Ed spending - the issue that won't go away
When Gov. Peter Shumlin spoke loudly last week about the need to control education costs and property taxes in Vermont, people noticed.
His comments to curb spending echoed another public figure, Scott Milne, who came within a few thousand votes of the incumbent governor at the polls in November despite a thin political resume and the disadvantage of being a Republican in a heavily Democratic state.
Milne campaigned for property tax relief and proposed a two-year cap on the property tax rate. He went further by suggesting Vermont chop its $17,500 annual per pupil education spending tab to $12,000, and funnel the estimated $481 million in savings to provide free state college education to Vermont high school graduates.
Despite the dramatic challenge to the status quo, Milne managed to garner many votes, including in Chittenden County towns that typically give the cold shoulder to Republicans. Although Shumlin won more votes, no candidate won a majority and the Legislature will elect the governor in January. Milne has refused to concede and plans to update the press on his plans at a press conference Monday.
Education funding is a perennial issue for Vermont's political leadership and one that can be a major headache. While Shumlin's method of solving the puzzle could be changing, some observers say the current governor has approached the issue in similar fashion to his immediate predecessors Republican Gov. Jim Douglas (who served from 2003-2011) and Democrat Howard Dean (1991-2003.)
"I think they were all interested in trying to distance themselves from dealing with the property tax issue," said Steven Jeffrey, executive director of Vermont League of Cities & Towns.
All three recognized a certain "no win" political factor in the education funding and spending challenge, Jeffrey added.
"They realized that it's a really complicated thing, it's a big thing and that the chances of success and ... having a lot of people happy with the outcome is almost impossible to do in the education funding system."
Still the fact that lawmakers are exploring numerous, significant changes before the Legislature convenes is a sign that there could be substantive change, said Jeffrey, who has argued on behalf of the League that education property taxes are so high they are starving local governments.
Jeffrey noted that the Shumlin administration has delayed the implementation of the universal preschool law for a one year, a move that could indicate new sensitivity to costs.
He's optimistic about the prospect for reforms this legislative session.
"It's not going to be just rearranging the deck chairs on the Titanic," Jeffrey predicted.
The outlook
Shumlin appears to be responding to concern over the property tax burden with comments such as those he made in a statement last week. He and Tax Commissioner Mary Peterson announced a two-cent increase in both the residential and non-residential statewide property tax rates to help pay for a projected 3.09 percent increase in school spending in fiscal 2016.
The governor noted that the tax increases, while substantially lower than those in fiscal 2015, were "no comfort" to Vermonters who have seen property taxes go up year after year. Changes to the funding system are not enough to fix the problem, Shumlin cautioned.
"We need to tackle this first as a spending challenge because education costs have continued to rise faster than Vermonters' ability to pay for it, even though our student count has declined," Shumlin stated.
Shumlin has dispatched his Education Secretary Rebecca Holcombe to the front lines of the offensive to address costs. She's been meeting with school boards and floating proposals including early retirement options for the estimated 600 Vermont teachers who might be deferring retirement.
Vermont's nine to one student-teacher ratio is the lowest in the nation, according to the National Education Association ranking of the states for 2013. The national average is 16 to one.
The Vermont numbers show that schools are not adjusting to demographic changes, Holcombe suggested.
"I think the starkest way to put it is, we've seen pretty much a 20 percent decline in enrollment over 20 years and no decline in staffing...That is the challenge."
Population projections suggest student numbers will continue to decline. Now is the time for school boards to make adjustments in staffing and look at partnerships among schools to possibly share faculty, Holcombe said.
"If they don't, many of them will be in situations where they just wont be able to afford to keep their schools."
Respectable results, big price tag?
There is broad consensus that Vermont posts solid education results, some would say stellar.
Vermont's four-year high school graduation rate is among the highest in the nation. It hit 91 percent and tied with Wisconsin for highest in the nation in 2010, according to the National Center for Education Statistics.
Vermont scores on the National Assessment of Educational Progress (NAEP) standardized tests are often among the top five states. More Vermont students are opting to take rigorous Advanced Placement courses in high school and building the foundation for college.
Critics note that Vermont's achievement gap is not narrowing appreciably and that outcomes for low-income children are much lower than upper income children. They point to other states such as Massachusetts that have made impressive gains and spend less.
Wrestling with education costs is a challenge for every governor. Hence Vermont has traveled through four or five different funding systems since the late 1960s, as noted in a January 2014 report on the Vermont Education Funding System by economists Art Woolf and Richard Heaps.
