Public Assets Institute > Policy Areas > Education > Vermont Is Getting Its Money’s Worth

Vermont Is Getting Its Money’s Worth

This piece originally appeared in the Vermont School Boards Association’s October 2013 newsletter.

Last year brought good news for Vermont’s 15-year-old school funding system. An extensive study for the Legislature by Lawrence O. Picus and Associates concluded that Vermont provides “equal access to all towns for raising revenues for pre-K-12 education.” Further, the study found, the system “has reduced the variation in student achievement in reading and mathematics across schools.” Vermont’s school funding system is fair to taxpayers because all school districts have the same ability to raise revenue for their schools. And that’s been good for students.

That success speaks well of Vermonters, who have long recognized that educating our children is one of our most important responsibilities as a state. In fact it’s so important that it’s specifically mentioned in the Vermont Constitution.

Still, some people argue that the state is spending too much for education. They’ve been calling for new controls on spending or school consolidation as a way to bring costs down. And the question is alive every year when each school board asks for approval of a budget at Town Meeting.

Is Vermont spending too much? Let’s look. In relative terms, statewide spending for public pre-K-12 education in Vermont has held steady for 20 years—at about 5.5 to 6 percent of the state’s economy (gross state product, or GSP). Compare that to statewide health care expenditures. They’ve doubled from about 10 percent of GSP in 1992 to nearly 20 percent in 2012. The growth in health care costs is clearly a problem; our spending on education—measured against the overall economy—is sustainable.

Vermont’s per-pupil spending does rank high among the states: 5th in the US Census ranking, 2nd in the NEA’s. But, shouldn’t every state want to be first when it comes to education? Let’s look at what Vermont’s getting for its money:

Vermont’s public school students have among the highest test scores in the country and the highest (or second highest) graduation rate. Do we want to strive for mediocrity instead?

Because Vermont has an equitable system, we spend close to the statewide per-pupil average on every student. Other states keep their averages—and their taxes—down by spending an inadequate amount on lots of children. Vermont used to shortchange many of its kids too. Do we want to reduce our average spending by returning to the old inequitable system?

Another angle on spending is to consider the private marketplace. According to a 2011 study in Massachusetts, non-religious private schools spent $32,000 per pupil, not including room and board. That compares with public schools, which spent $13,000 per pupil in the same year. The study concludes that the market value of a high quality education is much nearer to $32,000 than $13,000. In other words, public schools are not too expensive; they’re a bargain.

So is Vermont spending too much? Only if you think that demonstrated excellent results and equitable treatment of students and taxpayers—all at a competitive price—is too much.

Paul A. Cillo is President of Public Assets Institute a nonpartisan nonprofit in Montpelier that promotes sound budget, tax, and economic policies that benefit all Vermonters.

Posted by Paul Cillo on October 30, 2013 at 1:31 pm

5 Responses to “Vermont Is Getting Its Money’s Worth”

  1. Norm Etkind says:

    I wonder whether all states include their spending for school capital (building) costs in their cost per student number. Some states directly pay a substantial share of school construction costs. The State of Vermont, with a few exceptions, currently pays nothing.

  2. Rick Gordon says:

    This is a little deceptive with stats. School spending as a percent of GSP is misleading as it doesn’t at all account for student population. This mirrorss the charade of how annual district spending increases are reported in the media (budget only up 4%!…). When student population is dropping 1% or more each year, a taxpayer may wonder why school budgets don’t drop with the decreasing population (or at least hold steady).
    There are countless reasons school spending is relatively high in Vermont, not each of which relates to better education. One comparison rarely made is comparing teacher salaries to statewide family income. One side of teacher salary negotiations involves comparisons to salaries in other (mostly much higher income) states. With school taxes paid by local taxpayers, the real burden of relatively high teacher salaries for relatively low income earners at some point becomes untenable. I’d love to see Mr. Cillo compare teacher salaries to state average income in all states and see where Vermont stands on this.
    Consolidation, in many cases, does not save money, but there are many other options to consider for how to use our educational resources, both public and independent, more efficiently to serve every child.
    As is the nature of blog posts, this oversimplifies a complex set of factors into a simplistic “spending more is better” case that deserves much more teasing out.

  3. Liz Curry says:

    Norm raises an important point. While the quality of Vermont’s education may be among the highest in the nation, deferred maintenance is catching up with us and can undermine our success. Not to sound like a broken record, but despite Art Wolff’s population projections, Burlington is experienced quite strong growth in enrollment due to a consistent in migration of New Americans from the VT Refugee Resettlement Program. If the state continues to turn its back on capital needs, our largest city won’t be able to educate all of its students with the same level of services due to overcrowding and substandard environments. Investment in quality education, like investment in housing quality, involves recapitalizing our assets as well.

  4. Rick Cowan says:

    Interesting article, Paul. The only thing missing from your analysis of economic sustainability of our education spending is to compare the median income of Vermont to that of the first 5 states in per pupil expenditures. This is where the problem occurs. We are 5th in per pupil spending but 19th in median income with 4 of the 5 states “above” us having substantially larger median incomes. With a shrinking school age population and one of the oldest populations of any state in the US, our already high taxes will become more so. That doesn’t seem a sustainable path to me.

  5. jeffrey sonshine says:

    Speaking as a vacation homeowner, I think Act 60 looks like a house of cards. Basically, Vermont has a large lower income population. I’ve seen my property taxes go from $1250/year to $7000/year. During the same time, vacation property prices are stagnant.

    I consider myself fairly well off and when I purchased the property, I seriously considered retiring to Vermont. That consideration is now off the table. I think the way Vermont handles their cost of education is not a good solution. The state should be able to pay for their education with revenues from Vermonters, not from out of staters. My guess is that with all the extra money to spend, people’s natural tendency is to spend irresponsibly and raise taxes, spend and raise taxes. The number of people moving here is dropping because the cost of living here is increasing so dramatically.

    I used to be someone who recommended Vermont as a great place to live. Now, I have to include a caveat that the taxes are very high, as high as the highest in the country. That’s a deal killer for most people. Eventually, the house of cards will fall.