Don Turner: A chance to reform education funding

This commentary is by Don Turner, a former Republican state representative from Milton, former House minority leader, current Milton town manager, and longtime member of the Milton Fire and Rescue departments. He was a candidate for lieutenant governor in 2018.

Our education funding system is broken. We all know it.

Ever since the passage of Act 60 in 1997 and Act 68 in 2003, Vermonters have been perpetually frustrated with our education financing system. And for good reasons. Vermont has the second highest property tax burden in the nation. Marry that with a declining student population and wild inequality in educational opportunities and outcomes between different regions in the state.

The property tax burden and the declining student population represent the dangerous trends Governor Scott has pointed out, emphasized by his Administration’s calculation that we’re losing (on average) three students every day.

Lou Varricchio/TNR

Don Turner

However, this coming legislative session, we have a real opportunity to fundamentally change the way we fund education in Vermont in a way that will reduce overall property tax rates, reward wise spending decisions, and reduce inequalities.

The root of the problem is the way education is paid for under the Act 60/68 model. Currently, we have a fundamental disconnect between the budgets Vermonters approve and the property tax bills they pay.

The Vermont Department of Taxes estimates that approximately 68 percent of Vermont households are insulated from the full effects of a property tax increase, thanks to the so-called property tax adjustments like the Income Sensitivity program. Put simply, a vote for a dollar more of education spending doesn’t equate to an equal impact on one’s property tax bill.

Compounding this problem is the use of a statewide Education Fund, where the spending decisions of one town impact the property tax rates of another town. In theory, this erodes local control. But in reality, it does much more than that: the Act 60 tax structure encourages spending increases that are unsustainable in the long run. Specifically, the Act 60 calculation of tax rates is based on “equalized per-pupil spending” when only roughly a third of this spending is actually supported by homestead property tax payers. Representative Scott Beck of St. Johnsbury correctly points out that this “has created the undesirable effect of increasing homestead property tax rates for the lowest spending districts and reducing rates for the highest spending districts.” Put simply, our entire education financing system is based on a backwards incentive that drives up costs for low-spending districts.

There are two major steps to address these systemic issues. The first is to reverse the flawed incentive between districts. Rep. Beck has introduced H.198, which would do exactly that by creating a base spending amount for all districts and then apply the tax rate to only spending above the base amount. This would have the effect of rewarding districts that spend realistically, instead of punishing them.

The second step involves confronting the insulating impact of the property tax adjustments (PTAs). We currently spend roughly $170 million total on PTAs. That $170 million is tacked onto your property tax bills.

If we reduce the size and scope of these adjustments, we can both a) more closely align school budget voting decisions with actual tax bills and b) reduce statewide property tax rates across the board. There are a number of ways to find efficiencies in the Income Sensitivity program. A small step in the right direction would be to asset-test Income Sensitivity adjustments, saving taxpayers an estimated $5 to $7 million a year in property taxes. We could also reduce the maximum PTA amount, or cap the upper end of the PTA income threshold at a more reasonable level. In any one of these scenarios, we would both better align incentives and achieve millions in savings for property taxpayers.

Our education financing system is on a trajectory that, if unchanged, will continue to drive up costs and widen inequalities, despite a declining student population. With two simple changes to our education funding formula, we can change course without gutting public school spending, hiking property taxes, or compromising the quality of our education system.

It’s long past time we take these common-sense steps to fix the way we fund education in Vermont. Let’s unite around this effort, instead of continuing to open painful pieces of mail that contain ever-rising tax bills.

Images courtesy of U.S. Census Bureau and Lou Varricchio/TNR

10 thoughts on “Don Turner: A chance to reform education funding

  1. History shows us that changing the method of raising education funds doesn’t improve school performance or lower costs. Property tax indexed to income (i.e. prebates) or a progressive income tax does not address the underlying incentives required to improve efficiency and student performance.

    There is only one way to create the incentive to improve… and it’s not the blind faith that reasonable people will do the best they can because they’re reasonable. For one thing, history also shows us that no one can agree on what ‘the best they can do’ is, let alone what it should cost.

