On January 27, 2016

House Education Committee unanimously votes to raise spending caps

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Vermont’s per-pupil expenditure continues to rise despite a decrease in student population, due to no corresponding cuts in teachers and staff.

By Art McGrath and Bruce Parker, Vermont Watchdog

If Tuesday night’s committee vote is any indication, then it looks like the 2 percent annual spending cap on school budgets mandated by Act 46 will increase by 0.9 percent. The House Committee on Education agreed to the increase unanimously, 11-0, according to House Minority Leader Don Turner. The matter will likely be voted on by the full House early next week.

“I’m very disappointed in the results,” Turner said of the Republicans who voted for the increase. “I had wanted us to stand firm,” saying he worked hard to keep the Republican caucus together and hoped Democrats would join.

The caps were put in place under Act 46 to control ever-increasing education spending. In 2013, Vermont’s per-pupil education spending was $16,377—the sixth highest in the nation. Two years later, that spending had increased to $17,993. Since 1997, Vermont’s student population has plummeted from about 103,000 students to under 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. During that time education spending has doubled.

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

Opponents of the allowable growth rate caps argue the 125 school districts on track to exceed their allowable limit would be forced to cut teachers and staff if caps remained at 2 percent. Proponents of the caps say the caps are necessary to stop property taxes from going up.

As part of the agreement that passed the House committee Tuesday, the amount of school tax  levied under the income-sensitivity mechanism will be lowered from $8,000 to $6,000, Turner said. This will offset allowing districts to increase budgets by the additional 1 percent. Previously, up to $8,000 of income-eligible propertyowners’ income-based school taxes would be covered by the state. That threshold will now be lowered by $2,000. This will raise about $1.6 million and affect roughly 800 taxpayers statewide.

Despite the disappointing committee vote, Turner said he hopes to convince all the Republicans and some Democrats to vote against any tax increase. He noted the payment mechanism agreed to by the committee is not actually part of next week’s bill being voted on, but would have to be included in the tax bill.

The full House may vote on increasing caps as early as Tuesday.

Rob Roper, president of the Ethan Allen Institute, said the purpose of Act 46 was never about controlling education costs but about consolidating power in Montpelier and giving more control to the teachers’ union.

“Taxpayers are getting screwed,” Roper said. “I hope the Republicans and some Democrats can band together to stop this.”

Roper said spending on education had doubled over recent decades despite low inflation and a large drop in enrollment and that spending must be controlled.

Meanwhile, lawmakers in the Senate Committee on Education are taking testimony on a separate bill to repeal the caps. State Sen. David Zuckerman, P/D-Chittenden, sponsor of S.233, claims the current spending threshold is unfair to districts that have little control over budget pressures.

“Each town has unique circumstances. If they’ve got three fewer students one year than the next, that might change their tax rate in a way that makes these caps unworkable. We need a system that addresses it in a more precise way with the variability town by town,” Zuckerman told Vermont Watchdog.

Asked if his bill offers an alternate plan for controlling spending, Zuckerman replied, “It does not, because that would be a fairly complicated process, and we have to give clarity for our communities within a couple days. I’m not sure that level of detail can be worked out that quickly for this year.”

Zuckerman, a candidate for lieutenant governor, said he would be willing to look at other cap approaches if they were more precise in their application. “While I recognize we should be looking at ways to contain and restrain spending, we also need to use a more precision-based approach rather than a broad-based blunt approach.”

Senate committee members are expected to vote on S.233 this week. If approved, a vote by the full Senate could come as early as next week.

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