Broken system needs fix
Jan 31, 2014 | 5195 views | 0 0 comments | 354 354 recommendations | email to a friend | print
Vermont has a looming problem, one that many leaders in Montpelier would rather not talk about in direct terms.

No, it’s not health care. That is certainly out in the public domain and well documented, good and bad. The problem is education and, in particular, how to control the cost of funding it across the state. When Act 60 was passed in 1997 the idea was that the state would collect a pool of money from property-wealthy towns and redistribute that money to other towns that had less property-tax revenue to use for education spending. In 2003, Act 68 amemded the original law, and now all towns contribute money to the state education fund, and that money is then redistributed to school districts via block grants based on a number of factors, primarily student population.

The laws are fraught with complexities: prebates are doled out to homeowners with incomes less than $90,000 per year; towns must continually update their real estate grand list; the state continually makes adjustments to those grand lists using what is called the common level of appraisal; and the Legislature ultimately controls the education fund and how much money goes into it from tax revenues other than property taxes.

Education funding in Vermont is big, complex, and not working very well.

Gov. Peter Shumlin has called for local school boards and voters to do more to control spending. In his budget address on January 15 he said, “While I am incredibly proud of the progress we have made together on education, I am not at all happy that Vermonters will once again bear an increase of 5 to 7 cents in the statewide property tax rate next year based upon projections for local school spending. There have been reports of significant school budget increases proposed in communities large and small across our state.”

We find his call to be more than ironic, even a bit disingenuous, because the state is one of the biggest drivers of the costs of education. Unfunded mandates, falling property values, underfunded revenue streams, and the ever-expanding homestead exemption have all contributed to the rise in the statewide property tax rate. This coming year, that rate is expected to jump by 7 cents, and in the 2015-2016 budget year another 5 cents will be added to it.

Local school boards, at least those around here, more than do their part to keep school costs in control.

For example, Dover has been able to keep the school tax rate level with last year, even with the anticipated 7-cent increase on the statewide property tax rate this year. Twin Valley, as reported on page one, is making painful cuts to try and keep costs in line and property tax increases in check. Other local boards also face painful decisions about how to manage their schools’ expenses.

It would be easy to point fingers and say it’s the state’s fault, or it’s the school boards’ fault.

The reality is it’s the system’s fault.

How else could we have had steep increases in school spending during the past 17 years, while the Vermont’s student population has steeply declined?

Taxpayers have become anesthetized to the costs of eduction, in part because of the complexities of how it is funded, and in part because the property tax prebate most homeowners receive reduces the true cost of education. There have been a number of studies recently. Many of them say Vermont’s school funding system is unsustainable.

However, legislative leaders appear loathe to meet the dilemma head on, in part because major populations centers in the state are still coming out ahead under the current system. Why rock the boat and lose the votes?

We have consistently said in this space during the past few years that there will never really be accountability with any statewide funding system until the state defines what exactly it will pay for, and what will be paid for by local schools. When large school districts have to face similar cuts that small ones face every year at budget time, the pressure will start to ratchet up on legislators.

Until that happens, we will continue to be saddened by the governor berating school boards, and the continual struggles those same boards face every year trying to make a broken system work.
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