Looking at education spending going back 20 years, the numbers go steadily up, with spikes that may have more to do with national economic trends and changes in state law than the actions of Shumlin, Douglas or Dean.
State education spending (not counting federal dollars) more than doubled between 1994 and fiscal 2015 from $554.6 million to $1.25 billion, according to the Vermont Education Department. It ramped up significantly (to the six 6 percent annual growth range) from 2000-2003 under Dean's leadership after the passage of the court-ordered Act 60 education funding law that provided property tax relief based on income, equalized property values and made it easier for many school boards to increase spending.
Spending also increased at the 5 and 6 percent rate annually for several years under Douglas and bounced to a 5 percent increase in 2014 under Shumlin, although both Douglas and Shumlin focused on cost controls in the wake of the Great Recession.
State spending actually declined slightly in fiscal years 2011 and 2012, the only time this has happened in the last two decades.
In an interview Friday, former Gov. Douglas said he tried to push cost containment measures almost every year he was in office but usually could not win at the Legislature. "The education establishment is very effective at lobbying and resisting control," Douglas said.
He felt some measure of success with Act 68 in 2003, which included a provision designed to take pressure off the property tax with new sales tax money for education.
"It worked for the first few years but then property taxes starting rising as fast as ever so we didn't put in the cost containment measure that really should have been an essential part of that law," Douglas said.
Carrot or stick?
Fiscal conservatives urge Vermont's political leaders to stop talking. They want actions that would force savings or at least slow what they see as an education tax-and-spend speed train.
The stick approach goes against Vermont's prevailing political culture when it comes to education, which has tended to support carrots, that is incentives, for change over mandates.
Still, cost-saving ideas keep circulating, some more dramatic than others. Among them:
• End the small schools grant program which funneled about $7.4 million in 2013 to Vermont schools. Defenders of the program say it keeps isolated rural schools open so small children don't have to endure long bus rides far from home. Critics say ending the grants would hasten needed much-needed school consolidation.
• Reduce tax breaks based on income. Vermont households earning up to $97,000 annually can qualify for education property tax breaks under state law. Vermont paid out approximately $158 million in property tax adjustments in 2013, according to the Vermont Tax Department. Supporters say the tax break cushions those with lower incomes and two-income families and helps make Vermont's education funding system among the most equitable in the nation. Critics say it is much too generous and that by trimming eligibility voters would be nudged to more scrutiny of school budgets.
• Reduce the cost of teacher health benefits. School districts pay on average about 86 percent of teacher health care coverage, a much higher percentage than many private sector employers pay. The most popular family health care plan for teachers costs about $20,197 and the most popular single person plan costs about $7,665, according to Vermont Education Health Initiative numbers quoted in a report called: "A Situational Analysis of Public Education 2014," by the Vermont School Boards Association and the Vermont Superintendents Association. Trimming these benefits or getting teachers to take on more of the cost could save millions, the report said. Critics say this idea is unfair.
What about the kids?
Other cost cutting ideas include withholding portions of state funding to schools that fail to trim staffing in line with a threshold student-teacher ratio close to the national average; mandating consolidation of small schools and/or school districts; and increasing current penalties on schools that spend above a pre-determined per pupil average.
Many of these proposals have been debated but failed to garner support as different constituencies present counter-arguments.
With a few exceptions, local voters have been skeptical about state incentives for district or school consolidation. And any measure that results in teacher lay-offs or erosion of teacher benefits is likely to meet opposition from the Vermont-NEA teachers union.
"We have some of the best schools in the nation, and I think it's important for us to keep that in mind," said Martha Allen, president of the Vermont-NEA.
School budgets are rising but so is everything else, and it's up to local communities to make decisions about what they want for their children in their schools, Allen said.
Local chapters of the union have fought hard against school board contract proposals that would substantially increase teachers' contributions to health care, although they have accepted small shifts.
Allen said the answer is not to go after teachers' health care benefits.
"Instead of cutting benefits or programs from one population in our state, I think we should all be working together to bring everybody up so everyone has quality health care."
Local control is important when it comes to education, she added.
"We really believe that it's up to the local school boards and the local community to make the decisions that seem to be coming from Montpelier at the moment," Allen said. "It's up to our school boards to decide what we want for our students and what they need to be successful."
Contact Molly Walsh at 660-1874 or mwalsh@burlingtonfreepress.com Follow Molly on Twitter at www.twitter.com/mokawa