Education: Vermont’s Third Rail

It’s no surprise that schools and property taxes are on the minds of Vermont voters. Act 46, with it’s school budget spending caps, mandatory consolidation timelines and new, larger districts is only the latest in a long line of controversial laws that seek to steer Vermont’s rural schools toward higher quality at a lower cost. The call for “something” to be done about property taxes during the  2014 campaign season was nearly universal- especially with declining enrollments in the last decade now putting Vermont’s number of students in K-12 schools below 90,000.

Vermont’s self-appointed savior, Bruce Lisman, was quick to trash Act 46 on VPR’s Vermont Edition and at last night’s first meeting of all five declared gubernatorial candidates. “They asked for change and got a bill that hurts them” he was quoted as saying in Terri Hallenback’s coverage of the event. Voters certainly wanted change, but I think Act 46’s impact on taxpayers and schools varies widely. If you’re a small school like Fairfield Center School, worried about the big impact from a change of one or two students- Act 46’s consolidation can be a boon and smooth out the year over year equalized pupil impacts on tax rates of the current system. If you’re a relatively high-spending school like Saint Albans’ Bellows Free Academy then the spending caps like 1.7% can seem unfair- especially in the face of 8% increases in staff health care costs.

Democrats Matt Dunne and Sue Minter were more nuanced in their criticism of the education reform legislation than Lisman, but clearly would change the spending caps and potentially delay school district merger deadlines. House Speaker Shap Smith defended the law, while leaving room open for tweaks after House Education hears from local Boards and administrators. Lt. Governor Phil Scott supported changing the bill in the new legislative session as well.

This generation’s struggle with efforts to reform the state’s education system began with the Brigham decision and Act 60. “The Equal Educational Opportunity Act” of 1997 sought to equalize school spending across the state, making it possible for schools across the state- especially schools in poor districts- to afford the kinds of opportunities that so-called “Gold Towns” could more easily afford.

The moral imperative to give equal opportunity to every student in Vermont traces its routes back to the state’s Constitution. Section 68 of the Vermont Constitution states “… a competent number of schools ought to be maintained in each town unless the general assembly permits other provisions for the convenient instruction of youth.” 

Clearly, we have a responsibility to provide quality educational opportunities for every Vermont student- even if that may not be at all convenient. The Brigham decision established that those opportunities need to be equal and since 1997 we’ve understood that equality as a kind of spending equity from district to district, town to town. Setting up a statewide financing mechanism so that poor towns can now spend more like rich towns satisfied Brigham’s call for “equality”. As the nearly 20 years since Act 60 have passed, we haven’t come to terms with the idea that equality in spending may not be as closely tied to equality of opportunity to learn and succeed as we had hoped. Act 46 does take real measures to address the disparity of actual learning opportunities- AP classes, languages, music and art that larger school populations can afford and small districts can’t or won’t be able to provide on their own.

When I was in the Legislature in the 2013-2014 session we constantly talked about trying to divorce the financing conversation from the quality side. A Republican Senator once said to me something like “We talk all of the time about property taxes, but the thing we Republicans don’t want to admit most of the time is that our schools are actually pretty good.” There is the rub- we want schools to be cheaper without sacrificing quality. There are some big challenges (and opportunities) here:

  1. The Illusion of local control: Every Vermont school has its own Board and moving to bigger districts would erode a long tradition of local control. Unfortunately federal mandates, like special education requirements and testing, have a lot more control over school budgets than local board members. The percentage of school budgets that really are discretionary at the local level is small. Having a statewide financing mechanism makes this even worse- making the decisions by local school budgets largely disconnected from local property tax rates. Act 46 is an attempt to call a spade a spade on this one.
  2. Income Sensitivity: Most of us don’t pay the full freight of property taxes. Those who own non-residential properties, especially second homes pay the full published penny-rate on those properties but fully two-thirds of Vermonters pay based on income. Someone else pays for the increases when we vote YES on school budgets. The spending caps in Act 46 will make the “pain” of budget increases felt at the district level but it’s unclear to me that this will really act as a deterrent or incentive for voters (See Item 1.).
  3. Small is Beautiful: It really can be- small class sizes are way better for students, and some smaller schools spend less per pupil and perform better than others. Still we have a student to staff ratio that is starting to get laughably small in Vermont. Those very small schools with low per pupil costs typically have favorable demographics (i.e. less families who qualify for free or reduced lunch, parents who are involved in their students’ education). I heard Shap Smith make the case last week that small schools who merge into a district can share teachers, and that will be a cost-savings. I think that’s the biggest thing Act 46 does have going for it.
  4. Healthcare (and other) Cost-Shifting: If Medicaid and Medicare reimbursements were up then we wouldn’t be seeing the 8% increases in private carrier premiums that schools and anyone else who is insured by private carriers is seeing. One of the best cases (that never was made effectively) for Single Payer was that we would stop using property taxes to fill the holes in our healthcare financing system left by lack of support for our publicly-financed payers. There are a ton of non-education expenses built into per pupil costs, and the schools who really get punished are trying to provide services (counseling, health services) that go far beyond the original scope of K-12 spending. Cynthia Browning would probably be surprised to read this but I agree with her repeated lament that we should put non-education costs in the General Fund and get them out of the Ed Fund. Act 46 doesn’t really address this. How could it?
  5. School Choice: Many districts tuition their students to neighboring schools, giving families in those towns school choice. Consolidation may end this practice for many towns/districts, although there are attempts being made to craft hybrid districts that still have tuition options. Act 46 seems to have self-contradicting elements that require some clarification on this issue. Perhaps this lack of clarity belies a muddled legislative intent?

