End of ARRA shouldn’t mean another cost shift to schools
A story by the Associated Press last month carries a warning for Vermont. It describes cuts to education that many states are preparing to make after federal stimulus money runs out.
We’re in a similar boat here. We used funding from the American Recovery and Reinvestment Act (ARRA) to avoid making harmful cuts during the recession. If we don’t develop a strategy to replace the federal money, we won’t have really avoided the harm—just postponed it. Local voters once again will face a choice between raising property taxes or undermining their kids’ education.
Much of the ARRA money was designated for specific purposes. However, there was also a pot of so-called “fiscal stabilization” funding that was given to the states with few strings attached. Tax revenues had taken a nosedive. All of the states were facing big budget deficits. These funds were meant to help fill the gaps.
Vermont used the bulk of its fiscal stabilization money for education—specifically, to make up for cuts in General Fund spending. Every year, money is appropriated from Vermont’s General Fund to the Education Fund. For the last two years, the administration and the Legislature reduced the transfer by about $60 million, but backfilled only about two-thirds of the cut with ARRA money. That left Vermonters paying higher property taxes.
The cuts were supposed to be temporary—and full funding of the transfer restored in fiscal 2012. But in the budget he presented in January, the governor put back only part of the money and proposed a permanent reduction to the transfer of $23 million—nearly 8 percent.
That cut won’t be felt quite as much in the coming year because there is some additional federal money—about $19 million—that is going directly to school districts. But in 2013, if the Legislature goes along with this permanent education cut, local districts will be left holding the bag again as they were early in the recession. Neither the administration nor the Legislature is willing to raise taxes directly for education, but they don’t seem to mind shifting costs onto school districts, which forces local education officials to cut programs or once again ask for higher property taxes.
Vermont schools provide quality education to a very diverse student body, including children w/ chronic illnesses, behavioral and developmental conditions, and family and soccio-economic issues that that affect children’s ability to learn. Our schools need more funding to prepare children for the future, including post secondary education, so they can be happy, productive adults , and ensure Vermont and the US can compete in the global economy.
If the tax rate were raised on the top 2447 households (2007 tax data) in Vermont to leave them with an average after-tax income of $1.3 million dollars, there would be an extra $1.8 billion in tax revenues. It’s time we started looking at equitable taxation in Vermont. In the whole country, for that matter.
The biggest cost shift in public educatiopn has been
1) the overall growth in noninflated dollars per student. This growth since 1950 is over 400%.
2.) the second cost shift has been from the direct instruction of children to administrative bureaucracy. In 1950 public edcuation expended over 70% of their funds for direct instruction. Today, less than 30% of school tax dollars are expended on instruction. School administrative costs have reisen from 7% of funds to over 33% of funds.
Teachers salaries have been reduced in 1950 constant dollars by over 20%. Teachers respond to this cost shift by fleeing public schools at a higher drop-out rate than the students.
Is school failure still an myster?