New report: Vermont’s school spending increases unsustainable

The Vermont Realtors released a study on Tuesday that shows overall spending for education has increased dramatically over the last 15 years, and during that same period school enrollments statewide have dropped by 1,000 students a year.

Isaac Chavez, the CEO of the Vermont Realtors, called on Statehouse leaders to begin reforming the state’s education delivery and finance systems this legislative session.

The realtors association says the rising cost of education is hurting the economy. Lowering property taxes, realtors say, would make Vermont a more attractive place for business and more affordable for young people who want to live and work in Vermont.

The report, conducted by Art Woolf and Dick Heaps of Northern Economic Consulting, looks at Vermont’s education spending trends.

Woolf and Heaps say that Vermont’s overall school spending was 20 percent above the national average 15 years ago; now it is 70 percent above the average. The two consultants compared education spending and health care expenditures to median family income growth. Total spending on education in 2011 was $1.5 billion; health care cost the state $5 billion that year. The gross state product was $26 billion in 2011.

“Vermont spends a lot more than other states in the U.S., and the gap has been growing since the late 1990s,” Woolf said.

Vermont’s low student to teacher ratio (9.4 students per teacher) is the biggest cost driver, Woolf said. The national average is 16 to 1. Though Vermont school boards pay below average salaries to teachers, the state’s per pupil spending was about $18,571 — the second highest level in the nation, according to a 2013 National Education Association report. The national average was about $11,068.

Heaps said taxes are based on total spending, and “because we’ve spent so much our spending has gone up so much our taxes are going to be high.” Leadership is needed to “change the course of what’s going on with education spending.

“This isn’t a new problem, this is something that has developed over the last 15 years,” Heaps said. “We’ve had good economic times, a housing boom that increased the tax base for schools, a recession early in the decade, the Great Recession, a whole mix of economic times. What has happened is spending marches ahead.

“In order to change that, someone has to step forward,” Heaps said. “If we don’t do something we’ll see more of the same.”

Woolf and Heaps say the state has several options for reducing spending and property taxes. They say that the state could “capture savings” from falling enrollments. Schools can also save an average of $15,000 a year, they said, by replacing older retiring staff with less experienced teachers. They also suggest expanding the two vote provision for local school budget approvals, which penalizes high spending school districts.

Reducing the income sensitivity tax break would put downward pressure on property taxes, Woolf and Heaps say. The current income cutoff is $90,000. Lowering the cutoff would reduce the state’s tax expenditure for income sensitivity, which currently reduces the Education Fund by roughly $150 million per year or 15 cents per $100 of assessed property value.

The Vermont Realtors blame the growth in school spending on the state’s income sensitivity program, which gives property taxpayers who qualify a tax break. More than 60 percent of households participate in the program, and the realtors say the program “de-sensitizes” voters who approve local school budgets to the real cost of education.

The Vermont Realtors also want to see cuts to the small school grant program. The state spends $7 million a year to support schools with fewer than 100 students. The realtors say the program should reduce overall support for the program and award grants competitively to schools based on geography and need.

House Speaker Shap Smith says it would be imprudent to make changes to the education finance system without addressing cost drivers, such as student to teacher ratios first.

“We ought to look at small schools and ask is the quality what we might hope for in the education system … and think about it in terms of the quality not necessarily the ratio,” Smith said.

The Legislature will consider a proposal for a new school governance model, he says, that would phase in the elimination of supervisory unions and the state’s roughly 285 local school districts. The unions would be replaced by larger districts governed by one board that would oversee a large pool of students and a number of facilities. The Burlington School District has been cited as an example by lawmakers. The district has 4,000 students, eight buildings and one board.

“I don’t think it’s the model because it’s Burlington,” Smith said.

He says a different organizational structure could streamline governance and continue to allow communities to have a say in how schools operate.

Editor’s note: This story was updated at 6:32 a.m. on Jan. 29.

