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2011 state budget plans raise property taxes

Vermont property taxpayers will be taking it on the chin this year. Given the rhetoric they’ve been hearing all year from Montpelier, they have reason to be upset.

First, the governor repeated his (erroneous) claim that education spending was out of control, and proposed a plan he said would reduce property taxes. What he didn’t mention was that for his plan to work local school districts would have to make dramatic cuts to their school budgets, and most of the savings would accrue to the state to help balance the General Fund budget.

Next came the Legislature and endless discussions about school consolidation and improved efficiency. Lawmakers were starting to hear from local school boards that taxes were going up despite their efforts to curb spending. Legislators wanted to appear to be doing something, even if they couldn’t quite articulate the problem they were trying to solve.

What the proposed fiscal 2011 budget will do—in contrast to what people have been saying—is raise property taxes. The state property tax rate may or may not go up for next year. The House version of the budget keeps the rate the same as this year; the Senate increases it a penny, to 87 cents per $100 of assessed value.

But the bigger problem is that both the House and Senate are underfunding the Education Fund again. Both are withholding almost $25 million that should have been transferred from the General Fund to the Education Fund. And the Senate is diverting almost $9 million more that should have gone into the Education Fund but now is going to be used to balance the General Fund.

Local school boards and local voters did their part this year. There will be essentially no growth next year in education spending, which is the important number because it determines the tax rate. Many districts actually reduced their education spending, but overall it’s up a small fraction of one percent.

That’s not easy. Even in this recession, schools are facing cost increases for health care, fuel, and salaries. Despite what the bean counters think, reducing staff to match declining enrollments is not a simple exercise. To even just level fund their budgets, school boards had to make cuts to programs, which diminishes the quality of education.

Local communities, therefore, will have to suffer the consequences of these cuts, but they are not being compensated with lower school taxes. Education spending will be flat next year, but residential and non-residential taxes are projected to increase almost $6 million in the House-passed budget or more than $22 million in the Senate version.

Property taxes should be going down, and they would be if the House and Senate weren’t short-changing the Education Fund. However, to meet their obligations to the Education Fund, the Legislature would have to raise some other broad-based taxes or make even more damaging cuts to the General Fund. It’s good they ruled out additional cuts. But once they acknowledged that they would need more revenue, there should have been an open debate about which taxes to raise.

They avoided such open debate because it’s an election year. But make no mistake, they decided to raise property taxes when they chose to short-change the Education Fund.

Posted by Jack Hoffman on April 29, 2010 at 3:54 pm

4 Responses to “2011 state budget plans raise property taxes”

  1. Willem Post says:

    I think the less state involvement and money in local education the better. It is time to start a fee system. The basics are provided for free. The rest parents have to pay for.

    Vermont has one of the lowest ratios of students per administrative employee.
    Vermont has one of the lowest ratios of students per teacher
    Vermont does have good education, but other states with higher above ratios have better outcomes.

    Also the automatic step increases, plus cost of living increases, plus gold-plated benefit packages, all far exceed those of other Vermont workers who collectively have been backsliding.

    Vermont’s workers are not stupid. They know something is out of kilter.
    Willem Post

  2. Mary Ellen Mandrell says:

    Education spending is indeed out of control in Vermont. And our students aren’t any wiser for all this excess spending on programs and gadgets (low achievement scores are proof of this).

  3. Ken Fredette says:

    Nicely done, Sarah. The people need to know that school boards across the state have been working hard (as always), and that while our governor and others continue to blame us for increased property taxes, the fact is efforts on their part have driven the burden ever higher. This is not new…the Ed Fund has been short-changed for years now.

    Thank you and the PAI for crying foul. Keep up the good work.

    Ken Fredette,

    Wallingford School Board,

    First Vice-President, VSBA,

    Proud member of the “Education Establishment”

  4. David Usher says:

    The argument for underfunding the Education Fund might be reasonable if education spending in Vermont were reasonable by comparison with other states. It’s not. In the face of declining enrollment, Vermont’s education establishment continues to resist the reality that there are too many staff for too few students and that number continues to shrink.

    We simply cannot afford Vermont’s K-12 education system, wherever the source of the money to fund it. It’s past time for a more cost-effective system and quality need not decline if costs are reduced rationally over time.