Public Assets Institute > Policy Areas > Education > What’s the cost of cost containment?

What’s the cost of cost containment?

Cost containment is the watchword around public education this legislative session, with a focus on “high spenders.” The assumption seems to be that reining in high-spending school districts will free up lots of money for low-spending districts and also lower property taxes for everyone.

No one has defined “high spender” or “low spender,” although for some legislators the terms appear relative to their own towns’ spending. But one way to analyze education spending is to see where the majority of pupils fall and then look at who lies above and below.

As the infographic shows, per-pupil spending for two-thirds of Vermont students this year falls between about $14,000 and $16,750. The average is $15,368, so two-thirds of students are within about $1,400—plus or minus—of the average.­

To be sure, there are students outside this middle range. But there aren’t many, and not enough to have much effect on the overall cost of education. There are some towns with per-pupil spending above $20,000 this year. But they have only 28 students. And while there are some larger districts that spend more than the middle range, their spending is only slightly above $16,750.

The bottom line is: If the Legislature came up with a way to force all “high spenders” into the middle range, to spend no more than $16,750 per pupil, it would reduce total education spending by less than 1 percent. It would save less money than the Legislature gave away in tax incentives for school mergers. Overhauling Vermont’s school funding system in order to crack down on “high spenders” wouldn’t save enough money to justify the turmoil it would cause for all districts.

Before legislators decide to overturn the existing system, they need to take a step back and figure out the problem they’re trying to solve. If “high-spending” districts are the problem, the Legislature needs to understand the cause. Five of the 15 highest-spending towns are non-operating districts. They don’t operate their own schools; they pay tuition to send their kids to other districts. The threat of onerous property tax rates—the Legislature’s preferred method for reducing property taxes—isn’t going to make these towns more efficient.

Similarly, four out the six lowest-spending towns are non-operating districts. Legislators hoping that restructuring to relieve tax pressure on low spenders will free those towns to spend more are also likely to be disappointed. Tax pressure apparently is not driving the decisions in these towns.

And those who are beating the drum of cost containment this year might want to recalibrate their conclusion that Vermont spends too much on education. This assessment, which we’ve heard since the Governor Douglas years, is based on what other states spend. The assertion is that Vermont spends “too much” because it’s some percent higher than the national average.

That national average includes states like Kansas, Oklahoma, and West Virginia, where teachers have had to go on strike this year to try to force their legislatures to adequately fund education. Is this what we want for Vermont?

In view of the protests over school funding in other states, we might want to reflect on our own goals and consider the cost of cost containment. Kansas and West Virginia spend less per pupil than Vermont, and their student performance suffers; it doesn’t compete with Vermont’s.

We get to choose.

Posted by Jack Hoffman on April 5, 2018 at 3:53 pm

2 Responses to “What’s the cost of cost containment?”

  1. Wendell Coleman says:


    Very good and thought provoking analysis!!

  2. Craig Gilborn says:

    Public colleges and universities are not expected to cost the same per student, nor should public schools. When Vermont gathered taxes to redistribute more equitably to all schools,, that should not become the pretext to make them follow the same bottom line.