Anne Galloway

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43 Comments on "New report: Vermont’s school spending increases unsustainable"

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Dave Bellini
2 years 4 months ago
Less and less students + more and more spending: “the Vermont way”. This confirms what many said Act 60/68 would do. The Governor has made it clear he plans to do nothing about it. . A good example of this cost be damned attitude is the city of Montpelier school system. Any amount of money is too little. No class is too small. Nothing is too frivolous. . We’re still a several years away from any legislative solution. First they have to focus on the major tax increase associated with a universal healthcare system. Then the middle class gets walloped… Read more »
Wendy Wilton
2 years 4 months ago

I agree with Speaker Smith on his assessment that education tax reform must involve addressing the underlying cost drivers to be successful. It will mean reducing the tax subsidies, changing governance and reducing sturdent:teacher and student:staff ratios. Does the legislature have the political will to do it?

Janice Prindle
2 years 4 months ago
Surprise, surprise, a conservative business interest group comes up with a study claiming our system is broke and they can fix it with their conservative policies: consolidating schools and classrooms, eliminating teachers. Our smaller schools, smaller classes, higher teacher to student ratios, all pay off when it comes to those expensive (and mostly unnecessary) annual standardized tests that the conservatives put in place when they ran the country, and which are only a boon for big business. It’s not only the evidence of standardized testing, but decades of educational research have demonstrated that apart from the correlation of “zip code”… Read more »
Peter Washburn
2 years 4 months ago
Says who? A review of all the standardized test scores across the state of Vermont would prove otherwise Ms. Prindle. We have a very serious situation when homeowners are being forced to sell their homes and move to rental property or who seek either similar jobs in other states or a different vocation in this state because they find themselves unable to pay the ever increasing taxes brought on by the greedy VT NEA and it’s union stranglehold of all VT taxpayers. This is irrefutable and there is no defense of or for it. It is a very sad and… Read more »
Jay Davis
2 years 4 months ago

VT NEA stranglehold? What? The electorate votes on school budgets don’t they? The electorate votes to consoilidate schools dont they? So far I’ve heard the Governor, the legislature and now the VT NEA blamed for out of control school funding. When does someone, anyone, blame the electorate. Its pretty simple, if you want lower school taxes stop voting for irresponsible school budgets. Am I just missing something here?

Peter Washburn
2 years 4 months ago

You bet you are Jay and you know it. Towns can vote down school budgets over and over and over again but it will, sooner or later get to limit where it can not go any lower and once it gets there it will include the NEA mandated teacher increases in salary. No way around that. You need to better know what you are voting for when you vote for your local school’s budget but, 10 to 1 says either you are a teacher or dependent upon a teachers salary in your household.

Carol Frenier
2 years 4 months ago

If you are referring to the Common Core as the “new business-oriented national curriculum,” you ought to take a second look. Check out the actual textbooks from Pearson/Prentice Hall. The curriculum is appalling from both liberal and conservative perspectives. In fact, this is one area that I think we would actually be in substantial agreement.

Ron Jacobs
2 years 4 months ago
Jeez. The same old greedy GOP type guys with another report telling us that we should lower their taxes and give business more breaks because business won’t come here unless we do. Yet, business is just fine in the Green MOuntain State, it’s educational system is near the top in national rankings and people still keep coming here to live. There are a couple problems with the school funding situation, but giving more tax breaks to business is not going to solve them. Art Woolf needs to quit pretending he has the best interests of Vermont’s public in his interest… Read more »
Bob Stannard
2 years 4 months ago
Sure let’s increase student ratio up to 16:1. Why stop there? We could save even more if we went to 25:1, don’t you think? Or think of how much we could save if we jumped it up to 30:1. That would even be better! Then those lazy, over-paid teachers would finally be earning their keep. We could cut back on teachers eliminating about half of the workforce. Now, little Johnny’s day may not be quite so filled with knowledge as it might be with oversight. Think of it like a prison where the teacher (guard) would simply look over the… Read more »
Dave Bellini
2 years 4 months ago

When you were in school how large were the classes?

