Eric Davis: Dems’ 2016 hopes ride on education bill

Several legislative committees have been working on bills to change Vermont’s system of K-12 education finance and governance. The package is likely to come up for a vote on the House floor soon. While the final shape of the legislation is yet to be determined, the political consequences of the issue have become clearer in recent weeks.
House Speaker Shap Smith, and the Democratic House leadership, have identified passage of a bill that would start a multi-year process of enlarging school districts in order to hold down property tax increases as a top priority for the current legislative session. Smith is concerned that if homeowners do not see some reductions in their school property taxes before the fall of 2016, a revitalized Republican Party could gain additional seats in the Legislature at the next election.
Passage of an education finance and governance bill this year would also enhance Smith’s standing as a potential gubernatorial candidate in 2016. If Gov. Shumlin decides not to run for re-election to a fourth term, Smith is the favorite to be the Democratic candidate for governor next year.
Smith and his fellow Democrats must develop a plan that would bend the property tax cost curve downward without being unacceptable to the Vermont chapter of the National Education Association. VT-NEA has traditionally been one of the Vermont Democratic Party’s strongest supporters, providing both money and campaign volunteers.
The teachers’ union will strongly oppose any plan — such as a mandatory cap on school budget increases — that might result in reductions in force among school staff, constraints on negotiated salary increases, or requirements that school staff pay a larger percentage of their health insurance or retirement contributions. However, with salaries and benefits making up 80 percent or more of budgets in most school districts, education spending cannot be reduced in any significant way without addressing personnel costs.
To date, Gov. Shumlin has not been involved in the process of writing an education bill. He offered no legislative proposals on the subject, and has not had much to say other than to express a preference for bottom-up solutions that emerge from discussions among school districts, rather than top-down legislative mandates from Montpelier.
Shumlin’s education secretary, Rebecca Holcombe, has been trying to facilitate these discussions. She has been meeting with small school districts to encourage them to consider alternative governance structures. Holcombe wants to demonstrate that sharing and consolidation of resources among districts could also improve the range and quality of the curriculum offered to their students.
The Republican caucus in the Legislature is not large enough to have much influence over the final shape of education legislation. However, Republicans have united behind one short-term goal: freezing the statewide property tax rate for 2015-16 by drawing a larger-than-accustomed amount from the Education Fund reserve. This proposal is also attracting more than a little Democratic support.
Drawing down reserves will provide short-term benefits to taxpayers, but it has been criticized by some fiscal experts, such as Tom Pelham, a former official in both the Dean and Douglas administrations. Pelham argues that taking a larger than usual amount from the reserves in 2015-16 will only mean larger tax increases in 2016-17 and beyond, in order to restore the Education Fund reserve to its normal level. On this issue, Republican legislators’ short-term political goals may well conflict with the long-term fiscal health of the state.
Finally, as was the case last year, the Senate will be more cautious than the House about proposals that require small school districts to consolidate. Any House-passed plan with mandatory consolidation and reorganization provisions is likely to be significantly altered by the Senate.
Eric L. Davis is professor emeritus of political science at Middlebury College.

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