Overhaul call falls short
Jan 26, 2017 | 3099 views | 0 0 comments | 319 319 recommendations | email to a friend | print
During last year’s campaign, then-candidate Phil Scott promised to do a lot of heavy lifting to make Vermont a more affordable place to live. He was elected governor in large part by promising to lift the heavy weight of taxes off the backs of average Vermonters. This week he dropped that weight squarely into the laps of Vermont legislators.

In Tuesday’s budget speech, Scott called for “transformative change” that includes restructured departments, restrained spending in state government, keeping property taxes flat, changes to Vermont Health Connect, and a level-funded budget to operate the state in 2018.

He also dropped a bomb, calling for a big overhaul in how Vermont budgets for primary and secondary school spending, and how much money the state spends on pre-kindergarten programs and colleges. Scott called for local school districts to level fund their budgets at 2017 amounts. By doing so, he said, the state could save millions. He would redistribute those savings into early education programs, workforce training, and the state’s colleges.

There is a lot to like in Scott’s approach. Who doesn’t want to see tax rates stable, invest in our children, restrain the growth of government, fight opiate addiction, and make the state more affordable? The devil, as they say, is in the details. While Scott can make some changes through executive action within the administration, it’s up to the Legislature to act on some of the major parts of the plan, including approving the budget and holding the line on tax increases.

Perhaps the biggest concern is that Scott and his staff don’t truly understand the cost drivers that affect statewide property tax rates, and local tax rates. School property tax rates are affected by a number of factors, not just spending. The common level of appraisal, state formulas for student counts and grants, and artificial penalties created by previous laws all can drive up costs for taxpayers, even as local school spending goes down, stays level, or shows a modest increase.

Don’t think so? Just look at what’s happening with the Twin Valley School District. While it may be an outlier, it stands as an extreme example of what happens when a district does everything the state wants, but taxpayers are still faced with significant increases. Readsboro is another example where a school district is planning to cut costs but homestead taxpayers will still see a jump in school property tax rates.

There will be quite a bit of hemming and hawing in the Legislature. Two years ago Act 46 became law, and that was supposed to be the silver bullet that would restructure Vermont schools for the 21st century, and put some controls on spending growth. Of course, the spending growth caps were stripped out of the law after the first year. Which meant that property tax rate increases, which slowed a little during the year the cap was in place, are set to rise again.

Now Scott comes along with a plan that attempts once again to put controls on school district spending in Vermont. That in and of itself isn’t a bad thing.

But as best we can tell, at this point Scott’s plans don’t place any controls on the other factors that drive statewide property tax rates, including the CLA, excess spending penalties, underfunding from other sources, and diverting money from the education fund for other uses. To put the entire onus of high taxes on school spending over-simplifies the problem. There’s no doubt school spending is one component of the problem of high property taxes, but it’s not the only one. If Scott can really move the Legislature to get on board with his plan, they will also have to look at all the other factors as well. Without addressing those other factors, Scott’s plan just won’t work, and the proof is right here in the Deerfield Valley.

It’s amazing that, with 20 years of Act 60 and other education reform laws on the books, political leaders continue to seek simple solutions to complex problems. Education funding reform and governance reform have been holy grails for the past four governors. None have been able to craft a simple, understandable plan to explain and control how we pay for our schools and how our taxpayers support them. Scott’s newest plan, at this point, still doesn’t address some of the root issues of how homestead tax rates are set for Vermonters. Until that happens, meaningful control over school spending will continue to be a weight on the state and its taxpayers.
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