Responsibility for Property Tax Rates

The Legislature is about to set education property tax rates. The rates will likely be increased by about five cents. The justification for this will be that the combination of all the School Board budgets is an increase in total education spending. I do not expect to vote for the proposed increase because I think that it also results in part from Legislative actions that drive up the property tax rates.

It is contradictory that the number of students is declining but staff costs are not. School Boards, teachers, and administrators will need to do better at controlling the costs of staff compensation and reducing the number of staff. But the Legislature must fulfill its responsibility to fully fund its share of education costs, rather than repeatedly adding programs, spending items, and tax subsidies to the costs of the Education Fund, and actually REDUCING the state share of funding.

The central mission of the Education Fund is to finance Kindergarten through 12th Grade education. Usually a governmental entity estimates the revenues and designs the budget to fit. But with education the School Boards collectively set the total spending, and then the Legislature sets the property tax rate needed to raise that money. This process minimizes the effects of fluctuations in economic activity on education funding. All of the revenue from the statewide property tax goes into the Education Fund, along with the state lottery and a certain percentage of General Fund revenue from income and sales taxes.

This process of setting the money to be raised and then setting the tax rate means that if a program, spending item, or tax subsidy is put into the Education Fund, it may not receive the kind of scrutiny that regular budget lines receive, because the tax rate is set to cover all the costs together. The Legislature has added spending for adult education, pre Kindergarten education, education within Corrections, and other items to this fund. Programs like the "Income Sensitivity" support for housing for many taxpayers and the Current Use program for agricultural and forestry lands were also put in there. All of these programs are useful and valuable, but it can be argued that they are not directly K through 12 education. If state policy makers wish to support them, they could have done so outside of the Education Fund. At the very least they could have increased the transfers from the General Fund so that the burden of funding these activities along with K through 12 education would not lie so heavily on property taxes.

But the Legislature has repeatedly failed to properly fund the Education Fund with state money. In the last few years the transfer from the General Fund was recalculated to reduce that transfer in a way that made our current property tax rates about three cents higher than they might otherwise have been. There turned out to be a surplus in the state budget at the end of Fiscal Year 2012, but it went to state projects instead of repaying the Education Fund for the reduced General Fund support.

I therefore find the record of Legislative stewardship of the Education Fund irresponsible in adding costs, reducing support, and blaming others for high property tax rates for which the Legislature bears some responsibility. In the long run I will be working to reform these processes. And in the long run, our School Boards will have to continue to reduce costs and to consolidate our educational capacity.

But in the short run, the Legislature has to set the property tax rate now. I will be working to find funding for additional General Fund transfers to the Education Fund that would reduce the required property tax rate increase. This is the responsible thing for the Legislature to do.

I continue to hold my regular legislative office hours at Chauncey?s on Rte 7A every Saturday from 8 to 9:30 a.m. On Saturday March 2nd only, the day of Manchester's Town Meeting, I will also be at Sherrie's Café on Rte 11/30 from10:30 to noon. Please stop by to discuss policy issues or contact me at 802.375.9019 or .


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