Legislature can prevent Town Meeting chaos
The Vermont Legislature has an opportunity to show respect to local voters and local school officials by getting two things done before the end of January:
- Repeal the rigid spending limits that threaten to unnecessarily increase property taxes this year.
- Set the education tax yields for fiscal 2017 so that voters will know the tax consequences of their school budgets on Town Meeting Day.
It’s imperative for the Legislature to act quickly on both of these because school boards—and voters—now are getting contradictory messages.
Act 46, the law passed late last spring, imposes tax penalties to try to force school districts to curb spending increases. In the meantime, the tax commissioner has recommended using a surplus in the Education Fund to cut property taxes this year, making it easier for school boards to increase their spending.
Sen. Ann Cummings, D-Washington, the chair of the Senate Education Committee, had it right when she told Vermont Public Radio earlier this week that the tax penalties imposed by Act 46 should be repealed.
“We have put almost every school in the state into the penalty phase, so property taxes are going up, which was not the idea,” Cummings said. “I think we took a stab at it, it didn’t work, and it’s time to go back to square one.”
Act 46 sets a spending increase limit for each school district in the state. The limits are based on a sliding-scale. The Legislature decided how much education spending should be allowed to increase in fiscal 2017, and then calculated each school’s share of the allowed increase. Districts that already had relatively high per-pupil spending would be allowed smaller increases than lower-spending districts. But the spending limits ignore the needs or circumstances of individual schools and disregard the role of local voters and what they may want for their children.
Residents of districts that spend beyond the level dictated by the Legislature will be forced to pay a tax penalty.
The spending limits violate a fundamental fairness principle of Vermont’s education funding system: Districts with the same education spending per pupil have the same tax rates. If Town A and Town B both spend $15,000 per pupil, taxpayers in those towns have the same tax rates. Under Act 46, however, if Town A exceeded its cap by spending $15,000 per pupil but Town B spent $15,000 while staying within its cap, then residents of Town A would pay higher tax rates than Town B even though per-pupil spending was the same for both towns.
In addition to being unfair, Act 46, according to the Vermont ACLU, is probably unconstitutional.
Instead of micromanaging school budgets throughout the state, the Legislature could actually help local school boards this year by setting tax rates for fiscal 2017 before the end of January, which is the deadline for printing warnings for Town Meeting.
It’s been 11 years since a bill setting education tax rates was approved by both the House and Senate in time for Town Meeting. That has meant that voters could not be certain of their tax impacts when they approved their school budgets. In recent years, the estimated tax rates provided at Town Meeting were higher or lower than the final rates approved by the Legislature.
There is no reason the Legislature can’t get this work done in January.
Repeal of the tax penalties also can be accomplished in January. In addition to several legislators, Gov. Peter Shumlin has called for repeal. In the meantime, school boards are adopting budgets that they believe meet the needs of their students and are crossing their fingers that the Legislature will somehow rollback the onerous penalties.
Setting fiscal 2017 tax rates and repealing the tax penalties are two simple steps that the Legislature can take in January to avoid the chaos that is otherwise likely to occur come March.
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