Having found that the challenged legislation affects an important substantive right, the Superior Court applied a "middle tier" level of scrutiny consisting of two parts. One, the classification created by the legislation must be reasonable, not arbitrary, and two, it must have a fair and substantial relationship to the object of the legislation in order to satisfy the equal protection guarantees of the New Hampshire Constitution.

Using the middle tier level of scrutiny, the Superior Court ruled that the New Hampshire system of funding public education does not violate the equal protection guarantees of the New Hampshire Constitution.

The Superior Court rejected the school districts' argument that the Foundation Aid statute is unconstitutional because the money provided by the Foundation Aid program "has not been enough to allow the petitioner school districts to provide an adequate education."

While the Superior Court acknowledged that Foundation Aid does not compensate for the lower than average per pupil expenditures in the petitioner school districts, it held that, "equal protection does not require complete equality or exact mathematical equivalence."

The school districts had argued that while they did not seek "horizontal equity" or equal spending on education in each district, the state may not choose to fund education in a way that discriminates because there is a constitutional right to a free public education. The per pupil expenditures of the petitioner districts do not even come close to the state average, let alone that of the comparison districts.

The Superior Court also applied its equal protection analysis to state statutes which require local school districts to fund their schools through local property taxes. The school districts argued that the legislative scheme for funding of public education in New Hampshire is one that has disparate impact on the petitioner students and is not justified by a sufficiently compelling and/or important reason."

The Superior Court stated that absent proof of discriminatory intent of the legislation, the school districts must demonstrate that the claimed disparate impact is attributable to the challenged legislation. The Superior Court stated that the " evidence was equivocal on whether the disparities were attributable to statutory reliance on local taxation."

The Superior Court held that even if the school districts are correct, in that, their students are entitled to an "equitable education," any educational disparities are not so serious that they outweigh the benefits sought to be conferred upon the general public.

The "public benefit" the Superior Court found in the property tax legislation is that it provided all the school districts, even the petitioner school districts, with a "stable and expandable revenue source as well as significant local control over the education offered in local school districts."

The Superior Court agreed with the state that "local control" is a legitimate legislative objective. It rejected the evidence that the petitioner school districts are unable to exercise "local control" because their resources are used to fund state mandates, such as the Minimum Standards and Special Education.