[A]fter weeks of deliberation, hours of testimony and huddled negotiations, House lawmakers have agreed to soften a school spending cap added to last year’s education law.
The House tacked spending thresholds onto Act 46 at the end of the 2015 legislative session that many school and education officials felt were too onerous. After days of deliberations this month, they agreed to alter the thresholds at which communities pay a penalty for spending on education.
The House rebuffed a Senate bill that would have repealed the spending thresholds. They also blocked a GOP plan to keep untouched the caps passed last year.
The amendment, passed by a 94-to-52 vote, gives schools more room to budget for unanticipated costs.
“I feel great,” said David Sharpe, chairman of the House Committee on Education. “It demonstrates that the hard work the House Ed Committee has done over the months has paid off and that it was reasonable and we heard what the public — both on the school side and on the taxpayer side — were saying and responded to that and I think that is reflected in the vote on the floor.”
The spending thresholds that give communities a certain percentage growth rate were put into Act 46 in the final moments of the last legislative session. Many communities complain lawmakers didn’t think through the impact on communities.
Since November the House Ed panel has worked on a way to adjust the allowable growth percentage — AGP. The two-year cost containment mechanism is meant to keep any increase in statewide school spending to just 2 percent.
In the fall, when school boards began to work on next year’s budgets many were finding it difficult to stay under the designated spending limit because of an unforeseen 7.9 rise in health care premiums. Other districts also found themselves bound to previously negotiated contracts, some had special education or tuition students move in over the summer. As time went on more and more districts were finding it difficult to comply with the law.
Then, a new wrinkle emerged in the past few weeks, when lawmakers learned that the Agency of Education did not exclude some capital and special ed expenses that had been accepted under the previous system.
After much back-and-forth, the House committees on Education and Ways and Means came up with a compromise that adds 0.9 to every district’s allowable growth percentage, reduces the tax penalty on any district that fails to stay under the thresholds from a dollar-for-dollar to 25 cents for every dollar over the limit. It also instructs the Agency of Education to use whichever per pupil threshold calculation best benefits a school district for FY17. In FY18, AGP remains the same for all districts, but both committees are planning to come up with a better cost containment mechanism for FY18.
The amendment was attached to S.233, a bill from the Senate that would repeal the thresholds for both fiscal year 2017 and fiscal year 2018.
Sen David Zuckerman, P/D-Chittenden, said that the House amendment is basically a repeal. “They are starting to work with such small numbers it is almost repeal in year one. But it shows the appearance of not repealing.”
When the House voted in favor of Sharpe’s amendment it effectively blocked S.233.
Some of the House members that voted against the measure did so because they wanted to vote for repeal. Rep. Christopher Pearson, P-Burlington, asked for a no vote in order to repeal and start with a clean slate.
“Our school boards do not deserve this ongoing uncertainty,” Pearson said. He added that he wouldn’t support such a “bizarre quick fix that undoes the quick fix we did last year.”
“We have already succeeded in tamping down spending … I don’t relish doing this again this year after we did it last year. I think the answer is to leave this in the hands of local voters and provide the certainty for two years that the Senate bill provides,” Pearson said.
Others voted against it because they were determined to keep taxes down and since each adjustment to the allowable growth percentage and to the penalty increases taxes statewide they said they didn’t want to change the cap. Several members reminded the chamber what it was like campaigning during the last election cycle when property taxpayers asked for relief.
Rep. Cynthia Browning, D-Arlington, said low spending districts will get hit, districts that just merged will pay penalties and some districts will be whacked for implementing pre-K.
“You may say you don’t want to vote for higher property taxes, but if you vote against this amendment you are voting for higher tax rates for some districts,” Browning said. “You aren’t voting against higher property taxes. You may have a lower property tax rate but you’re voting for higher taxes for any district in the penalty box.”
Lawmakers have a choice, according to Browning, they can either lessen the burden on districts not meeting the thresholds and allow them more time to work on their issue or impose a penalty on them.
But House Ed Committee’s Rep. Tim Jerman, D-Essex Junction, saw it differently. He said the amendment sends a strong message to towns that the legislature listened to them. “It isn’t perfect but we have something to go to the other body with that we find reasonable.”
Minutes later, the amended S.233 got a chilly reception from the chair of the Senate Committee on Education, Sen. Ann Cummings, D-Washington.
“Why should we potentially penalize towns who are low spending whose only crime is that they have more kids they have to tuition to high school than last year, or they had more kids move in with special needs, or who don’t have a fund balance because they put in a wood chip rather than oil furnace? We trusted them once and we found out we were nailing half the low spending schools in Vermont,” Cummings said.
The House-amended bill now goes to the Senate for a vote and if it fails there the spending thresholds in Act 46 will remain in place as they were originally written. Cummings says she doesn’t plan to compromise adding, “They did this to themselves.”
