Education funding and the Act 46 thresholds

By Rep. Kate Webb

Act 46, passed last spring, made amendments to education funding, spending and governance. After initial shock and confusion, districts around the state began having substantive, informed and serious conversations on how we educate our children with scarce dollars. As with most new laws, unintended consequences emerge and the legislature must grapple with those consequences. One issue that has risen to the top in terms of urgency is the impact of the “allowable growth thresholds” or AGT’s, often erroneously referred to as “caps.” A cap is a barrier whereas this threshold is a line that may be crossed but incurs financial penalties. In this case, for every dollar over the AGT, the district would need to contribute equal dollars to the Education Fund.

Testimony at the Statehouse last week, including that of our own CSSU, provided a sharp reminder of the uniqueness of each public education delivery system in the state. Interestingly, the challenge of meeting the allowable growth threshold is not associated with the type or size of a district, however those with increasing enrollment seem to fare better than those with declining.

A majority of school boards have responded by reconsidering spending decisions and crafting budgets that come in below the AGT. On the other hand, approximately 127 districts are finding it very difficult to do so and current calculations put an aggregate $9.5 million in penalties at stake for these districts.

Four major legislative responses are under discussion in the Statehouse regarding the AGTs: 1) Repeal, 2) Delay 3) Do nothing 4) Slight increase in the threshold.

Repeal or delay of the AGT’s is most appealing to districts that are struggling to stay under the thresholds. A repeal helps those who believe they could not get a budget passed with penalties or the cuts would be so severe as to undermine what is working well in their schools. A delay helps those seeking more time to allow for a merger that might help to bring spending down. Those who would like no change, particularly those districts with budgets under the AGTs, indicate that the thresholds were in place to control spending and should be allowed to do this job. The fourth option appears to be the one favored by the House Education Committee. Sympathetic to the unexpected 7.9% spike in health insurance premiums, the committee is currently discussing a proposal that would raise the allowable growth threshold by .9%.

How any of this will ultimately square with the Senate and the Governor will likely unfold within the week.

Please feel free to contact me with questions or concerns at kwebb@leg.state.vt.us or phone/text at (802) 233-7798. I am available to meet for coffee and conversation on most Mondays or Saturdays by appointment. I apologize that I am generally unable to make the Tuesday coffee meetings at Bruegger’s.

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