Education of our young people is one of the most important obligations of our democracy. And a funding system that enables school district voters throughout the state to make thoughtful budget decisions is key to fulfilling that obligation in Vermont.
After the Vermont Supreme Court’s Brigham decision in 1997, the Legislature made a structural school funding change. The result was the current system, which is not a “formula” that attempts to equalize a flawed and inherently unfair local school property tax as the various efforts in the 70s and 80s were.
Instead, it is a fundamentally fair, sustainable, and workable statewide system that supports local school districts to equitably invest in the education of our children. Vermont’s school funding system is widely viewed as the most equitable in the nation.
But it’s not without problems. The biggest complaints about the current system are that it relies too much on property taxes and that it’s too complex for voters to understand. These are fair criticisms, and it’s worth the Legislature making an effort to correct them.
While the House’s recently passed “reform” bill (H.911) makes some progress on lowering property taxes, it unfortunately also takes a step backward by making the system more complex for school districts. We rely on school boards and school district voters to make spending decisions every year, so we should be making the system easier – not harder – for them to understand the tax consequences of their decisions.
The House bill lowers property taxes by establishing a progressive state income-tax surcharge that raises about $60 million dedicated to the Education Fund. With this influx of funding, the state can lower school property taxes across the state.
Gov. Phil Scott wants to lower education property taxes, too, but not by offsetting them with income taxes. He wants to push communities to cut school spending.
But this year Vermont communities have already done everything we could want them to do to control costs. They passed budgets with a lower overall growth rate than the target rate set by the governor. Yet, he’s putting even more pressure on school districts to push their spending down.
With a nod to the governor’s idea that Vermont schools should spend less on our children’s education, the House bill would make property taxes even more painful for districts that want to increase their spending per pupil. H.911 seems to be based on the assumption that the funding system doesn’t have cost controls already in place.
The fact is that the existing system requires that residents in school districts with higher spending per pupil pay higher homestead tax rates. Currently, if a town spends more per pupil, its homestead tax rate increases proportionally. If a town increases its per-pupil spending 10 percent, residents of that town will pay 10 percent higher homestead taxes. Nevertheless, the House bill pushes up property taxes even more for districts that decide to spend more per pupil and removes the proportional relationship between spending and taxes. H.911 creates a big change in the wrong direction.
We should keep moving forward instead of stepping back. The Vermont Senate, where the bill is now, can correct the problems with H.911 and solve some real problems with the funding system at the same time. We need to ensure that the school funding system is stable, fair, equitable, understandable, and supportive of local funding decisions so that a high-quality education really can be made available to all young people.
I recall from my time in the Legislature in the 1980s that when inequity increases, it undermines trust, educational quality and basic fairness. We could make Vermont’s school funding system simpler and even more equitable by phasing out the homestead property tax and moving to an income-based school tax for all Vermont residents while maintaining the current cost control by having increased per-pupil spending in a town result in higher income-based tax rates in that town.
Vermonters want to invest in our children’s future and an equitable funding system is key to ensuring that investment benefits all of the state’s children.
Scudder Parker is a former Vermont State Senator and former chair of the Senate Finance Committee. He lives in Middlesex.