Four shoppers needing a new sedan walk onto a car lot and are greeted by a salesperson who quickly sizes up their wallets — one is poor, one has limited means, one has modest means, and one has means.
The salesperson takes the four on a lot tour, first showing them an economy car — small, efficient to operate, few options and a sticker price of $10,000. An additional premium of $2,500 is required when purchasing the economy car for a total price of $12,500.
Next, the four are shown a mid-size sedan — roomier, more costly to operate, more options and a sticker price of $15,000 with no premium.
The group moves on to the full-size sedan — lots of room, even more costly to operate, lots of options, and a sticker price of $20,000 with a discount of $2,500, for a total price of $17,500.
After a few pleasantries, small talk, and a free cup of coffee, the salesperson asks the four which car they would like to drive off the lot.
The poor person says they will grudgingly take the economy car, but is upset that the price is $12,500 instead of its $10,000 value and comments he would prefer a mid-size, but can’t afford the extra $2,500.
The shopper with limited means complains about the $15,000 cost of the mid-size, but accepts it because they get $5,000 more car for only $2,500.
The shopper with modest means picks the $20,000 full-size because it’s only $2,500 more than the mid-size for a vehicle valued at $5,000 more.
The shopper with means, well, they ask the salesperson where the luxury model is, and is pleasantly surprised to learn that the luxury model has an even larger discount than the full-size — score!
This parable explains how Vermont education homestead tax rates are assigned, and explains in large part why our districts spend nearly twice the national average. Homestead taxpayers from low-spending districts all across Vermont pay rate premiums to provide discounted rates to higher spending districts. The net effect, we have created a lot of high-spending districts to the detriment of our low-spending districts and their homestead property tax payers.
For all of the good that Act 60/68 accomplished across the Vermont education landscape, the glaring weakness has always been cost containment. Act 46 provides a path for many districts to save on administrative costs, but there is no guarantee that districts won’t spend the administrative savings in other areas, and then some.
Some in the Statehouse want to blow up Act 46/60/68. Vermont doesn’t need to. By simply removing the premiums and discounts given to low- and high-spending districts, Vermont can provide meaningful cost containment and increased equity for Vermont’s preK-12 students.