David Schoales
2 years 4 months ago
The self interest of the realtor “experts” quoted in the article (keeping taxes down so they can sell more properties and collect their 6%) may have caused them to be highly selective in their choice of facts. They left out a couple important ones, most notably that Vermont students are consistently at the top on nationwide tests, and compare favorably with student around the world. In other words, we are getting a lot for our money! They also fail to mention that average teacher pay in Vermont is below the national average, so despite having a better ratio of teachers… Read more »
Robert Joseph
2 years 4 months ago

“Though Vermont school boards pay below average salaries to teachers, the state’s per pupil spending was about $18,571 — the second highest level in the nation, according to a 2013 National Education Association report. The national average was about $11,068.”

walt amses
2 years 4 months ago
“the realtors say the program “de-sensitizes” voters who approve local school budgets to the real cost of education”….. So, presumably, the way to “sensitize” voters is to somehow make it hurt. The same way the right is bent on “sensitizing” the hungry by cutting their food stamps; “sensitizing” the jobless by cutting off their unemployment; and “sensitizing” the elderly by destroying Medicare. When both educational and life achievement can be measured simply and unequivocally by socio economic level, income inequality should be our first priority. Solving our school funding woes as suggested by the realtors flies in the face of… Read more »
2 years 4 months ago
“In order to change that, someone has to step forward,” Heaps said. “If we don’t do something we’ll see more of the same.” Yes, and in order to get change we have to change the faces in Montpelier! We have had enough and it’s time for the people to speak up at the poles. The same people who have created this problem cannot be counted on to solve it. Our leaders like what they have done and like the total control. If ‘we the people’ are concerned, we need to change the people who cause the problem. And it is… Read more »
Scott Thompson
2 years 4 months ago
Great. Another “study” that manipulates the numbers to confirm its sponsor’s preconceptions. Median income is a dubious yardstick. It has been declining lately even as the state’s economy has grown — which is a problem itself worth investigating. Measure anything with a shrinking ruler and you’ll make it seem bigger than it is. The attack on income sensitivity as the root of all evil is especially puzzling. It’s so off-base, so detached from the reality that most of us live, yet so insistent, that it can only mean one thing: the Talking Points of the season are out, and this… Read more »
Bill Dunnington
2 years 4 months ago
This is a deeply systemic problem – and closely tied to a larger set of economic and cultural challenges. Schools are much of the identity of small towns, and school jobs are among the best around in small towns. Local town budget decisions only nibble at the margins of total spending. Things do add up, but it’s unrealistic to expect that district consolidation – clearly in the cards as part of the fix – will happen in a voluntary way. It will take continued fiscal pressures to keep the heat on and not duck this any more – and substantive… Read more »
Ed Deegan
2 years 4 months ago
Why would Mr. Woolf use the NEA data and not the department of education. Maybe he wants to tilt his report to meet his predetermined agenda. Thats what he usually does. I have tracked education data since my babies were born and most of them are through college. We have always had the lowest pupil teacher ratio. Thats a good thing. As enrollments have declined the ratio, although slightly lower, has remained steady. U-32 district as many others are reducing staff substanially this year. The ratio will probably adjust to its levels of 5 – 10 and 15 years ago.… Read more »
2 years 4 months ago

Here is the evidence that it is NOT district size or governance structure that drives educational costs in Vermont: education.vermont.gov/documents/EDU-Data_2014_Per_Pupil_Spending_by_School_Type.xlsx

