Pelham: Act 46 is not a solution

The following opinion editorial was first published by Vermont Business Magazine.

Vermonters and taxpayers will be stunned by Act 46 come the fiscal 2017 school budget cycle that starts in earnest this Fall. Act 46 is a poorly constructed legislative initiative of state enforced school consolidation with debilitating effects on effectively managed school districts, both large and small, and resulting in increases in property taxes statewide. Here are just some of the burdens local school boards, parents and taxpayers will face due to Act 46 this Fall through Town Meeting Day.

Higher Property Taxes: Among schools districts that pursue Act 46’s consolidation offer there will be a range of spending amounts per pupil.  Average school spending per pupil among adjacent school districts typically ranges in the thousands of dollars. For example, for fiscal 2016 Calais spends $15,131 per each of its 133 students while neighboring East Montpelier spends $20,160 per each of its 205 students. It is wishful thinking to believe that East Montpelier will allow its spending level to be cut to that of Calais or that Calais will not seek additional spending should they decide to merge. This is especially true given the temporary Act 46 tax rate subsidies that will mask for a few years any spending increases of merged districts.

Given the statewide nature of the property tax system, school districts that decide to preserve their local school and are effectively managed and have no inherent need for consolidation will end up paying higher property taxes to support the higher spending and tax subsidies allowed under Act 46 for school districts that merge, whether or not these merged districts are effectively managed.

Inequitable Spending Caps: The temporary, two year spending caps are a mathematical derivative that is blind to actual school district needs. Historically high spending districts may well absorb the restraints of the cap while a lower spending district may need more than the cap allows due to particularly local circumstances. Local school boards best know local circumstances and are better regulators of the ups and downs of local needs rather than an arbitrary, state imposed cap that allows different school districts access to educational resources regardless of a district’s educational needs.

Further the cap is derived from legislatively manufactured data. For example, “equalized pupils”, a legislatively created substitute for an actual student count, are used in the calculation of the cap. However, across Vermont’s school districts the relationship between “equalized pupils” and actual students varies widely. For example, the number of equalized pupils the state assigns to Lincoln and Moretown, for example, equals 84 percent of actual student counts while the assigned ratios for Rochester and Canaan are 125 percent and 128 percent respectively. Further, the system of “equalized pupils” is based upon confidential information at the Agency of Human Services. Thus, “equalized pupils” calculations cannot be independently verified. Similar problems exist with the legislatively crafted term “education spending”, which across all school districts accounts for only 78 percent of total school budgets.

Given the above, the caps are inequitable. Further, even if they were fair and effective spending controls, they will only exist for two years after which they sunset, returning taxpayers to the same failed, unfair and byzantine system that fosters the current education funding mess.

Bigger Isn’t Necessarily Better: The distribution of school districts by size is not a determinant of student academic outcomes. Anecdotal examples of solid student outcomes at large districts must be acknowledged but so must examples of weak student outcomes at large school districts. In the end, on an overall basis, school district size is not a determinant of student outcomes when viewed across the entire population of Vermont’s school districts. In comparing school district size to academic outcomes, as measured by test scores across all Vermont school districts and using Agency of Education data, Campaign for Vermont found the following:

“NECAP test scores appear unrelated to both school district ADM and Equalized Pupil counts except for a possible very slight relationship for 11th grade math. The Burlington school district with 3,944 students, for example, has test results similar to Royalton with 320 students. Again, this finding does not speak favorably to the concept that large consolidated school district’s offer students greater educational opportunity than smaller school districts.”

“NECAP test scores appear unrelated to levels of total spending per pupil, whether ADM or Equalized Pupils. Eden, for example, spends $20,074 per ADM with 3-8th grade math and reading proficiencies of 56.2% and 62.53% respectively. Pomfret spends about the same at $20,577 but achieves proficiencies of 89.5% for math and 100% for reading.” (link is external)

Further, large school districts are not necessarily better managed. Just look at the largest school district in the state, the Burlington school district, to find an expensive per pupil district ($20,124 per pupil), running large operational deficits and struggling to hire a new school superintendent because of poorly researched work visa requirements.

A Blow to Local Control and Local Democracy: Vermont’s constitution first gives direction to towns to maintain schools with the legislature provided with back-up authority. Article 68 reads:

“and a competent number of schools ought to be maintained in each town unless the general assembly permits other provisions for the convenient instruction of youth”

Once size-fits- all school districts of no less than 900 students were not envisioned by Vermont’s thoughtful founders. Vermont has certainly changed over time but there is no need for the state legislature to now eviscerate local school districts, especially those that are competently run. Whenever possible, local parents and taxpayers should guide the availability of education resources and the associated tax burdens while assuring such conforms to the Brigham decision. Act 46 further separates parents and taxpayers from directly guiding their students’ education as originally anticipated in Vermont’s constitution. The Vermont legislature has engineered an almost complete take-over of Vermont’s education system and its $1.5 billion budget to the detriment of parents and taxpayers.

School Choice Undermined: While school choice has been an option chosen by almost 90 Vermont school districts, Act 46 has muddied the water regarding this option and some might say intentionally so. School choice has been an area of controversy, opposed by some advocates of a public school only system. As this Vermont Digger article with comments reveals, school choice or parts thereof maybe on the chopping block, further undermining options available to parents and students. (link is external)

Act 46 is destructive and detrimental legislation founded upon the false premise that consolidation will yield more cost effective educational outcomes for students. In fact, Act 46 will induce additional spending, increase property taxes, undermine local parent and taxpayer involvement in their school district and isolate and fiscally punish well managed small and medium sized school districts that choose not to merge. Better options were presented to the Legislature but fell by the wayside as so much else has at the State House in recent years.

This commentary is by Tom Pelham, formerly finance commissioner in the Dean administration, tax commissioner in the Douglas administration, a state representative elected as an independent and who served on the Appropriations Committee, and now a co-founder of Campaign for Vermont.

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