Editor’s note: This commentary is by Hayden Dublois, who is a resident of Manchester and an economics student at Middlebury College. He writes a bi-weekly op-ed column for the Manchester Journal.
Act 60. The law strikes a nerve in nearly every Vermonter who has seen their property tax bill. Leaders in Montpelier seem to be completely unresponsive to the tax struggles of citizens, with no substantive reforms materializing since Gov. Shumlin took office. With the level of passionate responses that Act 60 and Act 68 incite, it is perhaps wise to take a step back and evaluate their costs and benefits to our state, our taxpayers and our students.
Act 60’s original purpose was to reduce inequities in Vermont’s public education financing system. As it turns out, the results in this sphere have been relatively positive. In 2001, only a few years after the implementation of the law, the State Board of Education stated that Act 60 reduced variation in property tax rates among municipalities.
A study in 2001 by the Rural School and Community Trust confirmed the state board’s claim, saying that the amount of money spent on students in Vermont was no longer correlated to a particular town’s relatively prosperity. The student academic gap between the highest and lowest property wealth categories, as well as the gap in achievement between the highest and lowest education-spending towns, both decreased. In 2002, a follow-up report by the trust stated that the results were even better than the prior year. The gap in education spending between affluent and less affluent towns plummeted from 37 percent in 1998 to 13 percent in 2002. The achievement gap between these towns decreased moderately as well, from 19 percent in 1998 to 12 percent in 2001. In the late 2000s, despite the elimination of the sharing pool mechanism with the passage of Act 68, equality in education has continued to improve in Vermont, with a 2008 report by the State Board of Education indicating that there were clear increases in equity from 2005 to 2007.
However, once we move beyond the narrow focus on education equity across towns, the costs associated with Act 60 and Act 68 far outweigh its benefits. While Acts 60 and 68 primarily affected education financing, they have undoubtedly impacted the quality of education. Upon examination of student performance in Vermont since the imposition of Acts 60 and 68, the results are troubling, to say the least. Our students’ results on the NAEP exam suggest that reading levels in Vermont barely changed at all from 2002 to 2013. Our eighth grade writing results actually declined from 2002 to 2007, at the same time when the national average performance increased. Results released in September show that fourth, eighth, and 11th graders have seen their science NECAP scores decline substantially. While these trends are merely correlative with Acts 60 and 68, it is clear that the defenders of the existing financing system don’t have the evidence to claim that it has improved student performance in Vermont. If anything, the figures have actually gotten worse since the imposition of Acts 60 and 68.
We need to re-evaluate the way we approach education financing, before the system bankrupts the very people it is supposed to protect.
But the most troubling facts of Acts 60 and 68 are what they cost Vermonters. Between 1997 and 2008, Vermont saw its statewide school spending increase by approximately 75 percent, or 5.2 percent per year. During the same time period, school enrollment dropped by 12 percent and staffing grew by 25 percent. Today, Vermont spends $15,925 per pupil on education, $5,365 more than the national average, according to the U.S. Census. In fact, nationwide per pupil spending actually decreased from 2010 to 2011, whereas in Vermont it increased by 4.3 percent. However, there is one ranking where Vermont does finish near the top: Vermont comes in third for the percentage of school spending in relation to personal income, with residents paying over 5 percent of their personal income toward our state’s education system, hardly a statistic worth bragging about.
Not only has spending on education increased, but the percentage of spending financed by property taxes has gone up as well, from 61 percent in 2005 to 67 percent in 2012. In fact, if transfers from the General Fund had provided the same level of support to our education system in 2012 as they did in 2005, property taxes would have been $77 million less in fiscal year 2012. It is hard to justify these massive increases in education spending while enrollment has declined by about 20,000 since 1998.
However, in some ways, the politics of the law seem to hurt even more than the finances of it. Despite the fact that 76 percent of Vermonters believe that property taxes are too high, our leaders ignored Vermonters’ concerns yet again this past legislative session. Gov. Shumlin prided himself on reducing the statewide property tax increase from an expected increase of 7 cents to an actual increase of 5 cents, which is hardly a significant accomplishment by any standard. The statewide property tax is a minuscule component of the education financing system compared to the homestead tax. And even so, according to the Joint Fiscal Office, residential ratepayers will see an increase of 16 cents over the next three years (including 2014) and non-residential ratepayers will see an increase of 21 cents over that same period. Only a handful of legislators, including Reps. Patti Komline and Cynthia Browning (who represent districts in my home county), have been pressuring the Legislature to make a change. Shap Smith and Democratic leaders recently stated their intent to address the issue in the upcoming legislative session. I hope their comments are sincere, but history casts doubt on such empty promises.
Nearly one in four Vermonters voted against their local school budget this year, so it is little surprise that voters rejected budgets in 34 school districts — which represent 50 percent of students statewide — this past March. Even towns that decreased their education spending saw their education property taxes rise. But nevertheless, Gov. Shumlin has defended Act 60, calling it the most “elegant” school financing system in the country. If failed budgets, skyrocketing property taxes, increasing costs, and stagnant performance is indicative of an “elegant” system according to our state’s leader, then we have reason to be concerned.
We need to re-evaluate the way we approach education financing, before the system bankrupts the very people it is supposed to protect. Whether this means consolidation incentives, alternative revenue sources, reductions in categorical grants, budget cuts, or combinations of the above, is up for debate. But when the costs of a law clearly outweigh the benefits, when the majority of Vermonters are calling for action, and when politicians offer no solution, we have reason to be worried about whether the interests of concerned taxpayers are being represented in Montpelier.
