The candidates are incumbent Adam Greshin, I-Warren, and challenger Mac
Rood, D-Warren. Candidates were asked to answer a question about how the
state creates the Common Level of Appraisal by which individual state
property tax rates are calculated for each town. Background on a legal
case regarding CLA calculation is provided below, followed by the
questions for each candidate and their answers.
BACKGROUND
In
2002, a superior court judge found that the state's efforts at fairly
assessing the CLA and determining statewide property tax rates fell far
short of meeting the constitutional test of proportional contribution.
In a case brought by the town of Killington, the judge referred to the
state's methodology as being "about as rational as rolling dice" and
concluded that it "resulted in disproportionate and inequitable taxation
among Vermont's municipalities in violation of the constitutional
requirement of proportional contribution."
The state Supreme
Court overturned this decision and supported the state's practice,
stating in part that the trial court had "made no findings, and indeed
took virtually no account of the state's evidence relating to the
reasonableness of its equalization methodology in light of the resources
available," and that the judge "ignored the testimony of state
officials that appraisals were beyond the limited means available to the
Division of Property Valuation and Review." (Emphasis added.) (Town of
Killington vs. Department of Taxes, Docket No. 2002-433) Nothing has
changed in the interim. What other constitutional protection is
conditioned on how much money the state wants to spend on it?
QUESTION 1
How
would you provide the Vermont Division of Property Valuation and Review
with the resources to do a better job, or find a fairer source of
revenue (or better method) than the statewide property tax and Act 60/68
for education funding?
Mac Rood: Act 60/68 has not been good for The Valley. We
can acknowledge that all Vermont children should have equal access to a
quality education, but the tax system devised to achieve that goal has
made The Valley less affordable for middle income working people and
those on fixed incomes. We are losing the diversity of population that
makes our towns attractive.
The connection between school
spending levels and tax rates is not readily apparent to taxpayers. It
is possible for school spending to decrease and tax rates to increase at
the same time. The state applies various formulas to each town's
education spending which adjust our tax rate to satisfy various state
goals. The CLA, if calculated correctly, adjusts our appraisals so that
between town-wide reappraisals our property values are calculated
consistently from town to town. If we continue to fund education through
a state tax system, a correctly calculated CLA is essential. More
disturbing than the CLA are the formulas used to adjust each town's tax
rate based on the state's notion of how much a town should spend. The
tax rate levied on homestead property is adjusted upward if the
residents of that school district spend more than the "base education
spending" amount. The school tax system is gradually being taken over by
the state while responsibility is being left unfairly with our local
school boards.
Under the current state tax system, our
fundamental problem is that we live in an area with high property
values. Acquiring a home is difficult enough, but the annual property
tax burden can be impossible to afford. Property tax is fundamentally
regressive. It does not take into account the ability to pay. The income
sensitivity provision of the current tax system is meant to address
this issue of fairness, but it is not straightforward or easily
understandable. Some taxpayers are not even aware that they are due a
property tax adjustment. I believe that an income tax should be
substituted for the property tax on homesteads (primary residences).
Eliminating the property tax on homesteads and basing the education tax
exclusively on ability to pay would be fairer.
On the question of
resources for the Vermont Division of Property Valuation and Review, I
firmly believe that when the state mandates a program, it should be
funded adequately, presumably from within the funds of the program
itself. I can't presume to question the legal arguments made before the
Supreme Court or know whether at this point there is an opportunity to
re-challenge the outcome if more resources were provided for the
program. Needless to say, many millions of dollars are at stake every
year with the determination of the CLA. The VT Division of Property
Valuation and Review should get it right. To the extent that the Supreme
Court used a lack of resources at the state level to excuse inaccurate
appraisals, that is wrong.
Adam Greshin: The statewide
property tax suffers from several problems, but one of them is not the
method of property valuation. One problem is the magnitude of the tax
that results from the valuation. We spend lots of money on our schools
and our property tax rate is set to raise that money. The more we spend,
the more we pay. A second problem is the extraordinary complexity of
the tax rate calculation. The local tax rate is a factor of local
spending and statewide spending, all boiled down to a per pupil spending
number. (Don't even think about how we calculate pupils.)
In
the old days, if local schools cut spending 5 percent, education taxes
declined by a like amount. Post Acts 60 and 68, if spending is cut,
taxes will probably decline but only if most other towns follow suit,
and the decrease in the property tax bill almost certainly will not
match the decrease in spending. The statewide property tax loosens the
ties between local school spending and the tax consequences of that
spending.
