The Governor’s proposal adds costs to the Education Fund that would result in increased property taxes! Once again we see a Governor’s ideas funded on the backs of Vermont property tax payers, by using the education fund to shore up spending from the general fund.
Gov. Scott recognized that there was a budget problem resulting primarily from changes in Medicaid reimbursement from the Federal government. He promised that he would solve the budget problem without raising taxes or fees. That left him with the education fund as the source of revenue to solve the general fund problem. SO… He has proposed adding $135.9 million dollars of costs into the education fund and increasing the general fund transfer to the education fund by $86 million dollars leaving a difference of roughly $50 million dollars.
His plan proposes:
•  Moving the costs of higher education amounting to $89.7 into the education fund.
•  Moving some of the costs of teachers’ retirement amounting to $35 million into the education fund.
•  Moving or increasing funding for child care amounting to $9.6 million to the education fund.
•  Adding funding of $1.6 million in innovation grants to the education fund.
His plan proposes to balance the education fund by:
•  Telling school districts that they can only spend at the 2017 level with a one year exception to raise up to 5 percent additional money on the town grand list.
•  Mandating that teachers must pay 20 percent of their health care premiums. (This savings may not be spent by the local school district).
•  Using one-time revenues. (Violating a promise he made in his inaugural address to not use “one time money”).
Furthermore, in fiscal year 2019 and beyond, 1 percent of education spending would be dedicated to early childhood education and child care while at the same time limiting K-12 education spending for school districts to 2017 levels (without the 5 percent one year exemption, if used). The 2017 spending permitted would be tied to student enrollment. That means if a town lost 1 percent of students it would have to reduce its budget by 1 percent. In addition, the plan reduces income sensitivity for some low income Vermonters.
Why is this a poor solution for a general fund budget problem?
Gov. Scott is proposing to tell school districts from the Governor’s office what the appropriate amount of money a community is allowed to spend on its students. This is a top-down, hard-cap on school spending dictated by Montpelier. Vermonters have not asked for more control from Montpelier, and communities want to determine spending in their own schools.
The proposal locks low spending communities into low spending with future forced reductions in spending and permits high spending communities to continue to spend high as well. If anything this will exacerbate inequalities in our ability to educate our Vermont children.
Since there is no penalty for raising additional spending on the local grand list it brings back the imbalance in funding education found unconstitutional by the Vermont Supreme Court. We would expect a legal challenge.
This proposal also injects the Governor’s office directly into local negotiations regarding teacher contracts. Although the average contribution of teachers’ contribution to health care premiums is 15 percent, the percentage varies greatly from district to district, leaving some districts with wiggle room in the mandate while others would be in jeopardy.
The PICUS report that the Governor used as support for finding savings in educational spending said that we spend about the right amount in regular education for our K-12 system. And that we spend roughly $30 million too much in administration costs, which Act 46 is designed to address. The report also indicated that we spend roughly $140 million too much in special education. The Governor’s proposal is devoid of any suggestions regarding how we can do a better job for less money in special education.
Adding costs to the education fund will raise property taxes not lower them. If the Governor has presented a way to reduce education spending that is palatable to Vermonters it should result in lower property tax rates not as an excuse to use property taxes to fund general fund responsibilities.
Vermont already relies more than two-thirds on property taxes to fund education while the national average is 40 percent. Real education funding reform would move away from reliance on property taxes to provide funding for general government, not rely more heavily on property taxes.
This is a fundamental shift in how we fund education in Vermont. It is a return to a foundation model that was found unconstitutional by the Vermont Supreme Court.
So let’s be clear. Not only does this plan shift costs from the general fund to the education fund in order to cover spending concerns in the general fund; it does it in a way that fundamentally changes the way we fund education in Vermont.
Editor’s note: Rep. David Sharpe, a Bristol Democrat, is chair of the House Education Committee.