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School cost containment legislation necessary

06/07/2007

By Scott Mackay, Waterbury

Several articles have appeared in Vermont newspapers recently criticizing legislation adopted by the General Assembly that tries to control local school spending. This legislation will, among other things, require additional votes for certain school districts that increase spending more than one percent above inflation.

Predictably, the Vermont Education Association, the Vermont School Boards Association, and others within the educational establishment have criticized the bill. The arguments against this legislation seem to fall into three categories. First, some argue that there is no spending problem. Second, even if there is a spending problem, it is because of mandates, fuel prices and other "uncontrollable" costs like personnel and benefit costs. Third, some argue that this bill is an insult to local boards and a threat to local control.
    
Some argue that there is no "excessive" school spending because all school budgets have been approved by voters. This group also argues that we, as a state and a society, can never spend "too much" on education.  

Supporters of the cost-control legislation argue that school spending continues to rise at rates well above inflation even though student enrollments statewide are dropping.  They also point to the expansion of employment at local schools to argue that spending is out of control.

To me, the numbers speak for themselves. It is an undisputed fact that school enrollments statewide are falling and school spending is growing faster than Vermont personal income growth. If this trend is allowed to continue unabated, two things will happen: property taxes will go way up and money will be diverted from other areas of the state budget to preK through 12 education.  
      
While some in the educational establishment would have no problem with shifting funds from other state programs to education, or with raising taxes on residents and businesses, the legislature's job is to look at the bigger picture. In order for Vermont to attract capital investment, retain entrepreneurs and employers, and create well paying jobs for young families, the state cannot simply keep raising taxes without being mindful of the impact of these taxes on the economy. Education is very important to the state's economy, but reasonable and sustainable tax burdens are also very important.  

The second argument against this bill is that school boards are not to blame for spending growth. Cost increases are unavoidable because of state mandates, health care cost increases, fuel prices, and other factors. Mandates include federal special education laws and the "No Child Left Behind" law.  

In my view, arguing that the new legislation usurps local control while at the same time arguing that costs are beyond local control is trying to have it both ways.  Private sector companies have these same cost pressures without the luxury of increasing prices on their customers to recoup these additional costs.  Likewise, many family incomes do not grow just because the cost of living does.
      
School costs can be controlled, although it will not be easy and boards will not like the options. School boards can do what the private sector has done: reduce the rate of salary increases, offer less generous health insurance plans or require larger co-payments, and improve energy efficiency. Special education staffs can be directed to find innovative ways to service the needs of disabled children without the need for extensive and expensive one-on-one services. The federal "no child left behind" legislation can simply be ignored if it is costing a local district more money than it is receiving back in federal funds.
      
The bottom line is that school board members - me included - would rather not have to make these tough choices. Most of us run for the school board because we care deeply about education. We want to vote for new programs, not take away programs from kids or fight with local unions about pay and benefits.

Prior to the passage of Acts 60 and 68, the old school governance model provided checks and balances on local school boards because local taxes and spending were so directly linked. The temptation for school boards to create new programs and services was tempered by the fact that local taxpayers would feel the direct hit from board spending decisions. Board members could gauge how and whether their local community could afford these new taxes.

Acts 60 and 68 changed that dynamic. Now, there are so many moving parts that it is impossible for board members to determine how spending increases affect local taxpayers. There is one tax rate for businesses and second home owners. Households with incomes below $47,000 pay a capped amount of school taxes.  Households with incomes between $47,000 and $90,000 pay a different capped amount. Households with incomes above $90,000 pay still another amount. The system is so complicated that board members give up trying to estimate the impact on their local taxpayers.

Acts 60 and 68 provided equity but at the price of local control. Local spending decisions are now divorced from the responsibility of raising the money to pay for them. Is it any wonder that local spending has been growing rapidly?

Which brings me to the third argument against this legislation: that it usurps local control. The truth is that local control barely exists anymore. Federal law dictates special education policy. The state has mandated policies for everything from bullying to smoking to weapons on school grounds. This year the legislature took another whack at local control by mandating a statewide school calendar.  

Now that the state controls the taxes that pay for education in Vermont, I believe the legislature has a duty and a responsibility to set the parameters for local boards to determine budgets. Without state guidance, spending will continue to grow more quickly than Vermonters can afford and legislators will be forced to raise taxes or cut other programs fund education.

Trimming the rate of growth now - and setting reasonable statewide parameters for local spending growth - will help avoid more drastic cuts in the future when property values stop growing at double digit rates and state revenue growth slows down. It will also reduce the likelihood of the type of property tax revolts that California, Colorado, Massachusetts and other states have experienced - sometimes with dire consequences for public education.

The cost containment bill passed by the legislature represents a tiny step in this direction. Many schools in the state - those spending below the statewide average - will be unaffected by the bill. For the others, taxpayers will have the opportunity to express their support or opposition to spending above a reasonable base amount, without casting a vote against the entire school budget. This sounds like a reasonable approach to me.


Scott Mackey of Waterbury chairs the Harwood Union High School Board of Directors. The views expressed here are his own and do not necessarily represent the view of the Harwood board or any members of the board.
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