On Friday, Jeff Fannon (Executive Director, VT-NEA) joined the Senate Finance Committee. “Too often the conversations around education revolve around money,” he said, blaming the current education challenges on a “shattered societal safety net, a global pandemic, economic upheaval,” and that schools must be “staffed adequately.” He also pointed to school construction and inflation as additional factors.Read more
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.Read more
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.”Read more
In February 1997, Vermont’s Supreme Court found “the current system for funding public education in Vermont, with its substantial dependence on local property taxes and resultant wide disparities in revenues available to local school districts” is in violation of the Vermont Constitution. In response, in June 1997, the Vermont Legislature and Governor enacted the Equal Educational Opportunity Act—Act 60— a Vermont law intended to achieve a fair balance of educational spending across school districts independent of the degree of prosperity within each district. Act 60 was followed by Acts 68 and 130, which addressed some imbalances caused by Act 60. Acts 68 and 130, established a system to pool the state's educational budgetary requirements from across jurisdictions and pay for them, in part, with pooled statewide property taxes.Read more
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.Read more
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.Read more
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.Read more
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.Read more
Chair Kornheiser and members of the House Ways & Means Committee,
I have worked on education finance and policy issues in Vermont since 2014, including navigating the leadup to Act 46 and its aftermath. The crisis before you today is perhaps the gravest we have seen in decades. Sadly, nearly everyone who is part of the education system is culpable.
The basic facts are that we have more adults in our schools than any state in the country (and it’s not even close), resulting in the second highest cost per student. Over the past decades, we have seen steady spending increases, while staffing levels have persisted. Further, test scores have declined compared to other states who spend less.Read more
Chairman Kornheiser on Tuesday asked Legislative Counsel to walk the House Ways & Means Committee through the new education finance mechanism in Act 127. It sounds like there were some side conversations after last week’s hearings about tweaking the implementation of the legislation.
The law generally redistributed taxing capacity from wealthy and urban districts to poor rural districts. Under the new distribution, two thirds of districts would benefit while one third would see an increase in their tax rate for the same level of spending. A hold harmless mechanism as added that would trigger if a school districts property tax rate increased by 5% or more in FY2025 over FY2024. If a districts tax rate is capped in FY2025, in subsequent years (up to FY2029) they would continue to be capped.Read more