Perhaps the biggest problem of all with our education
funding formula is that there's no evidence it works - if outcomes are
what count. Lousy schools prior to Act 60 are still lousy schools post
Act 68. We've thrown money at the problem, but gaps in educational
quality between towns still remain.
I believe strongly that towns
with property wealth should help subsidize towns without property
wealth. But it's time we restored a greater measure of local control to
school spending decisions. I would return to the notion that the state
should guarantee a base level of per pupil funding to every town. The
level per town could and should vary with demographics and special
needs, but the average level would reflect state and national trends.
Town
school boards could spend more than the base level, but they would have
to face the voters and raise it locally. To raise the money for
education, there's no alternative to the statewide property tax for
vacation homes and businesses, but for homesteaders, I would investigate
an income tax as a replacement for property tax. Income tax has its
challenges - household income calculations aren't much better than
property assessments in determining capacity to pay - but most people
already pay property tax based on income. It's worth investigating
whether the rest should too.
QUESTION 2
Explain how school/school district consolidation could work or would not work locally and in Vermont?
Adam Greshin: The state has adopted a carrot and stick approach to school
consolidation. The stick approach was adopted, wittingly or unwittingly,
with the enactment of Act 60 and the resulting increase in property
taxes. Particularly in small communities, the local school became more
and more costly to maintain. Act 68 added to the financial pressure by
further penalizing high spending schools. The phase out of small school
grants, which will probably occur next year or the year after, will
almost certainly accelerate the trend towards consolidation.
The
carrot approach was launched last session with the passage of Act 153 -
legislation which I didn't support for reasons that have little to do
with consolidation. The legislation set in motion a "voluntary merger
plan" for schools and school districts and provided tax subsidies (out
of the Education Fund) to sweeten the pot. I wasn't wild about the
subsidies but even less enlightened were orders to bolster supervisory
union duties and responsibilities and reduce local control of schools.
This is precisely backwards.
Any credible study of school
consolidation has to begin with administration. We don't need, nor can
we afford, 65 supervisory unions. Appoint a commission, come up with the
right number and then launch a discussion on the roles and
responsibilities of the supervisory union. Curriculum development and
business functions may be best left to the superintendent, but execution
of the curriculum and deployment of teaching resources - the bread and
butter of education - should be left to school principals. Measurement
tools exist, or new ones can be developed, to determine the success of
each school and which schools need additional assistance.
Administrative
consolidation has to be done at the state level, but local school
consolidation should be left to the towns to decide. It's already
happening, primarily driven by the cost of education, but the decline in
the school population is an additional factor. Tying school spending
decisions more directly to the local tax rate and phasing out the
subsidization of small schools will accelerate the pace. In all cases,
the state and the supervisory unions should provide technical assistance
and, when necessary, statutory changes without compromising the
authority of voters to make appropriate choices for their communities.
Mac Rood: The quality of our schools is closely related to local involvement and
local control. I fear that if school districts get too large or too far
away, parents and voters will lose a sense of connection to the schools
and the quality of education will suffer. It is important that school
districts be small enough to foster a sense of community.
Schools
are under enormous pressure to reduce expenditures in order to reduce
the property tax burden on Vermonters. One remedy being promoted is
school consolidation. Any move in that direction should be controlled by
the towns and be at the discretion of town voters. Recent studies in
The Valley have not revealed significant benefits to be achieved from
consolidation. Savings are offset by increased expenditures such as more
busing. But circumstances change. We should study consolidation again
if and when we think there may be educational and budgetary advantages
to be had.
It is important to identify the actual effects sought
with any consolidation. Buildings would not necessarily be eliminated.
In the past our towns had multiple school buildings and locations under
one school board. It would be possible for all existing buildings to
remain in use under one administration. Perhaps there are economies to
be achieved from closer cooperation with other school districts short of
actual consolidation. Vocational education at the high school level is
already an example of that.
We should not overlook the
significant amount of parent and school board volunteer work that might
be lost if school districts became too large, remote or impersonal. It
would be a false savings to consolidate and then add staff to compensate
for lost volunteers.
In the end we should be asking ourselves,
what is the ideal size school? and how far are we willing to have
elementary, middle school and high school students travel to get to
school?
{loadnavigation}
