On January 15, 2016

Lawmakers return to capitol hill, education spending cap at top concern

By Bruce Parker, Vermont Watchdog

As state lawmakers return for the start of the 2016 legislative session, a fight is already raging over the spending caps in Vermont’s new education reform law — and property taxpayers have a big stake in the outcome.

In 2013, Vermont’s per-pupil education spending was $16,377 — the sixth highest in the nation. Two years later, in 2015, that spending increased to $17,993.

Such spending growth, now the norm in Vermont and borne by property taxpayers, is the reason lawmakers put a spending cap in Vermont’s new education governance law passed last year.

Called the “allowable growth percentage,” the cost containment measure limits statewide spending increases to 2 percent by establishing spending ceilings between 0 percent and 5.5 percent for individual districts. Districts that exceed their threshold will see a double tax on every dollar above their set limit.

But the new spending restraint is already under fire, as unexpected health insurance costs have pushed many districts into penalty territory. The problem is so widespread that some cap opponents are calling for the repeal of the cap. Proponents, on the other hand, argue the cap is working as planned.

“I firmly stand on the caps,” House Minority Leader Don Turner, R-Milton, told Vermont Watchdog. “The caps are the law as we speak today. Anyone who votes to change that is essentially raising school taxes, because we’re going to allow them to spend more — and I don’t support that.”

Turner, who said the cap was the main reason he voted for Act 46, is prepared to fight to keep it when lawmakers return to the capital Tuesday, Jan. 5. Other leaders, including Gov. Peter Shumlin, as well as stakeholder groups like the Vermont School Boards Association and the Vermont Superintendents Association, seek changes.

State Rep. David Sharpe, D-Bristol, says the spending threshold is the No. 1 priority this week for the House Committee on Education, which he chairs. According to Sharpe, lawmakers will weigh four options: do nothing, postpone the thresholds for one year, repeal the thresholds, or increase the cap by 0.9 percent.

“I don’t have any interest in repealing or postponing them for a year, [but] I’m open to other tweaks,” Sharpe told Vermont Watchdog. “We put the high spending thresholds in there for a reason.”

That reason, however unpopular, is to pressure school boards and superintendents to make cuts wherever possible, even if it means cutting the largest expenditure in education budgets: salaries for teachers and staff.

Since 1997, Vermont’s student population has plummeted from about 103,000 students to less than 80,000. No corresponding reduction has taken place with teachers and staff, however, which has led to Vermont’s high cost student-to-staff ratio.

At 4.67 to 1, Vermont’s student-to-staff ratio is the lowest in the nation — well below the national average of 7.8 to 1. According to some estimates, Vermont could save as much as $74 million annually simply by raising the student-to-staff ratio to 5.5 students for every one staff member. Vermont’s student-to-teacher ratio is also the lowest; the average classroom in the Green Mountain State has 9.2 students to every teacher. By comparison, the national average is 15.1 students per teacher.

No matter how unpopular with education leaders, such a modest reduction in staff could halt the astronomical increases that have driven Vermont’s per-pupil spending from about $8,000 in the year 2000 to roughly $18,000 today.

Asked if he thought keeping the cap in place would pressure districts to trim personnel, Sharpe said, “It wouldn’t surprise me if that were necessary in some districts.”

But while Sharpe and Turner appear closely united in wanting to let the new cap do its job, Shumlin has promised to push for changes to the cap. The governor said he wants a fix in January before school administrators finalize budgets and begin preparing for a vote on Town Meeting Day in March.

Regardless of which side wins under the golden dome in the next few weeks, the new school budget environment has set frustrated school district administrators against frustrated taxpayers.

“I’m going to do everything I can to keep what we passed in place and let it play out for two years,” Turner said. “We owe it to the taxpayers to stand firm here and let it play out. Let the school districts go through it one year and see what happens.”

Bruce Parker is a reporter for Vermont Watchdog, bparker@watchdog.org

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