Vermont legislative candidates say education funding has to be addressed
Published: 10-18-2024 7:01 PM
Modified: 10-20-2024 7:17 AM |
If political partisanship worked the same way in Vermont as in much of the rest of the country, the state Legislature’s Democratic supermajority could be expected to face tough races this fall. An average homestead property tax increase of 14% would be a perfect issue for Republicans to run on.
But Republicans have been out of power for so long that it’s not clear whether inexperienced candidates can take advantage. Vermont voters tend to look at candidates based more on capability than on party, and Vermont’s school funding system is so complex that it’s hard to impose on it a simple, campaign-ready story.
“The Legislature’s mishandling of this issue ... creates at least a perceived political opportunity” for candidates who would be new to Montpelier, John Carroll, a former Republican state senator from Norwich and former chairman of the State Board of Education, said in an interview. A diversity of perspectives, regardless of party affiliation, makes for more constructive legislation, Carroll said.
No matter who is elected, Vermont’s system of school funding, in place since 1997, seems destined for substantial change, as even Democrats are making clear that the current regime has run its course.
“We have to have a conversation about what public education is,” Rep. Rebecca Holcombe, D-Norwich, said at a recent legislative forum at Norwich Public Library.
Holcombe’s statement hints at the breadth and depth of the issues confronting the state:
■The state’s new pupil weighting law, Act 127, went into effect this year, and while many districts saw big property tax rate increases as a result, others were able to hire new staff to help educate students living in poverty or facing other challenges.
■There is new pressure on Vermont to stop paying tuition to private schools now that religious schools are eligible to receive public funding.
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■The state has an estimated $6 billion in deferred maintenance to address in its schools over the next 20 years. Vermont ended school construction aid in 2007.
■Vermont had the highest increase in home prices from 2023 to 2024 among the 50 states: 12.8%, according to a study by the Federal Housing Finance Agency. The sharp increase influences tax rates from town to town.
Most confounding is that while Vermont’s education spending has risen and its enrollment numbers have declined, student achievement has stagnated. The opposite should be true, Carroll said.
“The raw material that shows up at the school doorstep is as favorable as in any state,” he said in a phone interview. With more teachers and more dollars per student than most other states, Vermont should be at or near the top of national rankings, instead of in the middle.
Against that backdrop, the increase in homestead property tax rates to pay for the current school year landed heavily. In some towns, such as Woodstock, the increase was 30% or more, while others saw smaller increases: Norwich 16.6%, Hartford 15.5%, Sharon 2.5%.
While individual school districts approve budgets, state lawmakers and the governor determine where the funding comes from. Last year, the state used one-time funding in a way that dramatically reduced education tax rates. Less of that money was available to reduce rates this year.
While candidates are able to talk about the problem of school funding, there is no simple solution.
“I don’t know the right answer to that, except to say that our spending continues to go up, even as our number of students decreases,” Charlie Kimbell, a former state representative from Woodstock who’s running again this year, said in an interview.
In addition to higher taxes, Mountain Views Supervisory Union, which comprises Woodstock and six surrounding towns, is trying to build a new middle and high school. A nearly $100 million bond vote failed in March. Without state construction aid, “to put it all on the backs of local taxpayers is really difficult,” said Kimbell, a Democrat.
Some Democrats running for re-election are floating a plan to tax all residential property at the same rate. Vermont’s school funding system generates residential and nonresidential tax rates. Properties taxed under the nonresidential rate include second homes, businesses and apartments. In years past, the nonresidential rate often was higher than the residential one, but in recent years, that pattern has reversed.
“The problem is, we are incentivizing second homes and short-term rentals during a housing crisis,” Holcombe, a former secretary of education in Vermont, said at the Norwich forum.
But even that seems like a stopgap, rather than a solution. “I don’t think that’s the answer,” Kimbell said.
“I don’t think they should go after and attack out-of-state owners,” Kevin Blakeman, a Sharon Republican who’s running for one of two seats in the district Holcombe represents, said in an interview. “It’s a fact of life that some people have more money than other people,” and “that some people work harder than other people,” he said.
