Quid before Quo

Not only have we seen this movie before, but it has a sequel or two. Maybe more.

It's called education spending and the tax increases they create. Last year, the state legislature pushed through a 5 cent increase in the statewide property tax for residential and non-residential properties to help pay the freight for educating Vermont's youngsters. At the time, that was the largest single year-to-year increase ever in the state funding formula since the passage of Act 60 in 1997, and should have sent alarm bells ringing throughout the halls of the statehouse. And perhaps it did, but even with the luxury of a non-election year - presumably the best time for lawmakers to enact the often difficult but necessary items that come their way - taxes were increased, but without a sufficient meaningful debate or consensus that perhaps the time had come to re-examine how we finance education here and how might we do it better.

That debate may at last be joined when the legislature convenes in January.

The Governor has proposed holding an "education symposium" early in the session, presumably about how to pay for it. And the reality of looking at a base residential tax rate of 99 cents per $100 of assessed property value and a non-residential base tax rate of $1.49 per $100 of assessed property value (this includes commercial property as well as second homes which aren't primary homesteads) may be finally concentrating minds around the thought that these sorts of increases are not, to use that overused word, sustainable.

The big picture problem is that the state is spending more each year on educating fewer students. Everyone understands that some costs at least, go up each year. There re also some programs, like pre-kindergarten education, that have good returns for the investment and should be funded. Deciding what those programs are of course, is where the difficulty starts.

But when those two trend lines - more dollars for fewer students - continue to drift further apart year after year, something has to give somewhere, at some time.

As you drill down through this problem, it becomes clear that one piece of the educational funding formula that needs fixing is the long-identified disconnect that exists when a majority of voters who pass local school budgets at the individual town level are shielded from the full impact of their spending decisions by the income sensitivity provisions of Act 68, the state's current education finance statute. While based on a laudable idea that those who can afford to pay the most should, and that the benefits of a well-educated populace spread far and wide and shouldn't be restricted by the affluence - or lack of it - in certain communities, income sensitivity needs a revisit. The House of Representatives in Montpelier took a run at this last year, but their ideas failed to gain traction in the state Senate.

Currently, those households making less than $92,000 a year, but more than $47,000 (when primary homeowners may qualify instead for a reduction in their assessment, or a rebate on their total property taxes), are protected from the full impact of property tax increases when it comes to education spending. That shifts the brunt of the increases onto the folks in the upper tax brackets many of us would like to join, but the flip side of that is that this affluent slice of the population will see their contributions to Vermont's education spending rise from under 26 percent in 2009 to more than 30 percent in 2015. Not sustainable. These folks can, and do, move elsewhere.

Vermont also pays for its education services through other taxes, such as those on sales, a use tax, the state lottery and transfers from other funds, but those pots of money aren't keeping pace with the growing costs of education. The property tax therefore, is being called upon to pick up the slack. If Vermont wants to keep funding its schools at the clip it has been doing, then income sensitivity has to be scaled back. It would be nice to have the benefits - because there are some - of Acts 60 and 68 combined with a distinct dollars and cents impact at town meeting when local school budgets are voted. That's been an elusive goal, but the one way that may work is to sharply increase the penalties school districts will incur if their per-student spending increases by a certain amount above the state average.

Such penalties already exist, but they need stiffening.

On the other side of the ledger, costs need to be reined in. The easiest way to do that would be to consolidate supervisory unions down from their absurd sixty or so to something more like 20. We've supported this idea before and will again to little avail, but in a state that can't even get its smallest supervisory union, the Battenkill Valley Supervisory Union that serves Arlington and Sandgate, to merge with larger neighboring districts, you've got to wonder where the political will is supposed to come from to implement this relatively benign step. The state's education agency appears to have given up on forcing the BVSU to merge, although the recent puzzling decision of their board of directors to let its current part-time superintendent go after the conclusion of the current school year, and launch a search for a new superintendent would seem like a perfect time to re-open this question. And just so folks in Arlington and Sandgate won't feel picked on, such a study should be launched statewide. For instance, in Rutland, there are four supervisory unions one atop each other - Rutland Northeast, Rutland Southwest, Rutland South and Addison Rutland. How about one - the Rutland Supervisory Union? Education of Vermont's youth is important and no one needs any further reminding that the economies of the future will be knowledge-based and driven by intellectual horsepower. That ranges all the way from the rocket science stuff down to the local service levels. The gold will go to the nations that are the smartest. As a nation, we have much work to do ensuring our schools give their students the best shot they can. But that has to take place within some finite public resources. In the private sector, that cost push would typically inspire new ways of getting things done more efficiently. The same calculus can't always be applied to education, but at some point, the money does run out anyway. Before lawmakers wave through another 5 cent property tax increase, there needs to be some changes made in how that money is raised.


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