Can’t afford Vermont

By Jim Parker

So here we are, continuously declining school enrollment, declining revenue from just about all sources and second-home owners finding Vermont unaffordable as a place to relocate and start or relocate a business.

Yes, the second-home owner, before he became a cash cow for education funding, was a dependable source of new business opportunities for Vermont. Now many can barely justify their enormous property tax for which they receive the joy and pleasure of visiting Vermont once in a while. They certainly aren't going to bring their income and businesses here unless retired or their property taxes become income sensitized.

What has happened to our once affordable state? Well, Act 60 happened to it. And then it was modified to Act 68 adding 1 cent of the sales tax to the spending machine.

The following chart shows the top 10 states for school performance. Vermont is number three. Great, but look at the spending relative to the average household income. Is this affordable?

The question that no one is asking: Why has our state school enrollment declined when we are the third best in education outcome in the entire country? The state of Vermont should be attracting young families eager to live, work and raise their children here. But the sad truth is they can't afford Vermont or the income opportunities are much better elsewhere, Massachusetts for instance. Once they leave, the majority don't come back.

What many of the high-performing states have in common is the three-legged stool of education governance.

First leg, definition of an equal education opportunity and a per-pupil budgeted cost. Second leg, funding using a mix of property taxes and general fund revenue. Third leg, accountability for outcome and use of funds.

Vermont has essentially a one-legged stool of equal education opportunity, funding (Act 60/68). We allow the school districts, all 243 of them, to spend as much as they can get away with and the state education committee will raise the property tax rate to fund 68 percent of the cost and the rest from the general fund, sales tax and lottery. By the way, Vermont pays for education with the largest portion coming from property taxes of all the states; most are under 50 percent.

This wake-up call was not heeded back in 2005 when it was obvious that declining enrollment and the near doubling of education spending in nine years was on a trajectory that was not sustainable, but they tried to sustain the spending by increasing the sales tax and earmarking those funds for education. This just made Vermont even less affordable.

Now we are faced with a $118 million shortfall, and CUTS – many cuts.

The JFO, joint fiscal office, keepers of the status quo, where ideas go to die, could have raised some red flags, but, no, there is no evidence they did.

If you ever present an idea to the JFO to modify education spending, like the Adequacy formula used by other states, you will be told that it doesn't meet the requirements of the Brigham decision. This is, of course, ridiculous since there has never been a test of the Brigham decision relative to Act 60/68. It is just their uninformed, unbiased opinion.

So you will now hear a lot about consolidation as the way to reduce spending. There is room for some consolidation, no doubt, but this a little like moving the deck chairs around on a sinking ship. It just won't help reduce spending. The only thing that will reduce spending is a state budget of say $13,500 per student and if a town wishes to spend more than that, then persuade their local taxpayers. Sure, we can still use the distribution of our property taxes to meet the $13,500 per pupil budget as is currently done under Act 60, but spending beyond that would be the local school district's responsibility. This would meet the intent of the Brigham decision of equal education opportunity by defining it and setting a per pupil budget. It would not limit a town from spending more but would add significant downward spending pressure, since it would add more local tax burden directly.

As far as those schools deemed too important to fail due to a remote location or other considerations, well it is all taxpayers' responsibility to fund those in need, not just property taxpayers.

There has to be a legitimate effort to show that Vermont cares about affordability for its citizens or we will continue this decline in revenue and school enrollment. I'm not confident that the governor or Legislature has the will or the skill to do the right thing. Just more talk, more studies, less affordability.

Parker lives in Warren.