Other proposals are similarly small-bore, but seem likely to be part of a larger piece of legislation. The House Education Committee has passed legislation to end the practice of allowing state tuition funds to go to private schools, including religious schools and schools out of state, but it has been bottled up in the state Senate. Vermont districts that don’t operate schools for some grades are allowed to pay tuition. Most students go to nearby public schools or to one of the state’s four traditional academies (Thetford Academy, Burr and Burton, Lyndon Institute and St. Johnsbury Academy), but some go to private schools in Vermont and farther afield, to the tune of around $5 million a year.
“You can’t advocate for out-of-state tuitioning when there’s excess capacity in the public system,” Holcombe said.
How the system might change is so far up in the air as to be invisible to a telescope. With sweeping change in the offing, a great many details will be in play.
Many districts will want to keep the new pupil weights, which lowered tax rates in some towns this year and indicated that some districts have consolidated massive resources.
Fairlee’s school tax rate fell by around 20%, thanks primarily to Act 127. Bethel and Royalton, the two towns of the White River Unified District, saw their tax rates decline by 0.2% and 2.6%, respectively, despite a substantial increase in spending, attributable mainly to rising costs for health insuranc. But also because of new hires that are meant to help the district reach students and families to improve learning.
Act 127 changed how Vermont calculates a school district’s students, providing more money to educate children in poverty, who are learning English or who are in small, more isolated schools. For example, Vershire’s 83 students in the Rivendell Interstate School District are calculated as 172.7 “equalized pupils” under the state’s weighting formula, which helps account for the 7% drop in the town’s education homestead tax rate this year.
Norwich, on the other hand, has become unaffordable for even working-class families, much less poor ones, and the percentage of children in poverty is in the single digits. At the same time, its education property grand list nearly doubled in value from 2007 to 2023, from around $616 million to around $1.1 billion, a sign of a big influx of wealth. Most surrounding towns saw smaller increases in percentage terms.
Even the committee that designed the new pupil weights recommended against applying them in the current funding system, Holcombe noted.
A look at the December 2021 final report of the Legislature’s Task Force on the Implementation of Pupil Weighting Factors confirms: “After six months of research, testimony, and debate, the Task Force found that expanding the use of weights in our current tax equalization formula may not be the best method to accomplish these goals.”
The state’s system of paying for schools was designed in 1997 and was “inherently inflationary,” Holcombe noted. It was meant to give more spending power to districts that had little and to temper the spending of districts that had much. Dropping the new pupil weights into that system made it “hyperinflationary,” she added, as it made it easier still for poorer districts to spend, while districts with more property wealth didn’t want to diminish their schools’ programs. That it happened the same year as another huge increase in health care costs didn’t help.
“Following the weighting could continue on as long as the revenue supporting the big education bill didn’t hammer at the property tax so much,” Rep. John O’Brien, D-Tunbridge, said in an interview.
O’Brien’s district faces two divisions over education funding. Royalton is part of a pre-K-12 district, while the state pays tuition that Tunbridge’s high school students can take anywhere. And while Royalton taxpayers saw a homestead tax decrease, Tunbridge’s saw an 11% increase. It calls out for a broad-based solution.
“Everybody knows this is a huge problem,” O’Brien said.
Nationwide, most state school finance systems tend to work well for about 10 years, said state Sen. Dick McCormack, D-Bethel, who is retiring after serving more than three decades in the Legislature.
Act 60 has outlived its life expectancy by good measure, and now the state has to take a new step. Gov. Phil Scott offered no plan, said McCormack, who was involved in the writing of Act 60. (It’s worth noting that only one Upper Valley lawmaker in Montpelier, Rep. Tesha Buss, D-Woodstock, who isn’t running again, served on an education committee in the last biennium.)
“No plan is a plan to let things just happen,” McCormack said.
In the meantime, “what we’re losing are lower income people for people who are moving in,” he said. As a partial solution, “we can tax the very wealthy more than we are.”
When he served on the State Board of Education, from 2017 to 2021, Carroll said the board often was consumed by routine matters and pressing agenda items rather than how the state was being served.
“We rarely stood back and looked at the strategic direction,” he said. The closest the state has come to talking about the system as a whole was during the consolidations spurred by Act 46.
“We really need to look at the big picture of our schools, the inputs and the outputs,” Carroll said.
His fellow Norwich resident of the opposite party, Holcombe, agrees.
“If we want a strong system of public education, we need to talk about what that looks like.”
Alex Hanson can be reached at ahanson@vnews.com or 603-727-3207.