    Again, history shows that the establishment of a marketplace best creates these needed incentives. Willing buyers and willing sellers. Anyone who denies this history is either uninformed or coerced by the need to control the system. As Upton Sinclair so aptly stated:

    “It is difficult to get a man to understand something, when his salary depends upon his not understanding it!”

  2. School consolidation is suppose to reduce costs but it won’t. Another irony to school consolidation is that there will be more school buses driving further distances. I wonder what the climate change extremists think about that? It’s time to either enact a statewide teachers contract and turn education completely over to the state or get rid of the convoluted system we have now where local boards vote on school budgets but the sate everything else.

    It’s time to return the property taxes and school control back to the local towns. Our schools and children were better off when we had true local control.The other various tax dollars that feed the education fund can remain in place and grants be given to smaller schools so they can provide equal opportunities to their students.

    • Keep in mind that local school boards created the education system’s current dysfunction.

      To believe the NEA has little, if any, influence in a school district’s managerial process is to ignore the facts. In my school district, board members were often retired teachers from the very district they directed, some were active teachers in nearby school districts. Spouses of teachers in our school district served on the school board. In other cases, employees of State social service organizations, providing services to the school district, served as board members. Complaints over conflict of interest, including ‘the appearance of conflict of interest, were ignored and overwhelmed by highly partisan annual school district meetings.

      The most glaring conflict of interest remains, however, State Board of Education Legislative Committee Chair, William Mathis. Mathis is, concurrently, the managing director of the National Education Policy Center – an education consulting firm partially funded by the teacher’s unions.

      There is only one way to improve performance and lower costs. See my comment above.

      Ironically, local school boards still have the means to create the needed education marketplace, IF sympathetic board members can be elected.

      16 V.S.A. § 822 School district to maintain public high schools or pay tuition
      https://legislature.vermont.gov/statutes/section/16/021/00822

      If the district doesn’t meet the “unique educational needs” of the student as set forth in 16 V.S.A. § 822 (B), parents have the statutory authority to choose a public school that may best serve the interests of the students; or an approved independent school or an independent school meeting education quality standards… at public cost.

      • The big public education monopoly consistently refuses to allow families to enroll their children in independent schools. They simply label children and claim the independent schools are not equipped to handle the child. The Democrats just sit back and allow this to happen, I guess the promised votes and campaign cash is more important than children.

        • The Democrats, Matt, don’t allow it to happen, they make it happen. Unfortunately, there are Republicans and Independents who ‘allow’ it to happen. Consistently, I’ve put forth a methodolgy to enable School Choice and no one, to date, has addressed the method, let alone offer tangible alternatives. Just saying School Choice is the way to go isn’t sufficient.

  3. Kill about 75% of the state and federal mandates, which have made the classroom teachers the minority of the school payrolls. Cut back on mounds of education blob bureaucracy.

    Tell the state to back off, to return control of our childrens schools to the people who have
    the most skin in the game, the parents, the citizens, the tax payers, the towns and cities.

    Bring us to remember the basics, reading writing arithmetic, sciences, civics, history, citizenship.
    No more special interest interference with our children’s education.

  4. I would make a third change and exempt senior citizens from school taxes. they have paid their way in life, they have no kids in school and have a fixed income. If the weight of school budgets was on the people who have kids, they would be more likely to vote rising budgets down. — Its exactly what a lot of states do.

    • Darned good idea! A friend moved to northern New York because the taxes for seniors was so reasonable. Seniors have paid all their working lives, That is enough

      Exempt senior Vermonters from education taxes

  5. Vermont’s public education system is collapsing under it’s own weight. Not much to be done about it. It is so broken, not just the financing, at this point it is not worth reforming, fixing or saving. The voters of this state have no one to blame but themselves. Hell. The entire state is collapsing under the weight of big government and out of control taxation. For those parents stuck here the idea of homeschooling might be something to consider it.

    Time to hunker down and ride it out or just leave.

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