The House Education Committee heard a very different viewpoint on education spending last week.
Paul Cillo, president of the Montpelier-based Public Assets Institute, a nonpartisan, nonprofit that performs state, tax, budget and economic analysis, said he was asked to testify “about what I think is wrong with education in Vermont.”
Cillo’s presentation put a different spin on the declining enrollment versus rising school spending conundrum with which the committee has been wrestling.
“Vermont’s economy is recovering, in fact we have the second-fastest growing economy in New England since 2009,” Cillo said Friday. The bad news, he said, is that “real household median income dropped 6 percent,” in that same time period. Poverty is up, homelessness is up, he said.
“So how could both of these be true?” he asked of the trend of economic growth and “increasing hardship for tens of thousands of Vermonters.”
“Do we have two simultaneous realities … two Vermonts?” he asked.
According to the Public Assets Institute, the economy is growing but “workers are not seeing the fruits of their labors, so the answer is, yes, there are two Vermonts.”
Cillo produced a chart showing that education spending has been consistent going back to 1992. He said per pupil spending is up “largely because of declining enrollment … but the share of our taxes going to education has been steady for at least 20 years.”
General Fund support for education has shrunk at the same time schools are being asked to shoulder more responsibilities — from increasing numbers of students living in poverty to helping students with disabilities and learning differences to nutritional needs and more, he said.
Cillo said the number of classroom teachers has decreased, but more special educators and paraprofessionals to help work with increasing numbers of students with special needs have been added.
“The funding system has gotten too confusing,” he said. “Voters deserve to see a clear connection between their budget votes and the effect on their individual taxes.”
He suggested partnerships, not directives, from the state to help support local school districts; clearer management actions from the state “to reduce uncertainty for school districts,” including the earlier date by which to communicate the base education rate and tax rate; a call for the Legislature to address declining enrollments; and a call to eliminate the school property tax on primary residences.
Rep. Kevin “Coach” Christie, D-Hartford, agreed that the timing for when the local boards hear from the state on the base rate and tax rate is long after town meeting, when local budgets have been passed.
“That part of the system is really difficult,” said Christie. “I think there’s a need to look at that cycle.”
Rep. Emily Long, D-Newfane, said she did not see a lot in the PAI presentation that will help her to navigate the call for change being drummed across the state about declining enrollments and rising costs.
“We’ve had declining enrollment, that’s what got us to where we are,” Cillo said.
Should that lead a push toward consolidation, necessarily, asked Cillo, or should lawmakers be asking other sorts of questions, including, “Why do we have declining enrollment? Why do we have low birth rates in Vermont, and what does that have to do with poverty, homelessness, and declining income? I think those are the questions. It’s about the state we want.”
Rep. David Sharpe, D-Bristol, the committee chair, summed up the presentation.
“If I put those thoughts together, although there’s plenty of money, it’s not in the hands of people who are able to pay their property taxes, so affordability for our citizens is difficult because their median income has dropped, and so they are complaining about their inability to pay taxes despite the fact that there is plenty of money in the economy?” Sharpe said.
Cillo said that was right.
“When you look at the data, there is no train wreck there, but when you look at it in the context of declining incomes, then the question is, what do you do with that? Do you make adjustments to the school systems, when the schools are really the hope of the future? We recognize this is the future, this is where we make the investment in the future, so do we pull back on that investment? Is that the right move?”
Rep. Bernie Juskiewicz, R-Cambridge, vice-chair of the committee, said if the education system in Vermont were a big business, and “if they had those couple of things staring them in the face, the number of teachers going up, and cost … they wouldn’t beat around the bush, they would start cutting.”
Cillo said that the business — education — is doing something much more complicated and expanded upon than it once did.
“We are trying to meet the needs, and so we need a better product,” Long said. “We need to find efficiencies. If we agree that this is the product we want, we’ve got to find a way to pay for it.”
Sharpe did not embrace the income tax-based system suggested by Cillo.
“Any tax policy has winners and losers. So who are the losers if we do it by income? They turn out to be residents of trailer parks, mobile home owners and the very wealthy,” Sharpe said.
He said he did not know how enough votes would come from the floor to support a policy that would hit hardest those two groups at the opposite ends of the spectrum.
Rep. Scott Beck, R-St. Johnsbury, asked whether an income tax system would drive out wealthier people, and Cillo said that has not proven to play out. Each year, he said, some 15,000 to 16,000 people move out of Vermont and roughly the same number move in.
The incoming residents, he said, tend to have incomes about 18 percent higher, and property values go up. In Hardwick, he said, they say that “the flatlanders are buying in and driving up our values.”
Rep. Alice Miller, D-Shaftsbury, asked if perhaps the state ought to “try to find out why those 16,000 are moving in and try to get that number up to 30,000.”