Now provide the evidence that it IS …

Tony Redington
2 years 4 months ago
There does seem some common ground here: (1)reducing the number of school districts reduces the number of high salary superintendents, staffs and governance costs and still be below the size of Burlington (note the City of Montpelier probably poorer for not joining at the time the surrounding towns split off to form U 32 and the two now need each other more than ever so that is a good set of two districts to merge); (2) force districts to reduce class sizes through joint districts arrangement for certain courses using media approaches; (3) address teacher competence not by firing but… Read more »
Lance Hagen
2 years 4 months ago
Wow …… the defenders of the status quo education system are out in full force on this article. There are claims the writers of the report are from the ‘evil empire’ (conservative business). One even started to say ‘bad things’ about Art Woolf’s mother. All those states that don’t have this ‘personalized’ education system, as we have in Vermont, must be turning out an army of uneducated Neanderthals. Funny how our neighbor to the east manages to achieve the same, if not better, educational metrics and only spends 60 cents for every 1 dollar Vermont spends. But not to worry,… Read more »
Ed Deegan
2 years 4 months ago
Actually you hit it right on the nose. Nationally are system of education is failing, we lose almost a quarter of our students to dropping out of high school. So yes the rest of the states are turning out an uneducated population. I have nothing against Mr. Woolf but he clearly needs to base his opinions on data and facts. Its a legit question Why is he not using the dept of ed data? It is a better apples to apples approach. If we develop the wrong premise, and this does, you will never get the right answers. Also, I… Read more »
Lance Hagen
2 years 4 months ago
Ed, before you hurt your arm patting yourself on the back on Vermont dropout rates, let’s look at a few facts. According to data published by the U.S. Department of Education: https://nces.ed.gov/fastfacts/display.asp?id=16 There are 13 states that have a lower overall dropout rate as compared to Vermont. It can also be seen from this data that the dropout rate for Blacks and Hispanics is better than 2X larger versus dropout rate for Whites. Since Vermont is predominately White there is little influence from higher rates for Blacks and Hispanics. So looking at the data again, there are an additional 9… Read more »
walter moses
2 years 4 months ago

To Heaps, Woolf, and the realtors: OMG, I never would have guessed! Great Study! I sure am glad I didn’t have to pay for this one!

John McClaughry
2 years 4 months ago

The Woolf-Heaps-Realtors report is of course quite right on the facts, just as Woolf was in the Ethan Allen Institute’s Better Value, Fewer Taxpayer Dollars report of 2009 (at http://www.ethanallen.org/pdf/educationreport_2009.pdf).
As to the solution, sure, there are a number of “mechanical” fixes that might slow education spending, but we really need to discuss the fundamental solution in the EAI report: parental choice and provider competition. As parents choose independent options for their children, almost always at lower cost than the present inflated government school costs, total education spending will start to decrease.

krister adams
2 years 4 months ago

Mr. McClaughry: Your lack of compassion on almost all topics is stunning. But on this most important one, education, how do you suggest a single Mom with Section 8 Housing Voucher could afford an “independent option” as you put it?

Tom Haviland
2 years 4 months ago

In a rural state like Vermont school choice is meaningless without a transportation option. If the school bus doesn’t go there, most kids can’t go there.

Jason Farrell
2 years 4 months ago
No wonder the solutions sound familiar. “The Vermont Realtors commissioned a study by local economists Art Woolf and Richard Heaps to look at rising costs amid declining student enrollment.” The re-hashed solutions presented by this “commissioned study”: 1. Force small schools to close but call it “consolidation” because that’s less scary. Then, move kids served by those schools into larger classrooms and fire more educators and administrators. No mention or analysis of the effect on the vast numbers of newly unemployed as a result of such action. 2. Change the income sensitivity portion of our current education funding laws to… Read more »
Terrence Sehr
2 years 4 months ago

Not surprising a vested interest wants to cut spending to “improve the economy” (translation: improve their income). No mention of the actual quality of education in VT.
But look at this: http://nces.ed.gov/nationsreportcard/subject/publications/studies/pdf/2013460.pdf
Vermont eighth graders rank second in the nation in math and also in science.
Hmmm, second highest spending per pupil; second highest math and science scores…

Tom Kearney
2 years 4 months ago

Costs are high because there are no economies of scale. There are 50 more school districts than there are municipalities in the state. That means lots of tiny districts, where logistics prevent the kind of efficiencies that are possible when there are more pieces to move around and juggle. That also means duplication of administrative functions and services. However, schools are also at the center of Vermont community life, and so far not many people are interested in compromising that role for the efficiencies that could occur with consolidation and larger, fewer school districts.

Will Adams
2 years 4 months ago

I suspect very few of you who advocate for higher student/teacher ratios have spent any time teaching in a Vermont classroom recently.

josh coursen
2 years 4 months ago

Let’s start graduating students a year early. Senior year is mostly a waste of time anyways. I was more prepared academically for college after 8th grade than 12th. Provide large online and cross district college prep classes for those who are motivated. You can stick a 100 kids in a classroom if they all want to be there.

