Start making sense on how we pay for education

During the campaign season all over Vermont, candidates for every state office heard that property taxes are the top concern on voters’ minds.

“When I go out and knock on doors, the thing I hear people really concerned about is the cost of education, property taxes and making sure that we get the return on our investment in our education system,” said House Speaker Shap Smith, D-Morristown, a few weeks before being re-elected. “So I think that should be one of our major priorities.”

The trouble is that, while voters can hold the lid on municipal and school budgets, they can’t do a thing about the state tax bill for schools, which accounts for the lion’s share of every tax burden. To be clear, the statewide tax is a good thing, because communities pay what they can afford, and every school district can give more or less the same educational opportunity to its students.

It didn’t used to be that way. Until 1997, local property taxes supplied all the money to run local schools. That was easy to understand, but it wasn’t fair. Not all towns are created equal. Fortunate towns such as Stowe have a huge pool of property to tax, and with relatively few students, the tax rate was relatively low. In less prosperous towns, the tax rate had to be exorbitant to raise enough money for education.

The town-to-town variations in property tax burdens became so wide that the Vermont Supreme Court ruled the system unconstitutional. The court required state government to design a fair system.

The result is what we have now — a statewide property tax for schools, but with so many permutations it’s hard to follow. For instance:

• Families with household incomes below about $90,000 are taxed according to their income, not their property.

• Every community’s school-tax burden is adjusted by the common level of appraisal, a process hardly anyone can understand. What chance do mere voters have?

• State aid is based partly on enrollment, but that doesn’t mean simply counting up how many students are in school. No, Vermont uses “equalized pupils,” assigning weight to different categories of children. For instance, students in high school or from low-income households count more than pre-kindergarten kids, because they cost more to educate. Again, the system becomes more difficult to follow.

• The nonprofit Campaign for Vermont says that, for fiscal 2014, “equalized pupil” and “education spending” calculations reallocated 2,912 students among school districts, with Burlington, Mount Anthony, Brattleboro and Rutland student count increasing, while Williston, South Burlington, Shelburne, Essex Town and Waterbury-Duxbury dropped. Those changes affect local school taxes. The more “equalized students,” the more state aid, and vice versa.

State leaders are more than willing to talk about school financing, but are loath to disrupt the state’s traditions of hyper-local schools. At the same time, everybody complains about school costs, which continue to rise every year, even through enrollment has been dropping for a decade.

Let’s start from scratch: If you were building a Vermont school system today, would it look like this? 251 town school districts and 39 regional union school districts, plus 46 supervisory unions that oversee groups of school districts. That’s an awful lot of school superintendents, principals and teachers unions.

Here’s an underlying principle: If schools are structured in a way that makes sense, then it’s much easier to devise a financing system that makes sense — one that voters can understand, and thus support.

Rep. Heidi Scheuermann, R-Stowe, has been among the thought leaders in this area, proposing schools be organized into 16 regional districts to allow streamlining and efficiencies of scale. That approach could also lead to rethinking exactly how things are done. For instance, a study by the Vermont School Boards Association found huge savings available on school staff health insurance — $39 million a year with gold-level insurance through the Vermont health care exchange, and between $83 million and $119 million through the state’s planned single-payer system. The latter move would slice $240 to $360 off the annual tax bill on a $300,000 house, without touching the classrooms. Wouldn’t that be nice?