Because of a relatively robust economy, a sudden windfall from online sales taxes, and growth in grand list values, Vermont will have a little extra cash on hand when lawmakers come back in January.
Officials across the state’s education world — from child-care advocates to the state colleges — have plenty of ideas about what to do with that money. VTDigger talked with key interest groups to see what they’ll be asking from the Legislature this round.
PreK-12 funding
Lawmakers are expected to pick up a perennial debate again this year: how — and how much — should we fund Vermont’s preK-12 public schools?
The Vermont-NEA will push to eliminate the residential property tax that pays for pre-K-12 schools by expanding the income tax. Currently, that levy contributes over $400 million to the state’s education fund (the union would keep in place the property tax on second homes and businesses, which contributes over $600 million to the ed fund).
It’s unclear if lawmakers have an appetite for the wholesale elimination of the residential property tax. But certain liberal lawmakers have long sought to move to a more income-based system.
Gov. Phil Scott, meanwhile, is expected to once again pursue cost-containment strategies, although his administration has thus far remained mum on the details of any forthcoming proposals.
The governor set up a task force last year to study student-to-staff ratios, which are comparatively low in Vermont, especially in small, rural schools. It is expected to report back this month with recommendations to the Legislature.
Pension debt
Vermont’s state employee and teachers pensions were underfunded for years in the ’90s and early 2000s, and the state has been trying to catch up on its ballooning liabilities in the retirement funds ever since. Pension watchers had long predicted the situation could lead the state’s credit rating to fall, and in October it did, as Moody’s Investor Service downgraded the state’s long-standing Triple-A rating.
A debate over what to do with the pension is coming. Darren Allen, spokesperson for the NEA, stands behind Vermont Treasurer Beth Pearce’s “approach to ensuring the promises made to teachers are kept.”
Pearce said she wants a “risk assessment” to see where the pension stands. And in the meantime, she said Vermont needs to stick to the repayment plan it already has laid out – and make extra payments wherever it can.
“The bottom line is there are no quick fixes,” she said.
The Scott administration has thus far stayed mum about its own plans for the pension. But a switch to defined contribution plans — which Scott has advocated for in the past — appears to be off the table for now.
Higher education
The state’s higher education community in Vermont has long bemoaned Vermont’s perennial bottom-of-the-barrel ranking in state funding for public colleges. The Vermont State Colleges System, which includes Castleton University, Northern Vermont University, Vermont Technical College, and the Community College of Vermont, is asking the Legislature this session to increase its annual appropriation by $25 million over a five-year period.
The system currently only gets about 17 percent of its budget from the state. Raising its state appropriations by $25 million would increase state funding to 30 percent, which the VSC says is in line with other New England states.
In exchange, they’re promising to freeze tuition for Vermonters for at least two years. And college officials have suggested one place to go to fund their initiative – the new revenues expected from online sales taxes, which are expected to bring in $7 million in FY 2020.
But the VSC aren’t the only ones eyeing that pot of money. Scott, for his part, has said he wants that money to go toward child care subsidies for low-income families. That’s at the same time as many leaders in the public K-12 system, meanwhile, argue that that money is already spoken for – 100 percent of sales and use tax revenues were promised to public schools, they note, when lawmakers last tweaked the education fund.
Act 46
The school district consolidation law that was passed in 2015 has just concluded its final and most controversial phase – forced mergers. Three lawsuits have have been filed contesting the State Board of Education’s final plan under the law to reorganize those districts that didn’t voluntarily consolidate.
Lawmakers from communities facing forced mergers are expected to file legislation either blocking implementation of the state board’s plan or writing additional leniency into the consolidation law.
Margaret MacLean, an organizer with Vermonters for Schools and Community, a group fighting forced mergers, said the top priority is to put a hold on the consolidations mandated by the State Board while the litigation gets underway. If neither lawmakers nor the courts decide to stay the mergers in the interim, the newly consolidated districts would go online starting July 1, 2019, which means school boards would need to put consolidated budgets before voters this Town Meeting Day.
“We’re hoping that there would be a moratorium until the constitutional issues are resolved by the court. That’s our main request at this point,” MacLean said.
Child care and early education
Janet McLaughlin, the executive director of Let’s Grow Kids, a nonprofit that advocates for child care providers and access to early education, says the group has three priorities in the upcoming session: more subsidies for child care, support for the early education workforce, and incentives for employers who want to help with child care.
“Our goal is to have the state Legislature and the state administration have the budget reflect our state’s core commitment to meeting our families’ child care needs,” McLaughlin said.
She said the nonprofit wants to see expanded eligibility for child care subsidies for low-income families, and the subsidies themselves increased. Let’s Grow Kids also wants to address the workforce squeeze at child care centers, which increasingly have a tough time recruiting because of the sector’s low wages. That could take the form of scholarships for people going into the field, loan repayment programs, or tax credits, McLaughlin said.
And finally, Let’s Grow Kids will push for tax credits for businesses that offer child care benefits.
Act 166 of 2014, which implemented 10 hours of publicly funded universal pre-K, will also likely be revisited by legislators. The program, which is jointly overseen by two state agencies, has been an administrative boondoggle for both providers and state regulators, and a recently released state report found a steep decline in home-based providers since 2015. Secretary of Education Dan French has said finding a fix for the program is a major priority.
