By Heidi Spear
The front page lead for the Burlington Free Press on February 22, "Small Schools, Big Bills," was quite the attention grabber, but the article that followed was disappointingly light on the facts about why our total education spending per student outstrips all but New York's and why districts like Underhill, which are tightening their belts and spending below the state average, are getting slammed with tax hikes. Board governance and school size are not the key players in the drama of exploding costs. Tax hikes are compounded by the lack of a surplus in the Education Fund, the declining grand list and shifting burden from broad-based taxes to property taxes, but they are not root causes either. Focusing attention in these places distracts us from getting down to solving our real problem driving up spending.
What has got us spending far beyond almost every other state and, more importantly, our means is simple enough to see and address if we look at the data on who spends what. Somehow, those charged with implementing a system to ensure substantially equal access to educational resources and managing our Education Fund seem determined to ignore these details. The reason why communities such as Underhill are seeing double-digit tax hikes despite local fiscal restraint stems from other districts, including medium and large ones, being free to spend way above average spending levels while being taxed far less for doing so.
The state average for total expenditures per student in 2014 was $17,513. The state average for education spending per equalized pupil, the measures by which taxes are raised for spending levels in a community, was $13,548. In Underhill, the voters authorized expenditures of $16,211 per student. They were taxed as if they spent $14,550. So, while they spent below average per student, they were taxed above average. They are not favored by the formula. Other communities are favored by it, however, and to a fantastic degree. Other communities have voted on expenditures per student over double those of Underhill and, while their students enjoy the benefit of all those extra resources, those communities have a lower tax rate than Underhill. This is well worth us all understanding in some depth, so be brave and carry on to delve into a little data and a little history.
According to Agency of Education data, expenditures by district in FY 2014 range from under $10,000 per student to over $30,000 per student, a variance of over 300 percent. Sixteen districts spent under $13,500 per student. Seven of these districts are midsize with between 130 and 801 students and nine of them are quite small with fewer than 130 students. By contrast, we have 13 districts spending over $25,000 per student. Two of these districts have over 1,000 students, four have between 130 and 1,000 students and seven (not all operating schools) have fewer than 130 students. We should note here that the total number of students benefiting from these spending levels were 322 in small schools, 2,225 in midsize schools and 2,380 in the largest schools. In light of this, it makes no sense to just focus on small schools if we want to have an impact on our Education Fund.
It gets more extreme. Four districts currently educate their communities' children at a price tag of over $30,000 per student. Bellows Falls is spending $30,859 for each of its 664 students, Rochester is spending $33,626 for each of its 98, Guildhall is spending $31,328 on each of its 23, and for its two students, Ferdinand funds $35,450 each. Again, not all are operating schools or are able to control these costs locally. However, like all of those spending above $25,000/student, they all get a serious discount on their spending. Like most spending over $25,000/student, these communities were all taxed at a lower rate than Underhill and other communities not favored by the formula.
Naturally, bigger schools that are free to spend at much higher levels at much lower tax rates have a bigger impact on our Education Fund. Essex Community UHSD is a prime example. It spends $28,537 for each of its 1,112 students. Its taxes, following the current Act 68 funding formula, are based upon education spending per equalized pupil of only $14,466. Sound fair to students across Vermont? Sound fair to taxpayers?
I have heard from a Vermont legislator that I can't use the measure of actual expenditures per student if I expect anybody to listen to me in the Legislature. I have been told that the Legislature views these measures as unfair and I must use equalized pupil counts with all its weighting factor adjustments, because it costs more to educate some populations than others. While the latter is surely true to an extent, as actual spending is our problem, how can we get a handle on it if we refuse to look at this data? Also, how can we gauge the impact and fairness of Act 68 in distributing and taxing for resources if we do not carefully consider trends in actual spending per student and, let's be ambitious now, the associated impact on education outcomes?
For certain, the Vermont Supreme Court didn't think these measures were irrelevant. Actual spending per student was used to assess the disparity in access to educational resources in the landmark Brigham v. State decision. In that decision, our Supreme Court ruled that the Vermont Constitution confers the right to education and establishes the state's responsibility to provide for it. It ruled that substantially equal access to educational resources and opportunity is required for all students. It ruled that the local funding and state grant system we used at that time was unconstitutional due to the resulting wide disparities in access. The evidence of the wide disparity, comparative actual spending per student, showed a range of 260 percent. The example of wide disparity the court included in their ruling was that in FY 1994 the district of Eden spent $2,979 per student while the district of Winhall spent $7,726. The Supreme Court tasked the Legislature with designing an education funding system to remedy the problem of substantial inequality.
In FY 2014, the districts of Eden and Winhall both spent over $20,000 per student. While spending levels for these particular districts do not reveal the persistent and growing disparity in access to education resources, they don't obscure the lack of restraint inherent in our current system. Regarding the task set before the Legislature, however, as noted above, our disparities in access to resources have not narrowed. While spending has exploded, disparity has not narrowed but grown to in excess of 300 percent.
It seems that those overseeing our statewide education funding system are not reflecting analytically on what we have achieved and what we haven't, or who is actually spending far beyond what we can afford. In the Burlington Free Press article, Brad James, education finance manager for the Agency of Education, is quoted as saying, "We're spending a lot of money and so the money has to come from somewhere." Well, we aren't all spending a lot of money. Some are spending a whole lot more as the funding formula funnels resources their way at a serious discount to their taxpayers, while the rest of us pay a premium for much lower spending levels for students in our own communities. This has got to stop.
None of the efforts under consideration in the Legislature deal with this issue. Bills that target excess spending only within the framework of Act 68 just further constrain communities already in the crosshairs of our funding formula – not those in which accountability and fiscal restraint are undermined. Bills that tackle shifting tax burden from one bucket to another do only that. They do not contain spending at all. While there are issues with concentration of tax burdening across segments of our population and a very unsteady climb in rates due to our overly complex formula, tackling these issues will not help us contain spending.
Furthermore, the problem isn't the variety of district structures or local boards. As the data noted above highlights, small schools can't solve the problem and shouldn't take the blame or the fall for systemic problems of our own making. There is no correlation in the data between school size and actual spending increases. There is, however, correlation between high spending levels and the degree of buffering from the tax consequences of local spending via the formula itself.
The implementation of Act 68 is seriously flawed to the great detriment of many students, many taxpayers and our community at large as we fail to address it. Act 68 undermines accountability and fiscal restraint. Act 68 was well intended and I applaud the effort and goal of doing right by every student in Vermont. However, we can no longer ignore how Act 68 has totally failed to meet the intended goal, just shifting who wins and who pays, while unleashing spending levels we can't afford.
The main question is the same one I have asked many times now in print: When will the governor, the Legislature and Agency of Education face up to their responsibilities and fix the core problems of Act 68? I think it is high time to ask another question too though. When will the citizens of Vermont start calling them to task for not doing so?
Spear lives in Fayston and is chair of the Fayston School Board.
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