up in 2026.
But Ada County District Judge Jason Scott rejected the district’s legal argument — that the 2024 state laws imposed a new and retroactive liability upon the district.
The Idaho Constitution forbids retroactive laws affecting “the people” of a school district or other local government. Attorneys for the state argued that this language is designed to protect individuals, not government bodies, and Scott agreed.
“No school district or other political subdivision is ‘the people,’” Scott wrote in his ruling.
Scott noted that school districts can sue over other constitutional issues — such as a section of the Constitution that requires the state to maintain a “general, uniform and thorough” public school system. However, that section of the Constitution did not come up in the Oneida lawsuit.
It’s unclear what Oneida will do next, or whether the district will take the case to the Idaho Supreme Court.
“We are disappointed in the ruling but haven’t made a decision yet on the appeal,” Superintendent Dallan Rupp said in an email to EdNews late Friday afternoon.
Attorney General Raúl Labrador hailed the ruling. “We’re pleased the court ruled that Idaho’s elected legislature acted within their constitutional authority to reform education funding programs,” Labrador said in a statement.
