February 21, 2010

The Myth of Local Control 021010

(Published in the Colchester Sun February 18, 2010)

The Myth of Local Control

Vermont's reputation of local school boards and voters balancing the tough choices between spending and taxes is mostly myth. The reality is that state K-12 education costs and the funding scheme that feeds them is breaking the backs of taxpayers and the state budget. True control rests with the Legislature.

Funding and spending for education is a jumble of sources, rules, regulations, formulas and obscure budget mechanisms. Few citizens understand this complex stream of policies and rules flowing from the Legislature and the Department of Education. Unless more taxpayers understand and experience the financial effects of their votes, local control is a fantasy.

Here's why. The General Assembly enacted laws that now shield approximately 65% of property taxpayers from the full tax effect of local education spending decisions. This income sensitivity mechanism effectively warps the choices local taxpayers make. A local budget 'yes' vote is too easy because so many property taxpayers/school budget voters are shielded and desensitized from the full financial consequences of their decisions.

Common sense says that desensitized voters probably are far too generous spending others’ money than when voting to spend their own. The Legislature has gone far overboard with income sensitivity rules originally intended to protect low income earners from high homestead property taxes. A correction is essential.

Reductions in income sensitivity are long overdue as statewide school spending per student has grown 6.7% annually for ten years.

Instead of voting real change, state politicians resort to salving us with frequent references to maintaining local control. This implies that Vermont's over-spending on education is a 'good thing,' the result of budget decisions made by local school boards and endorsed by local voters. That is only partially true. Talk with anyone in the school system and they will tell you how 'the state' has loaded them up with unfunded mandates and requirements that increase local costs.

Certainly, voters have the power to approve or reject local education budgets, and school boards have the power to hire, fire, train and manage staff to implement local education. However, the degree of voter control is subtly manipulated by income sensitivity formulas.

The complex web of laws, rules, regulations and standards from the Department of Education for curriculum, class size, special education, and other details are cumbersome and costly. This combination of overly broad income sensitivity rules combined with these mandates, arcane formulas and standards work against true local control.

Act 60 followed by Act 68 set off an unsustainable education spending spree consuming half of Vermont's state budget.

Look at it this way: 100% of education property taxes (net of prebate) pay for approximately 66% of education spending; plus 45% of personal income taxes pay for approximately 23% of education spending; plus 33% of sales taxes pay for approximately 9% of total education spending.

As Montpelier struggles to balance a budget during this session, Gov. Douglas and Treasurer Jeb Spaulding have recommended modest changes to constrain the exorbitant costs of K-12 education. Among them, increasing the retirement age and contribution rules for the abundant education staff and including retirement costs in the Education Fund where they belong.

To their credit, some teachers and their union have finally publicly demonstrated willingness to share more costs of their retirement and offered to freeze salaries in some towns. However, more cost control is needed as student enrollment continues to decline.

Indeed, the Legislature should include the full cost of education, including pension and post-retirement health care benefits in the Education Fund. This would not be an automatic tax increase as many would have us believe. Instead, local voters would be empowered and stimulated to turn local education control from myth to reality.
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