Will Adams
2 years 4 months ago

“You can stick a 100 kids in a classroom if they all want to be there.” This ignores the fact that schools have the legal obligation to instruct all students regardless of their desire to be there. Let me know when you intend to teach 100 third graders in the same classroom. I’m eager to see that.

josh coursen
2 years 4 months ago
“Let me know when you intend to teach 100 third graders in the same classroom.” Interesting thought process. I wonder what I would teach them. Can you actually find 100 3rd graders who “want” to be in a classroom? What’s your definition of a classroom? I’m glad you are eager to be there because I gaurentee it would be a lot of fun. In fact, I would rather be in a classroom with 100 kids who want to be there than to be in a classroom with 5 kids who don’t. Although any group of 100 motivated kids of any… Read more »
Will Adams
2 years 4 months ago

So what is your solution for the children that “don’t want to be there”? I think first we’d need to understand why they don’t want to be there in the first place. All of that notwithstanding, schools have a legal obligation to educate them. Increasing class sizes certainly won’t help.

krister adams
2 years 4 months ago

Josh buddy, she’s a teenager! Of course she doesn’t want to be in school! Of course she tells you she only has minimal schooling that’s worthwhile! Remember…I presume you were once 17?

chris lang
2 years 4 months ago
Small towns, small schools and small classes are part of Vermont’s history. If we can no longer afford our rural way of life while providing the best opportunity for our kids, then we have to get creative and do things differently. Consolidation is not practical if it means busing kids farther. Many already travel far to get to school. Packing students in a single classroom isn’t great either especially if a class has several kids with special needs. Given these constraints, perhaps we should look at the day itself and switch to a block program instead of offering multiple subjects… Read more »
Robert Maynard
2 years 4 months ago

The problem with the drive for smaller class sizes is that the evidence does not confirm that they improve educational sesults, as Hoover Institute Senior Fellw Eric A. Hanushek has points out in his book “The Evidence on Class Size.” http://hanushek.stanford.edu/publications/evidence-class-size

Ruth Uphold
2 years 4 months ago

We spend too much on elementary education. More should be spent on allowing HS graduates to go to college. The teacher: pupil ratio is unbelievably low. We need consolidation, increased efficiency, and $90,000 seems way too high for tax relief. Ratchet that down gradually to $60,000 or so.

Wayne Andrews
2 years 4 months ago

How about some cuts in teachers benefits? An earlier Digger post claims the teachers retirement/heath fund is under funded. More money into the teachers blood thirsty pockets Ever ask yourself what a teacher does when the a “specials” teacher comes and takes the class away be it PE, music, guidance etc?
Retire at 55 years old with bulging pockets due to double or triple pay raises disguised at step increases, lateral moves and COLA,s.

Rob Bast
2 years 4 months ago

The average classroom size comparison at the start of this article, 9.6:16 Vermont to national, doesn’t seem like a useful metric. Rural states have different considerations in transportation particularly. What would be an optimistic ratio target if we compared to states with similar density? If we consider what it might cost to transport here in 20 years, do we benefit by keeping our established edu. infrastructure? There should be a long term consideration here, not a short term one.

Richard L Kempe
2 years 4 months ago

Without discipline, there is nothing to be proud of.

Frank Davis
2 years 4 months ago
There is always a $imple $olution when it comes to reducing co$t$. Vermont is small state with few students. If we had only eight high schools with 30 students per class, we could hire fewer teachers ,staff and administrators, heat and maintain fewer buildings and probably even spend less on transportation because fewer buses traveling two or more hours each way are likely to be more efficient than many more buses making short runs. As for middle schools, no more than 5 regional should feed each high school and the ratio for elementary school to middle school could be 7:1.… Read more »
Gary Gale
2 years 4 months ago

Teacher’s Union organizers are on call whenever a school budget votes take place. Job protection racket that mobilizes laborers to out number the few who vote in opposition is the name of the game.

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