As lawmakers double down on education, the focus turns to students that aren’t there.
With declining enrollment a major issue for the next legislative session, a decade-old provision to cushion school districts from the financial blow of falling populations is on the chopping block.
In his budget address on Thursday, Gov. Peter Shumlin proposed cutting phantom student subsidies and other small education grants — one day after the House Education Committee took testimony about the state’s student counting methods
Established shortly after the implementation of Act 60, the phantom student provision caps the amount that state funding for a school can decrease when student population goes down at 3.5 percent, an effort to cushion the financial blow of declining enrollment.
So, if a school’s population falls from 100 students to 90 students, the school’s equalized pupil count could only fall to 96.5 percent, meaning the state fund pays for 6.5 nonexistent, or phantom, students.
In a meeting on Wednesday, the House Education Committee heard testimony on declining enrollment and the impacts of the phantom student phenomenon.
Using an estimated figure of 770 phantom students, committee chair Rep. David Sharpe, D-Bristol, calculated that at an average per-pupil expenditure of $17,000, phantom students cost the state about $13 million.
Property taxes are set to be among the Education Committee’s most contentious issues of the session. The taxes source the majority of the Education Fund, but a third comes from other revenues, including proceeds from the Vermont Lottery, some Medicaid dollars, and a portion of the state’s sales tax, among others.
Brad James, education finance manager from the Vermont Agency of Education, told the committee that, because of the provision, phantom student rates are keeping tax rates artificially low in some school districts, while driving up other districts’ rates.
“The student population has been going down,” said James, “so what’s happening is a lot of districts are still being held harmless and have been held harmless for 12 to 13 years.”
Meanwhile, projections show that the declining enrollment trend is likely to continue in Vermont.
“The population has continued plummeting,” explained James.
The House Education Committee is likely to consider the process the state uses to track student population.
“My question is, are we counting students the best way we can, appropriately, in order to calculate tax rates, or should we reconsider how we count students?” Sharpe asked on Wednesday.
To that, James responded, “I think what we’re doing is accurate for the intent for what it was set up…I don’t have any doubts about our numbers,” but he said, the question is one of fairness.
“If you are being artificially saved by these students that you don’t have, and someone else is paying for it, is that fair or not?” asked James.
