The lawsuit filed by Oneida School District #351 against the Idaho Legislature and the Idaho Department of Education has been dismissed by Ada County District Judge Jason Scott.  The School District, working with its attorneys at Hawley Troxell, has a short time in which to decide what steps to take next, including appealing the decision to the Idaho Supreme Court.

The lawsuit arose when Oneida School District was denied $7.8 million from the State Bond Equalization Fund that had already been awarded to the District.  That money, which should have been received in August 2024, would have been used to partially pay off the new Malad Elementary School.  The District had also planned on receiving similar payments in 2025 and 2026, thereby reducing the amount of time needed to pay off the new school.

Before the District received its money from the Equalization Fund, the Legislature eliminated the fund.  Oneida School District was the only District negatively affected by this legislative action. The replacement School Facilities Bill restored bond levy equalization payments IF a District collected 2023-24 property taxes for bond payments.  Oneida School District did not collect property taxes, using cash on hand to cover its bond payments.

Instead of being able to pay off the new school in about three years, the District was forced to run an election in 2025 that proposed spreading out payments (collected from other District sources) for at least ten years.  The election did not increase property taxes for Oneida County property owners.

Judge Scott rejected the District’s major legal argument – that the 2024 state law imposed a “new and retroactive liability” upon the District. Attorneys for the State argued that the Idaho Constitution is designed to protect individuals, not government bodies, and Scott agreed. In other words, one State entity cannot sue another State entity.

According to Superintendent Dallan Rupp, he and the members of the Oneida School Board are disappointed in the judge’s ruling as they had thought the District’s arguments were solid.  

Some information taken from Idaho Education News article by Kevin Richert posted on 11/14/2025.