Tax system not serving Vermont’s rural students
by Legislative Update: Laura Sibilia
Dec 07, 2017 | 907 views | 1 1 comments | 12 12 recommendations | email to a friend | print
Laura Sibilia
Laura Sibilia
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It’s the winter holiday season and for many, a time of year filled with traditions among families and communities. In Vermont we also have a unique tradition that kicks off the month of December. December 1 brings about the annual receipt of the Vermont Tax Commissioner’s statutorily-required letter to the Legislature regarding anticipated property tax rates. This event, while not anticipated with as much fondness as other time-honored religious and secular conventions, is a predictable, if not pleasant, opening salvo in the annual education property tax public debate.

This year, in addition to cumulative expected increases across the state in education spending, tax rates will see the effects of the Act 46 incentives (which will be even higher next year) and the compromise position reached last year regarding the governor’s proposal to move teachers’ health care negotiations to the state level. Rather then seizing the unique opportunity for parity and accountability and the future ability to fairly manage health care costs, the Legislature and administration agreed to use reserves and stabilization funds for a one-year tax reduction.

It’s really not enough to simply continue to be outraged by the property tax. It’s important to dig in and understand how this situation is happening. It’s not simple. And it’s no longer acceptable to beg off being part of the solution because it’s “too complicated.” There are great resources on the department of education, the department of taxes, and the Vermont School Boards Association that explain the mechanics.

For perspective, it’s important to acknowledge that we have a major demographic crisis underway in much of Vermont in terms of declining workforce population which also manifests as declining student population. This crisis is creating a huge stress on our employers, our municipalities, and communities all across the state. We have a state education finance system for which no single entity is accountable, that can not scale equitably, and results in taxes going up statewide and an education structure teetering on the edge of violating Brigham when it comes to student opportunity. (Update: First lawsuit filed.) On top of all this, our entire education governance system is in the midst of complete reorganization through the aforementioned Act 46.

For decades lawmakers and both Democratic and Republican administrations have allowed themselves to believe that equal per-pupil spending is an appropriate measure of equity of opportunity. Think about that. Our laws and funding mechanisms are constructed to strongly encourage a classroom of 10 students to spend the same per pupil as a classroom of 20 students. Not the same per classroom, the same per pupil. Believe it or not, just about every year the Vermont Legislature, with urging from whoever the governor is that year, undertakes an effort to “cut property taxes.” It has almost always revolved around creating downward pressure on per-pupil spending. The problem is this, we simply are not able to equally appropriate all of Vermont’s students into equally sized schools. And so in almost every other year, when elected officials try to cut property taxes, we are instituting cuts that will be felt unequally, unpredictably, threaten program cuts, and frequently cause the most upheaval in Vermont’s most rural districts.

The “tragedy of the commons” describes a situation where a shared-resource system with individual users acting independently – according to their own self-interest – behave contrary to the common good of all users by depleting or spoiling that resource through their collective action. The shared resource at play in this situation is the statewide education property tax. The notion that that resource is controlled locally and a district’s budget decisions only impact that district’s voters is a fallacy. Every budget vote in every district impacts every other district in the state. Businesses owners’ and non-residents’ tax rates have nothing to do with local budget decisions happening in their communities. And while Vermont residents have the ability to control much of their local district’s per-pupil spending, they do not control all of the factors that determine local education property tax rates. We have a statewide education/accountability/tax problem that cannot be solved locally.

The reason for the continued inability for any single district, lawmaker, governor or taxpayer to be able to deal with this tax increase is the current education finance mechanism which relies on all Vermont property tax payers to support hundreds of local decisions. There is no single-year, silver bullet that fixes this without harming kids, despite the annual cries to simply wave a magic wand at the state level and adjust student staff ratios or mandate the lowering of per-pupil spending. For those solutions to be effective, and more important, constitutional, we’d have to have an evenly distributed population, evenly distributed property wealth, evenly spaced out school buildings, equitable access to telecommunications, equitable access to public transportation, equitable access to school choice. And flat roads. We do not have those things and we never will. But our current education funding mechanism presumes most of those things exist. And while the current funding mechanism serves large student and voter population centers, it is not serving rural Vermont students, and it definitely is not providing Vermont taxpayers with a transparent means of understanding the return they are getting on their significant investment. We need a new education financing mechanism. One that is able to provide statewide accountability for all of Vermont’s students and all of Vermont’s taxpayers.

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Kathy Larsen
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December 15, 2017
The rest of Vermont’s lawmakers and our governor would do well to read this analysis. Before trying to solve a problem, one must begin to understand its fundamental causes. This analysis does that.


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