On February 28, 2024

Governor Scott signs education financing bill H.850

Warns Legislature: more work is needed to control costs

Governor Phil Scott signed H.850, an act relating to transitioning education financing to the new system for pupil weighting, on Thursday, Feb. 22. The new law seeks to reduce property tax increases this year, which could reach 20% without action by local school districts, according to Scott.

When signing the bill, Governor Scott warned that the changes would not themselves solve the education funding increases in a letter to the General Assembly.

“To be clear, this bill does not solve our property tax problem,” Scott wrote. “These changes will only reduce rates if school boards adjust their budgets accordingly and local voters support those changes. It’s also important to note the projected spending increase this year is $243 million, so even if every single school board makes adjustments to their budget, we’re unlikely to avoid significant property tax increases. And we should not ignore how difficult the choices that some communities will have to make around staffing, program offerings, and services.

      Governor Phil Scott

“What that means is our work in this area has just begun, which is exactly the same thing I said when I signed S.287 of 2022 — the bill that enacted the 5% cap H.850 repeals. In that same signing letter, I said ‘We also know this bill risks further increasing the cost of our education system in a way that compounds these underlying [inequity] issues — particularly if we continue to see fewer and fewer students alongside annual school budget growth of 3%-4%, on average.’ I called on the Legislature to address the cost pressures this bill added — and avoid adding more costs — ‘before this new formula takes effect’,” Scott’s letter to the General Assembly continued.

“Had the Legislature worked with me to do so, we would all be in a better place today. I feel the same way about my 2017 proposal to rein in rising healthcare costs for school employees and reinvest savings in kids and property tax relief. Or my 2018 five-year plan that would have enacted my 2017 healthcare proposal, phased in a modest increase in the staff-to-student ratio through attrition, addressed unfairness in our income sensitivity formula and added guardrails for towns that can afford to overspend at the expense of those who cannot. Or my recent calls to ensure local voters know the annual per pupil increase they’re voting on and to extend our universal vote by mail process to school budget votes.

“All these ideas have been ignored or rejected. But any one of them would have put us on a better path to a sustainable public education system.

“While I appreciate your commitment in this bill, affirming it is ‘the intent of the General Assembly to address the delivery, governance and financing of Vermont’s education system,’ this bill does not fix it. To be clear, I remain ready to work with you to both improve student outcomes and contain costs to a level Vermonters can afford,” the governor concluded.

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