Report on Vermont Education Funding System

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Vermont Education Funding System Report (Executive Summary)
Vermont Education Funding System Report (Full Report)
Vermont Realtors® Press Release: VR Calls for Changes to Ed Finance System
Chart: Spending Per Pupil
Chart: Total Spending and Enrollment Changes

Isaac Chavez, Chief Executive Officer
Vermont Realtors®
(802) 229-0513

WCAX.COM Local Vermont News, Weather and Sports-

The Vermont Realtors® recently commissioned a study of Vermont’s education finance system. The study, conducted by Art Woolf and Richard Heaps of Northern Economic Consulting, examined spending patterns since the enactment of Act 60 and the decline in student enrollment. Woolf and Heaps also critiqued the current finance system, noting its successes and failures.

“The report graphically illustrates much of what we’ve heard anecdotally over the years – that we have a financing system lacking effective cost-control measures. The lack of effective cost-controls in the current system is its fatal flaw, and it must be addressed,” said Vermont Realtors® President Donna Cusson. “We find ourselves in a situation where no one is to blame, but we are all responsible for keeping the outdated infrastructure in place. Our school system today reflects 19th Century Vermont life with infrastructure scaled for student enrollment and settlement patterns that no longer exist. Long gone are the days of impassable networks of narrow dirt roads and large farm families where children walked to town school. The current system is simply unsustainable. It is less expensive to run a full school bus than it is to operate a nearly empty school.”

Both total spending and per pupil spending have increased dramatically in the last 15 years, while the total student population has declined by nearly 15% over that same time, according to Cusson. “Vermonters cannot afford to pay more and more money to educate a smaller and smaller group of school children. We need to make changes, and we need to start making those changes now,” said Cusson, citing the data of a system in crisis.

Vermont Realtors® acknowledge that reforming Vermont’s education finance system is a significant challenge and that meaningful change may not come swiftly. “We know this is not a simple task,” said Cusson. “Our current system is horribly complex, and there are many competing interests and differing viewpoints that should be considered. With that said, though, we think that policymakers should proceed in the legislative session with some short-term changes that will bend the spending curve while a more comprehensive overhaul is designed. This will take courage and conviction, but we all agree that the primary goal is doing the best for our children and their future.”

Vermont Realtors® is recommending that income sensitivity and the small school program are issues that should be addressed in the 2014 legislative session. “One of our concerns is that income sensitivity insulates more than 60% of Vermont households from the full impact of their spending decisions. This spending de-sensitivity has led to an unsustainable growth in spending, and we should re-sensitize more Vermonters to their choices at Town Meetings,” said Cusson. “There may be other ways to accomplish this task, but a simple way to do it would be to lower the income cut-off for sensitivity.”

The other change identified by Cusson is the state’s small school grant program. “The small school grant program artificially supports smaller schools whose students might be better served with better educational outcomes at a lower cost through consolidation with nearby schools. We believe the legislature should consider reducing the overall expenditure on the program, as well as award grants competitively to small schools based on considerations such as geographic need and the capacity of adjoining schools.”

These two changes to the current system are modest, yet important steps toward reducing the growth rate in education spending. They are not substitutes for more sweeping changes needed to finance a pre-K through 12 system that educates students capable of competing in national and international economies. Defining the parameters of such a finance system at this point is impossible, but Vermont Realtors® suggest that policymakers should be guided by a number of key priorities.

First, that the finance system must be capable of providing the resources at a level sufficient to build a high quality education system, and it must do so in a way that is consistent with the Vermont Supreme Court’s Brigham decision. Structural reforms to the larger education delivery system, including consolidation and governance changes, should be part of this discussion.

Second, the finance system must contain effective cost controls. Expenditures cannot grow unabated as student enrollments decline, and voters must feel the weight of their spending decisions. Local control only works when it comes hand in hand with local responsibility. Finally, the new system must be simple to understand. Acts 60 and 68’s Byzantine complexity is one of the current system’s major flaws. Voters need to see clearly the consequences of their decisions.

There are huge benefits to Vermonters from adapting our education system to the 21st Century.

  • Reduced property taxes enable saving for our children’s future education and our underfunded retirement investments
  • Surplus funds currently spent to sustain an inefficient education system could be used to enhance curriculum and acquire innovate teaching tools
  • Lower property taxes would make Vermont a more attractive place for business creation, expansion and relocation providing jobs for our graduates to stay home in the Green Mountain State and stem the flow of the ‘brain drain’
  • Buyers shopping for a second home or looking to retire would be encouraged to choose Vermont, a state that leads the nation in the areas of excellent medical care, a healthy environment and low crime
  • The creation of better, lower-cost schools helps us to compete in a global economy