In part, H.911 would shift tax collection for education from the property tax to the income tax. This would only be for those who currently pay the homestead property tax, which means commercial properties, landowners, and second-home owners would still pay into the education fund through property taxes.
The bill would replace some of the funding mechanisms created by Act 60 and Act 68. We agree with the basic concept, that Vermont needs a way to pay for schools that is more fair and more transparent. But it also needs a fairer way to distribute money for schools, and needs to acknowledge the realities faced by small, rural schools. Those realities include declining student populations and pressure to reduce costs and cut programs and services.
There’s nothing wrong in principle with dropping the property tax as a way to fund schools in Vermont. Income tax could be a more fair way to do so, and it could be simpler. The problem, according to local representatives Laura Sibilia and John Gannon, is that H.911 doesn’t really accomplish those things. At least not for small, rural communities and school districts.
Basically, it will replace the homestead property tax with an income tax, except when school districts spend above the statewide per-pupil average, which will be set artificially low. Then there would be both an income tax and a property tax. That’s making things simpler?
Also, by setting a per-pupil spending amount so low that just about every district in the state will have to spend above it, the bill doesn’t really create equitable spending between districts. Some districts will spend above that threshold, to either provide more services to their schools or to just meet basic services. Much of that depends on student population numbers. It would also eliminate the excess spending penalty that currently hurts medium-sized districts like Twin Valley and Leland & Gray. That’s a good component of the bill, but it alone doesn’t make the bill palatable.
Don’t get us wrong, we are not big fans of Act 60 and Act 69 funding mechanisms. But H.911 is not going to make it better, especially for rural communities.
Instead of tinkering with how Vermont taxes people to pay for schools, the Legislature should start with a true analysis of the current situation. There are a number of inequities built into the current system, and we don’t see that H.911 addresses very many of them. Gannon and Sibilia have advocated for that kind of analysis, and a year ago were able to get an amendment calling for a rural school weighting study inserted into an omnibus school bill. That study, however, has yet to be undertaken by the Vermont Department of Education. They cite lack of funds and lack of manpower.
Vermonters in general want good elementary and secondary public schools and well-educated students who graduate from them. And in many instances that’s exactly what’s happening. But there are also plenty of places where that is not.
Gannon and Sibilia are not fans of H.911. Gannon expressed his doubts at Town Meetings last month, and Sibilia did the same at a recent Dover School Board meeting They think it will increase pressure on taxpayers, especially low income payers, and won’t help local school districts very much, if at all.
So where is the bill right now? It is in the Senate Finance Committee, and has been sitting there for a few weeks. It may stay there, or it may move on. The bill itself has many detractors, and even if the Legislature does support it as is, the governor has said he may not sign it.
What that means is the bill is on life support, but that doesn’t mean it’s dead. We encourage people to talk with legislators, especially their state senators, about the bill and encourage them to table this one. While there is no doubt change is needed, H.911 doesn’t really offer the help necessary.