Magic in Montpelier
Simulation & Misdirection No. 1:
By the time you read this the House Ways & Means Committee will likely have approved a bill that increases homestead property tax rates by 5 cents and nonresidential property tax rates by 8 cents. It does not appear that large reforms that address the real problems within the Education Finance system will be undertaken.
The consistent state explanation for the rising tax rates is that school districts increased spending. Districts certainly need to work on controlling costs. But the Legislature is failing to take responsibility for its own role in the situation. This is simulation sleight of hand in giving the impression of taking responsibility without actually doing so, and misdirection sleight of hand in directing all attention to the school boards.
The Legislature continues to fund programs that are not education within the Education Fund. The costs of the Income Sensitivity program supporting homeownership and the Current Use program for Agriculture and Forestry account for about 20 cents of the property tax rate.
The Legislature does not have a penalty for rising total education costs, only for the highly refined measure of per pupil equalized spending. I think that this may be because rising staff compensation costs are a primary cost driver. If compensation contracts were frozen from one year to another, costs might be as much as $30 million lower, which is 3 cents on the property tax rate. But it would politically difficult to actually do something about those staff costs, so no cap on overall cost increases has been imposed.
In addition, some of those in power in Montpelier do not really want to lower property tax rates for fear that schools will just spend more. They prefer to allow your property tax rates and payments to go so high that school budget defeats eventually force cost cuts, rather than dealing with the factors under their control listed above.
Simulation & Misdirection No. 2:
The House Education Committee has voted to approve an Education Governance reform bill that would dissolve all existing school boards, school districts, and supervisory unions. The schools will be reorganized into regional unified districts that serve pre-K through 12 and have at least about 1,250 students.
All difficult legal and budgetary questions will be assigned to a special work group to be answered later. Important questions about town voting representation on the new unified school boards, about control of possible school closure, about degrees of school choice, and about how the unified multi-school budgets will be formed and approved - all are unanswered in the bill.
This is a mandatory version of the voluntary Regional Education District proposal from several years ago. All but a few communities said no thank you then, in part because of those tricky unanswered questions. In the face of such potential local opposition passage of the bill through the House and the Senate may be unlikely. So for Legislative leadership to continue pushing it may be both misdirection and simulation sleights of hand. It distracts people from their concerns about rising property taxes by creating concerns about local control, and it allows the legislature to look as if they are doing something about education, even though these governance reforms will likely increase costs, at least in the short run.
Simulation & Misdirection No. 3:
The Administration is refusing to reveal the overdue financing plans for the future state run health insurance plan called Green Mountain Care (GMC) aka "single payer". The reasons given are that this is a hard task and the Governor and his staff want to be sure that they get the plan "right".
So the simulation sleight of hand here is to appear fiscally responsible while actually being irresponsible, and the misdirection sleight of hand is to make it seem unreasonable for anyone to ask for plans that are not complete. But it was fundamentally irresponsible to promise state health insurance to Vermonters three years ago without providing a plan to finance those benefits at that time. To appear to claim the mantle of fiscal responsibility now by taking more time to get the plans "right" after three years is absurd.
The fact that it is now clear that GMC may not reduce costs by as much as expected earlier may create political problems for the still secret financing plan. It is totally possible to come up with a plan to financing GMC with payroll taxes and income taxes. But if we are mostly just substituting taxes for premiums, and some pay more while some pay less, and there can be no claim that most will pay less due to reduced costs -- that may be hard to sell politically.
Some legislators who fervently support GMC are growing concerned that the Administration will abandon it as unworkable after the election. Some who are skeptical of GMC are growing concerned that the financing plan will be brought out and forced through the legislature in 2015 without sufficient analysis to ensure sustainability. I think that Vermonters need to see if the plans are fiscally and politically feasible now, and if not we can pursue alternative health insurance reform paths to achieve the goals of quality, access, affordability, and equity that we all share.
Good intentions are not enough. If people in positions of power claim to support principles of transparency, accountability, and fiscal responsibility, sooner or later magic sleights of hand will not distract from failures to abide by them.
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