An Ada County judge took no action Thursday on a school funding lawsuit.
Instead, attorneys from the Oneida School District, the Idaho Department of Education and the Legislature will each have more time to file arguments in the multimillion-dollars dispute.
Oneida sued the Education Department in July. The East Idaho district says it is owed $7.7 million in state money, to offset some costs from a $29 million 2023 bond issue for a new elementary school.
The $7.7 million was supposed to come from a state bond levy equalization fund — which the Legislature eliminated this year, when it passed a complicated new school facilities funding plan. Oneida says the state is still obligated to pay the money promised in 2023, but it says language in the 2024 facilities laws put Oneida’s money in jeopardy.
On Thursday, lawyers argued over a motion to toss Oneida’s lawsuit.
The state’s argument centered on a question of sovereign immunity. In essence, a state department cannot be sued over a law unless it consents to the lawsuit. The Education Department “has done nothing to consent” to the Oneida lawsuit, said James Edward Monroe Craig, a deputy attorney general representing the state.
Craig also suggested Oneida has other ways to pursue its money. For example, Oneida could go before the state Board of Examiners, which reviews claims against the state and makes funding recommendations to the Legislature.
“Suing the Department of Education is not the right way to go about doing what they’re trying to do in this case,” he said.
The Legislature also wants the case dismissed.
Preston Carter, a private attorney representing the Legislature, challenged Oneida’s claim that it has “first in line” eligibility for money from a school property tax relief fund, created by lawmakers in 2023. The fund is designed to give preference for school districts that collected bonds or levies from property taxes – and in 2023, Oneida collected no property taxes to help pay off its bonds.
Carsten Peterson, a private attorney representing Oneida, expressed the district’s frustrations. After the Legislature passed the facilities law, Oneida tried to get the Education Department to resolve the issue — but the district received nothing but “radio silence,” he said.
“This has been a frustrating case on multiple levels for the district,” Peterson said.
Oneida suffered a setback in court a week ago.
Ada County District Judge Jason Scott dismissed an Oneida motion to set aside the $7.7 million while the district’s lawsuit is pending. Instead, Scott allowed the Education Department to distribute $203 million from the property tax relief fund — as planned, and under its original formula.
The payments went out to districts last week. Oneida received less than $500,000, Peterson said.
Scott did not rule Thursday on the motion to dismiss — although, in last week’s hearing, the judge said he was skeptical about tossing out the case.
For now, both sides will make their case on the sovereign immunity question. Oneida will have two weeks to file an argument. The state and the Legislature will have two weeks to respond.
