There have been some very good ideas, and some very bad ideas, over the years about changing the state’s education funding system.
One of the best ideas came more than a hundred years ago, when Gov. William Dillingham proposed a statewide education tax to equalize school resources across the state. Some school districts had tax rates eight times higher than others. In 1890, the legislature approved a 5-percent surcharge on local property tax bills, with the funds redistributed to towns in need. This statewide property tax remained in place until 1931. Repeal was based partly on what legislators came to see as the bad idea behind the tax — its reliance on taxing property rather than income or other assets.
In 1947, Gov. Ernest Gibson Sr. told the legislature the greatest problem facing the state’s education system was “equalizing educational opportunity and distributing the costs as equally as possible among the towns and school districts of the State.”
For the next 50 years, Vermont struggled with the problem that Gibson identified, and with addressing the problem faced by the hardest-hit taxpayers, the income-poor — people deemed “property rich” because they owned a farm or woodlands but earned little income.
The result was a succession of different funding systems and one of the Legislature’s best ideas: the state’s property tax rebate program, which limits low-income Vermonters’ property tax bills to no more than five percent of their incomes, enacted in the 1970s. Twenty-five years later this program was integrated into the funding system with “income sensitivity.” Two-thirds of Vermont homeowners now pay their school taxes based on their income.
One of the worst ideas discussed this legislative session has been elimination of income sensitivity. Despite the rhetoric that legislators were trying to shift more of school costs to the income tax, the long-term impact of eliminating income-sensitivity would have ultimately put us right back where we learned from experience we shouldn’t go – greater reliance on the property tax.
The final tax reform proposal to come before the House, H. 911, avoids the worst changes considered by the House Ways and Means Committee. But the bill as written still has some very bad ideas that are a step backward, not forward, in school funding reform.
The very worst idea of all in H. 911 is eliminating the current direct relation between spending per pupil and a town’s tax rate. Now, if spending per pupil increases by five percent, then the town’s school tax rate goes up five percent. The bill tosses that out. For some towns, tax rates could go up twice as fast as spending per pupil; for others, three times. This type of change does not support local school districts. It causes confusion and frustration.
Town meeting voters got it right this year, and the legislature and governor should listen. School boards did what the governor asked them to do, and then some. Nearly all school budgets passed.
The real “problem” with the current school funding formula is that it has worked better and lasted longer than any other formula. You know that’s the case when opponents trot out the trope that it’s time to review the formula not because a fundamental flaw has been identified but because an arbitrary number of years have passed — and therefore it must be time to open the hood and start tinkering.
We should all be wary of ideas justified by the mantra, “It’s time for a change.” If real reasons for change are identified, real solutions can be discussed and hammered out. That’s when change is justified. But that’s not happening.
The shove from the Vermont Supreme Court in its 1997 Brigham decision moved Vermont a huge distance towards achieving Gov. Gibson’s goal of creating an equitable system for funding schools. Although not perfect, Vermont’s current formula is considered the country’s fairest. Now is not the time for a retreat. H. 911 would be a step back from the achievements past governors and legislatures only dreamed of.
Allen Gilbert was chair of the Worcester school board when it joined the ACLU’s Brigham lawsuit in 1995. He has remained active in education issues.