Like Mr. Lisman said on VPR today “It’s complicated.” Vermont’s gubernatorial candidates would do well to stay out of the weeds on this one and talk about their values and the principles that will guide them as the great education debate marches on. Shap came the closest to talking about why he supports Act 46 at the value/principle level, citing his support for equal educational opportunity and real examples of disparities between Vermont schools. People don’t buy what you do, they buy why you do it. The conversation about how best to school our children and pay for it didn’t end with Act 60 and it sure as heck isn’t going to stop with Act 46.

About Mike McCarthy

I'm a guitar-playing Democrat living in Saint Albans, VT with my wife Steph and my daughter Molly. I represented Saint Albans in the VT House in 2013-2014. I care about good government, and a safe, healthier world for all of us. I work for an awesome solar company and love helping Vermonters re-power our communities.

6 thoughts on “Education: Vermont’s Third Rail

  1. Small is beautiful – it’s important to get your facts straight – 74% of schools currently recieving small school grants have childhood poverty rates that exceed the state average. This is based on 2014 free and reduced school lunch data. So much for your claim of
    ‘ favorable demographics’ .
    The illusion of local control – it’s not an illusion because it’s not about control, it is about access, voice and influence in decision making – it’s about democracy. Act 46 goes along way to creating a centralized, removed and standardized system.
    Candidates should stay out of it? I doubt voters will let them, candidates need to be in the weeds on this one, as responsibility for Education is taken seriously in VT. Voters will demand this law be fixed or repealed as the issues raised to date are the tip of the iceberg.

    1. Thanks for the feedback. I was talking about relatively small schools with below average per pupil spending having favorable demographics (like Franklin for instance). We can actually both be right on that one. On local control my point is that it is often only token Democracy because boards have so little control over some of the biggest drivers of budget increases. I’m not singing Act 46’s praises here by a long shot, but I hope this conversation adds something to our collective understanding of how hard it is to get everything we want out of our education system.

  2. Good post Mike. I would add that the idea of sharing staff, administrative functions and other has always been possible. I am not sure why this has not happened to a greater degree than it has over the years, but suspect that there has been little, if any, encouragement to do so from the the Department of Education, now the Agency of Education. Creativity has not been the strong suit of statewide policy.

    1. Agreed. I also thought about referencing your previous post about how big schools are where the big dollars are but the post was already so massive….

  3. Interesting piece. A couple of comments:

    It is interesting to note that apparently 500 teachers have already retired this year and more are expected to do so. This is mostly just baby boomers getting to that point, but part of it is related to the state’s alteration of the teachers retirement system in 2010. At that time it was decided that if teachers worked five more years beyond the earliest retirement age they would get better benefits. Those five years are now up.

    Many of these teachers will need to be replaced, but many will not. Even if they are, the new teachers will likely start at lower compensation levels.

    Suppose that compensation cost is $80,000/year — if there ended up being a net of 500 retirements would be $40 million less and 4 cents less in the property tax rate.

    This would bring up the student teacher ratio that has been used to justify the merger/consolidation push — kind of before mergers have even happened.

    Also, when someone received income sensitivity adjustment to their education property taxes so that they pay based on income, the cost is made up by the Education Fund. The total cost is about $150 million, which is 15 cents on the base property tax bill. If this was taken out of the EF and funded in the General Fund (as it was before Act 60), property taxes would drop and the cost of the subsidy itself would drop significantly.

    Finally, the cost of the property tax reductions rewarding mergers and the merger grants are being paid for within the Education Fund, which of course is mostly property taxes. The state is not putting in extra money for this.

    Thanks for the mention.

    Cynthia B
    Rep. Cynthia Browning, Arlington

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