What’s next for Vt’s education system?

By Ann Manwaring

Editor’s note: Ann Manwaring of Wilmington, a former Democratic state representative who served from 2007-2017.

For six of the 10 years I was in the Legislature, representing the towns of Wilmington, Whitingham and Halifax, I was on the Appropriations Committee. We spent a good deal of our time in that committee listening to state agency administrators present their financial needs for the ensuing fiscal year, beginning the next July 1. By the end of the budget process, when the governor finally signed the “big bill” as it is affectionately known, every state agency knew how much money it had to do its work for the following year.

Schools in Vermont have no such assurance, as the money each school receives for the work it is expected to do travels with students. Schools don’t know until school starts in the fall, two months after their fiscal year begins, what their student population will be, and thus what their revenues will be.

This is a tough way to run any organization, whether it is for-profit, non-profit or public entity — especially one that is so essential to the wellbeing of all of us. Larger districts fare better than smaller ones, but all of necessity have had to adopt strategies to cope, some of which might have the unintended consequence of putting upward pressure on their budgets, and thus the property tax. This is a direct result of the shift from local financing of education to the Act 60/68 financing framework.

Education in Vermont is a statewide system tied together by its financing structure. Please do not think that because I am from one of the fabled “gold towns” that I am trying to upend Act 60. I am not! But I do hope that the powers at the state level will recognize that for any system to be effective for those who benefit from its work and for those who pay to support the work, financing, effective organizational structure and transparent accountability are all needed.

As the Legislature struggles with this year’s notable increases in property tax rates, I’d like to suggest some “what-ifs.”

What if instead of distributing funds from the state education fund in one bucket which includes all costs based on the equalized pupil count for each school, as is now the case, the Legislature were to create two buckets?

One bucket would continue to travel with the student and include all those costs directly associated with student outcomes, such as teacher salaries, curriculum development, classroom supports, food service, libraries, sports and others.

The second bucket would include facilities costs such as building and grounds maintenance, utilities, heat, staff caring for infrastructure, bond payments, etc. This bucket would be given to schools at the beginning of the fiscal year, thus granting to schools for the first time since Act 60 assurance of at least a portion of their financing needs for the school year. Both buckets would be derived from the locally enacted budgets, as is now the case.

One benefit would be to diminish uncertainty of how to operate a school, inherent in the present system. Other possible outcomes of a two-bucket strategy might be 1) better  accountability for a significant portion of school spending as facilities management is more straightforward, 2) possible additional shared services might be recognized, and 3) opportunities to manage school capital financing differently might arise.

What if property tax increases caused by legislative actions were managed differently?

I was part of a small legislative working group whose task was to identify all the legislative actions that caused increased costs to schools. We identified 130 pieces of legislation enacted in the previous five years. The cost impact of some was small, such as the requirement for using healthy cleaning products, and some were significan’t such as pre-K.

All were worthy of consideration. But legislators were asked to evaluate only the value of the proposal, not how to raise the revenues to pay for it. As a result, legislators are given a free pass to celebrate improved services without the burden of voting to raise taxes to pay for the action.

This is fundamentally different than program or policy changes that are part of the state’s income-tax-supported General Fund obligations. Vermont has created a system to assure that new policy or program initiatives to be operated by state government are paid for within existing revenues. It works!

Vermont is able to live within its budget based on expected revenues, even though we, unlike most states, have no constitutional requirement for a balanced budget. It works also, in part, because legislators are loath to vote to increase taxes or fees, regardless of the value of the proposal.

And finally, what if the state took significantly more responsibility for the portion of the education fund that comes from property taxes (over $1.4 billion projected for FY2025), with the same understanding and commitment now afforded General Fund revenues and spending? What if the state took as its mission to complete the changeover inherent in Act 60 by embracing not just financing, but also effective operations and transparent accountability? All three are necessary for a well-functioning system.