The news is out that we can expect an 8-cent increase for education property taxes in 2018 and a similar increase if you pay by income. This will generate roughly $80 million for the education fund since each penny on the tax rate generates roughly $10 million.
This increase is projected, in large part, due to the significant use in the education fund of “one time” money to buy down rates for this year. One time money is money in a fund that is not expected to be ongoing revenue for that fund. The Legislature generally returns this money to taxpayers by using it in the next budget year. This year we refunded $26 million of surplus money to taxpayers. In addition, the governor insisted that we use reserve funds and the money taken from local school budgets to reduce education taxes this year, leaving a hole of an additional $20 million to fill next year. A 2 percent inflationary factor would require another $30 million. If we fill the hole in the reserve fund and fully fund the obligations of the Education Fund we get to nearly $80 million.
On the other side on the coin, we know that our staff-to-student ratio is low compared to the rest of the country. We probably have too many staff in our schools partly because of how we deliver special education, the number of students that are determined to have special needs and the tiny school nature of our rural state demographics. While we have decreased the number of students overall, we have seen an increase in the percent of students from low-income homes and additional special needs students, including a growing number of students from opiate addicted families. We continue to expect our schools to support these increased students’ needs due to opiate addiction, and other social problems.
Furthermore, every governor every year in the last couple of decades has found ways to move more financial responsibilities into the Education Fund, which is supported by property taxes. Then they propose spending the General Fund dollars made available by this shift on projects they support without raising income taxes. They then campaign on a platform of raising no new taxes, and yet this process has forced property taxpayers to pick up more and more of the tax responsibility of running government. The latest examples to that added burden are reducing the Medicaid reimbursement to schools, plus adding current year teacher pension costs and Pre-K vouchers to the Education Fund. These may all seem logical, but the result is they reduce funds available to spend on K-12 education. This is significant because it looks like schools are not reducing their costs proportional to the reduction in student population.
The question is why? Are we so determined to reduce taxes artificially regardless of what the future consequences are? Or do we want to manufacture artificial crises in order to seek more dramatic reduction on education spending and reduce pay for school employees. I expect to see in the near future calls for caps in education spending and suppression of reasonable wages for school employees. Pressure to increase spending on childcare and higher education will no doubt be brought by the advocates for those ideas which resulted in the governor proposing to do just that by cutting K-12 spending last year.
The Picus Report commissioned by the Legislature to examine education spending reported that we spend about the right amount in K-12 education. They did indicate possible savings in special education and administration, which the Legislature is taking a serious look at. This is an interesting report since the governor and others are critical of the amount we spend on K-12 education. I think it is important to understand that when comparing costs across the nation it is very difficult to ascertain just how much good schools are spending on their student education and other social services. In many private and charter schools, admission policies let them decline to enroll special needs students and parents are expected to either pay additional tuition or fundraise for the benefit of the school.
Another cost driver that I expect to see is continuing double-digit increases in health care insurance. Blue Cross/Blue Shield and VEHI (the school employee’s health care association) underestimated the savings possible by changes in school employee health care. Common sense would say that the BC/BS plan put forth by VEHI and enforced by Gov. Phil Scott is unworkable. That plan held the school employees harmless for out-of-pocket expenses and, at the same time, greatly expanded health care spending in high deductible accounts to include vision, hearing, naturopathic health care and other wellness activities. How on earth does that result in less health care spending overall?
So, I submit, that this is a manufactured crises in order to further the political agenda of Gov. Phil Scott at the expense of our school children as he says “our most precious natural resource.”
Rep. David Sharpe, D-Bristol, is chair of the House Education Committee.