Education Op/Ed

Letter to the editor: Two issues with school financing

In my view, there are two basic financial problems with Vermont’s Public Education System. First, the cost per pupil is much too high and not sustainable. Second, approximately 30% of the budget is financed by Sales & Use Taxes. I will discuss each of these problems below.

Vermont’s statewide cost per pupil in fiscal year 2025 is projected by the Department of Education to be $22,953. Spending on direct education costs grew at 8% in 2024 and is projected to increase by another 12% in 2025. Vermont is ranked 4th highest in education spending per pupil among all 50 States according to World Population Review. However, in terms of wealth, Vermont ranks 35th (GDP per capita). They also rank Vermont 49th in state population growth. Lastly, the Tax Foundation ranks Vermont 4th highest in the country in terms of Taxation.

In other words, we are spending a lot per pupil on education, we are a below average state in terms of wealth, we are growing at a very slow rate and have some of the highest tax rates in the county. The picture is clear. We are spending too much on education given our moderate wealth. For example, the four states other than Vermont that spend the most per pupil on education had an average GDP per capita of $93,000, whereas Vermont’s GDP per capita is only $63,000. In effect, we are spending beyond our means.

Further, we are already a very highly taxed state that cannot afford to increase taxes more, especially given our extremely low growth rate. Finally, we are an aging population which is losing our young people to opportunities outside of Vermont. Clearly something needs to change. The path we are on is not sustainable.

The second major financial problem Vermont faces with its education system is its method of financing these education costs. Did you know that almost 30% of our $2.1 billion education budget for fiscal 2024 was financed through Sales & Use Taxes? The remaining 70% was paid for with Property Taxes. This is fine when Sales & Use Taxes are increasing, but the Vermont State Tax Department is forecasting zero growth in this revenue stream for the next fiscal year due in part to our slow growth rate.

When you factor in all of Vermont’s education costs including pension, transportation and meals, the education budget for next year is projected to increase by approximately 9%, or $243 million. Since the Sales & Use Tax stream is projected to remain the same next year, that means that all of this increase in education spending will need to be paid for by increases in property taxes. That is the main reason why our statewide property taxes are projected to increase by 18% even though education costs are going up by 9%.

Further, last year the state used approximately $100 million from its Education Reserve Fund to help pay for the increase in costs. This year there is only about $35 million left in the Fund to cushion the blow, and there will be a zero balance in the Reserve Fund going into fiscal 2026.

In conclusion, it is clear that we need a major change in course. Our education costs are too high, and it is unfair to burden property holders with 100% of the increase in our already too high costs. Increases in property taxes will only make it harder for young people to afford a home and will increase the rate we are losing our young population.

I believe that we need a major revamping of our education system by our state legislators and Education Department. We need to look for ways to decrease spending and look for more equitable ways to finance our education costs. We all want the best school system possible, but we have to be realistic given the state’s financial position.

James Biggert

Addison

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