Editor’s note: This commentary is by Ben Simpson, who is an Iraq War veteran and a Bennington College student.
[V]ermont’s system of education funding was designed to distribute taxes for schools equitably across the state. It has been successful in that, but it has disconnected local school boards from the major funding mechanism, state collected property taxes. This has isolated the local school boards from electoral accountability, diminished fiscal authority and autonomy, and increased overall spending, creating a political imperative for state legislators to find a way to reduce the property tax burden on Vermonters, which they seem to be failing to do this session.
The funding mechanism for Vermont schools may be causing problems for state legislators, but the schools are performing very well. Vermont schools are consistently in the top 10 of the National Assessment of Educational Progress, although, these scores are average for the New England region. There is still evidence of an “achievement gap” between rich and poor kids, but both economically disadvantaged and advantaged children score higher than the national average on standardized testing by a significant margin.
On the costs side, the picture is less rosy. Per pupil spending has increased about 83.7 percent over 10 years. Vermont schools have the lowest student to teacher ratio in the United States, primarily because of a steeply declining population of students. This decline is set to accelerate, driving per pupil costs even higher. The rise in per pupil spending has matched the rise in property tax collections. Since the Vermont Legislature created the complex funding mechanism, the state’s education tax rate has risen by 136.9 percent, far faster than other tax collections.
One of the major causes for this rapid rise in property taxes is the confused structure of revenue raising and expenditures. Each town votes on the level of education spending for their school district(s), but the revenues are all collected by the state. The money is put into a black box and tortured by a series of very complex calculations, only then is the tax money distributed to schools.
The money is put into a black box and tortured by a series of very complex calculations, only then is the tax money distributed to schools.
What happens in the black box is indecipherable to all but the most dedicated policy wonks. I have been trying to understand this system for months, and I still don’t get it. Voters are particularly disadvantaged by this information asymmetry. A homeowner may be a member of multiple school districts, each with its own spending priorities. A voter in this situation is being asked to evaluate different budgets, from different school districts; and, due to the state-based revenue mechanism’s complexity, this voter will have a very hard time understanding how budget decisions will change his/her tax rate.
The incentives facing the voter also encourage spending increases. Voters who wish to increase education spending pay about 30 cents on the dollar of increased expenditure in property taxes. The rest is covered by other revenue sources at the state level. In short, voters and policymakers alike do not understand how property taxes are collected and distributed in Vermont or how their actions will affect them. The structure is opaque and local school boards can continue to increase expenditure without their constituents being given clear and understandable feedback on how those decisions will affect tax rates locally and statewide.
A second issue is the autonomy of school boards. The purview of local boards has been under considerable pressure. There have been a flood of state and federal mandates, which constrain the ability of boards to set spending priorities. A memo authored by the Vermont state economist in 2007 concludes that mandates “have irrefutably contributed to the rising cost of public K-12 education.” Delegating responsibility for spending to local boards, and then mandating many programs in state statute, significantly reduce the power and accountability of local boards, further degrading accountability.
The members of the Vermont Legislature have a choice: embrace the tenets of local control and strengthen school boards by creating a funding mechanism that is transparent and loosen state mandates; or, consolidate control of local schools at the state level. The middle ground cannot hold.
