Town Meeting Results/School Budget Defeats

Date: March 19, 2014

The March 4th Vermont Town Meeting day saw an unusual number of local school budgets voted down across Vermont.  In all, 35 budgets were defeated by voters; the largest number in a decade.  Many observers believe that Vermonters are finally beginning to show their frustration with almost yearly increases in property taxes.  The topic of how Vermont’s education financing system established under Acts 60 and 68 is affecting Vermont property taxes has sent a loud wake-up call to many Lawmakers in Montpelier.  "There's concern all over about the current education funding system and its effect and impact on property taxes," stated Heidi Scheuermann, R-Stowe. "I think the message is clear. That it's time for us to take some action."


On March 12, only a week after Town Meeting Day, a bill was introduced before the House Ways and Means Committee aimed at reining in the state-wide property tax rate.  The rate is currently scheduled to increase 7 cents next year – the highest single jump in the history of the modern education funding system. The bill introduced before Ways and Means would cut 2 cents from the tax rate. House Speaker Shap Smith stated:  “Vermonters are concerned about their pocketbooks, and the increased tax rate really puts pressure on their pocketbooks and we’d like to see if we can reduce that pressure.”  However, it is unclear whether there is enough time and will for the Legislature to tackle Vermont’s education funding system this year.


The proposed House bill aims to slow the growth in school budget spending by making several key adjustments.  First, there would be changes made to the excess spending penalty that would require tougher punishment on school districts whose per-pupil spending increases faster than the rate of inflation.  “We spend plenty of money per pupil in our schools system for our K-through-12 education," said David Sharpe, ranking Democrat on the House Committee on Ways and Means. "And what we’re trying to do here in the Statehouse is put downward pressure on that by requiring schools who exceed spending over the inflation index to pay a little bit more in taxes.”


Second, there would be changes made to the income sensitivity program that currently reduces the property tax bill of about 60% of Vermonters.  The proposed changes would increase the property tax bills of Vermonters who make between $47,000 and $100,000 per year.  This change would mean that far fewer Vermonters would be insulated from the effects of rising property taxes.   Thirdly, the House bill also would eliminate small school grants, as well as a clause that now insulates many schools against the negative financial impacts of dropping enrollment.  These changes are believed to be aimed at the larger debate of encouraging the consolidation of school districts that is clearly too large a topic to include with changes this year.   Consolidation is another method that is widely suggested as a way to control the high costs of Vermont’s education funding system. 

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