Gilbert: School merger incentives could lead to funding inequities

Editor’s note: This oped is by Allen Gilbert, executive director of the American Civil Liberties Union of Vermont.

The ACLU doesn’t have a position on school mergers. But when merger proposals include incentives funded by carve-outs to the Education Fund, we get worried. We don’t think that school districts that aren’t merging should have less of a draw on school funds than those that are merging. It’s an equity issue. And it’s a particularly troublesome issue when merging schools will be subsidized at the expense of non-merging schools — even if the merging schools cost more to operate.

Intense politics have swirled around both bills. In particular, school choice advocates have fought tenaciously to safeguard, and if possible, expand school choice.

There are two bills on school consolidation wending their way through the legislative process. One is H. 782, “A voluntary school district merger incentive program, supervisory union duties, and other education issues.” It is on the April 29 House notice calendar, so will likely be discussed by the full House on Friday, April 30. The other is a Senate Education Committee bill that is about to be finalized and given a number. It may be voted out of the committee as early as April 29, and then sent to the floor. It will likely be sent to the Senate Finance Committee before consideration by the full Senate.

Support for the bills has come from two of the major education advocacy organizations — the Vermont School Boards Association and the Vermont Superintendents Association. These groups have worked to shape the two committee bills to be as similar as possible, and at this stage the bills are close to identical in their key points.

Intense politics have swirled around both bills. In particular, school choice advocates have fought tenaciously to safeguard, and if possible, expand school choice.

There is no assurance that money will be saved, and there is no assurance that opportunities for kids will increase. Furthermore, the incentive subsidies will continue for four years after districts merge — EVEN IF the new merged district is spending MORE money than the individual districts did before merging.

It’s the way the bills rely on a carve-out to the Education Fund to pay for the merger incentives that concerns the ACLU. Others may or may not share this concern (the two committees have so far not shown much worry about it, because the cost of the merger incentives will supposedly shift tax burdens by less than a penny). But anyone concerned about affordability issues and more efficient school systems should at least be concerned that the bill is assured to accomplish only one thing — to give tax cuts to merging districts. There is no assurance that money will be saved, and there is no assurance that opportunities for kids will increase. Furthermore, the incentive subsidies will continue for four years after districts merge — EVEN IF the new merged district is spending MORE money than the individual districts did before merging. That seems imprudent at a time when everyone is looking to cut school costs to meet the “Challenges for Change” mandates.

Here’s the language from H. 782 on the merger incentives:

(b) Tax rates.

(1) Subject to the provisions of subdivision (3) of this subsection and notwithstanding any other provision of law, for no more than four consecutive years prior to fiscal year 2018:

(A) if the Merged District’s approved annual education spending in one fiscal year is less than its education spending in the prior fiscal year, then for purposes of calculating the Merged District’s district spending adjustment for the year, the Merged District’s education spending per equalized pupil shall be decreased by $875.00;
(B) if the Merged District’s approved annual education spending in one fiscal year is equal to its education spending in the prior fiscal year, then for purposes of calculating the Merged District’s district spending adjustment for the year, the Merged District’s education spending per equalized pupil shall be decreased by $750.00;
(C) if the Merged District’s approved annual education spending in one fiscal year is greater than its education spending in the prior fiscal year by one percent or less, then for purposes of calculating the Merged District’s district spending adjustment for the year, the Merged District’s education spending per equalized pupil shall be decreased by $600.00;
(D) if the Merged District’s approved annual education spending in one fiscal year is greater than its education spending in the prior fiscal year by more than one percent but not by more than two percent, then for purposes of calculating the Merged District’s district spending adjustment for the year, the Merged District’s education spending per equalized pupil shall be decreased by $400.00; and
(E) if the Merged District’s approved annual education spending in one fiscal year is greater than its education spending in the prior fiscal year by more than two percent but not by more than four percent, then for purposes of calculating the Merged District’s district spending adjustment for the year, the Merged District’s education spending per equalized pupil shall be decreased by $200.00.

(2) For purposes of determining the Merged District’s district spending adjustment under this subsection for the first fiscal year of merger, the Merged District’s education spending in the first fiscal year of merger shall be compared to the combined education spending of the merging districts from the fiscal year two years prior to the first fiscal year of merger increased by the percentage change in the New England Economic Partnership Cumulative Price Index for state and local government purchases of goods and services between the fiscal year two years prior to the first year of the Merged District’s operation and the fiscal year one year prior to the first year of operation, as of November 15 prior to the first year of operation.

(3) During the years in which a Merged District’s district spending adjustment is calculated pursuant to this subsection, the equalized property tax rate for each municipality within the Merged District shall not increase or decrease by more than five percent in a single year, nor shall the household income percentage increase or decrease by more than five percent in a single year.

The ACLU has suggested funding the merger incentives out of a separate appropriation so the Education Fund isn’t affected, and perhaps to set up the incentives in such a way that if mergers don’t produce savings, the incentives stop (a revolving loan fund would accomplish this). The committees have not been keen to consider alternative funding mechanisms, however, as they have rushed to push the bills out of their committees. There is a feeling that the legislature must produce a merger bill, even one that might not lead to savings. Pressure from the administration, and some members of the public, is too strong.

There is a blog post on this subject on the ACLU Web site; follow the link under “Civil Liberties Journal” on our home page.