Good Evening Chair Kornheiser and Members of the House Ways & Means Committee,
Thank you for your work in the yield bill (H.949) to try to get Vermont out of the cycle of using one-time funds to buy down property taxes.
As you know, the use of these funds creates funding cliffs in the following years that require further expenditure of one-time funds to fill and undermines the trust of taxpayers who see predictions of massive tax increases unless something is done… eventually there will be no one-time monies available and these predictions will come true. This is a cruel game of musical chairs.
Similarly, this concern also extends to the expanded renter rebate created by the Senate. One-time adjustments create instability and sow distrust. It’s better to create a durable program, or no program at all, than a temporary single-year one.
While we like the Senate’s proposal for lowering the excess spending threshold to put long-term downward pressure on school spending, you have heard significant pushback from districts who drew a short straw in the Act 127 re-balancing of student weights. These districts are in distress today as they adjust to their new funding levels.
A reasonable compromise would include:
- Still spreading today’s available one-time funds over multiple years (perhaps 70% in FY27, 20% in FY28, and 10% in FY29).
- Lowering the excess spending threshold over a couple years instead of all at once. For example, step down to 115% in FY2027, 113% in FY2028, and 112% in FY2029. This allows districts to plan ahead for these changes and absorb them over time.
- Use revenues from excess spending to pay for the expanded rental rebate program, or remove it for the time being.
In concert with the implementation of shared service providers in H.955, this approach could work quite well as districts will have new options to reduce their operating costs well within the timeframe suggested here. This approach weans the state off of the reliance on one-time funds, puts downward pressure on school spending, creates stability for taxpayers, and does so in a timeframe that districts can plan for.
Please continue the pursuit of ending the use of one-time funds in the Education Fund.
Best regards,
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