The House Education Committee reviewed a bill, H.630, on Tuesday that would allow for cooperative education services to be provided by a group of school districts. These services would be intended to provide the “least restrictive environment” for students that require a “higher level of care.” Most of the students who would receive these services have mental or behavioral issues that are disruptive in the normal school environment. Today many of these students have 1-on-1 para-educators which does not provide the necessary level of therapy and contributes to classroom disruption and high staffing ratios.

February 20, 2024

House Ways & Means Committee,

We agree that the ‘Who Pays’ report showing that our state’s tax burden is flat, and even slightly regressive, for taxpayers with incomes in the top 40% is concerning. Middle class Vermonters are struggling to make ends meet and inflation, taxes, and other impacts on cost of living have not been kind to them. Learning that they also shoulder an outsized share of the tax burden adds insult to injury. It is also important to highlight, as the report authors did, that this distribution of tax burden is not because our income tax system is inadequately progressive, but rather that we have a number of other taxes that are quite regressive.

Heather Bouchey (Interim Secretary, Agency of Education) and Nichole Lee (Director of Finance, Agency of Education) joined the Senate Finance Committee on Tuesday to discuss the cost drivers in education spending. The survey was put out in the field mid-January and most results came back in late January and early February. The survey sought to understand what districts are spending money on this budget cycle that may be driving the $230M in new spending. Lee identified rising health care premiums, the “ESSER cliff” as federal funds go away, capital construction projects, salaries & benefits, and inflation as primary reasons for spending increases.

Meagan Roy (Superintendent, Washington Central Unified Union School District (U32)) spoke to the House Education Committee on Wednesday. She has held leadership roles at school districts of varying sizes and understands the conversation is “cost containment” and the conversations around education funding issues need to deal with that issue. It is a polarizing subject, she noted.

Noah Ampe (Legislative Intern, University of Vermont) presented some findings for the House Education Committee of his research about education statistics from other states.

I had an opportunity to testify to the Senate Finance Committee on Wednesday regarding this year's historic property tax increase. Even though it may not have been new material for the Committee, I thought it was important to cover the basics on what is contributing to the surge in property taxes this year. This is not a new problem, schools have increased spending $900,000,000 over the past decade and are projected to spend up to another $240M this year. We have the second highest cost per student in the country, and lowest student/teacher ratios by a mile. Our problem is spending.

National average student/teacher ratio is 15, Vermont's is 10.8

The Joint Fiscal Office reviewed the Education Fund stabilization reserve for the House Ways & Means Committee on Wednesday. The reserve is always set at 5% of the prior year’s education spending and is meant to be used if tax revenues miss projections. It also contributes to the bond rating of the state.

Act 127 Fix (H.850) - H.850 was taken up on Wednesday with a walk-through from Senator Cummings on behalf of the Senate Finance Committee. She notified Senators that she would “be a little longer than I normally would because this bill is trying to solve confusion as to what was happening out there with property taxes and school spending… and why taxes were being capped and uncapped.”

The House General & Housing Committee returned to a conversation around setting regional housing targets on Tuesday. Maura Collins (Executive Director, Vermont Housing Finance Agency) had comments regarding the Draft 1.1 that the Committee was reviewing. She was very supportive of the “great changes” regarding the Housing Needs Assessment, with one caveat. She pointed to the Building Homes Together Campaign (Chittenden County) which also set a target but also assumed 25% would be “affordable units.” She noted that in some years that program has come close to meeting the targets but fell short of the “affordable” goals.

On Monday afternoon, the Joint Fiscal Office (JFO) walked the House Appropriations Committee through a fiscal note of H.850, which would remove the 5% property tax cap in Act 127 and replace it with a step-down mechanism to phase in the property tax hit from 2025 over the next five years. They were unable to calculate the impact of repealing the previous transition mechanism because of its “complex and circular nature,” but the new mechanism will cost the Education Fund $30M in FY2025. JFO pointed out that the property taxes will need to absorb this cost unless another funding source can be found.

On Friday afternoon, Chairwoman Cummings started out the Senate Finance Committee’s review of H.850 by stating that further action would be necessary because “the cost per pupil that is going up in a lot of cases, not your actual spending.” Legislators are looking at school budget spending caps but there are different ways of containing costs.

Richard Amore (Planning & Outreach Manager, Department of Housing & Community Development) presented a slide deck to the House Commerce Committee on Wednesday morning.

Lauren Oates introduced a number of colleagues on Wednesday morning to help explain the work they do with Vermont Housing & Conservation Board (VHCB) funding across Vermont. Michael Monte (CEO, Champlain Housing Trust) reviewed a slide deck profiling a number of projects they have worked on. The three projects reviewed will total 1750 homes over time and about 650 will remain perpetually affordable. None of them would have been possible without the support of VHCB.

Chairwoman Ram Hinsdale reminded the Senate Economic Development Committee about the Housing Survey from the HOME Act in order to know “roughly how much housing we are creating through our funding mechanisms.” She preferred to add language to S.311 least referencing a “healthy vacancy rates… about 5% for rental unit vacancy and 23% for home ownership vacancy…”

On Tuesday afternoon, Chairman Conlon kicked off the House Education Committee by stating “we are at a major inflection point, crisis point, crossroads, whatever we want to call it, and we need to start having pretty broad conversations in this committee with people who are big thinkers in this area.” He indicated that they should be thinking about the tools they have available to deal with the major increase in spending on education.

The House Ways & Means Committee pushed through an adjustment this week to Act 127 that would remove a 5% tax rate cap and instead put in a graduated 'step-down' program that phases in the tax rate impact of the legislation over a five year period. This is the first in a series of actions that the Committee is considering to address the historic school spending and property tax increase this year.

The first witness that the House General Committee heard from on Thursday was Chris Donnelly (Director of Community Relations, Champlain Housing Trust) who lead by saying that “the biggest risk we can take is not acting.” He called for “permit reform, Act 250 reform and more in the form of resources to really help low- and moderate-income people.”