And They’re Off!

The last legislative session finished at a frenetic pace.  We introduced 679 bills and passed 97, many of them good.  The Governor signed 84 of those into law and vetoed 5 particularly bad ones.  None of those vetoes were challenged (a victory for Vermonters!). You can see the list of bills passed and vetoed HERE. 

Now the race to the finish line has begun. The number of really good bills already “on the walls” from last year and the new bills being drafted and introduced this 2nd year of the biennium gives me hope that this could be a good year.  There are bills that solve or at least address many of the problems facing Vermonters that you all sent us here to solve, such as: ever increasing property taxes, unaffordable housing, healthcare and insurance costs, high energy costs, crumbling roads and bridges, and public safety concerns.  I’ll address proposed solutions for one of these topics here and save the others for future communications.

Governor Scott made very clear in his State of the State address on January 7, that education reform and property tax control was his number one issue.  In fact, it is so important that he spent his entire address discussing it. You can listen to it HERE.

Education reform isn’t optional. It’s essential. Education spending has risen from $1.6 billion to $2.5 billion in just over a decade, driving double-digit property tax increases. This is causing hundreds of millions of dollars to be diverted from housing, childcare, infrastructure, and public safety just to keep the current educational system afloat.

Property taxes are driven by education costs.  The only check on education costs in the current system is the budget vote during town meeting week.  Those budgets get lumped together at the state level to calculate a state-wide property tax “yield” which determines your property tax rates.  All this is done INDEPENDENT of the number of students in each school district.  School budgets have grown ~7% per year while student count has dropped about 1% per year for the past 35 yrs.  Property taxes go up by nearly double the percentage increase in school budgets because the other funds that pay for 40% of Education in VT tend to remain stable so property tax has to cover the entire increase.  Without legislative intervention using general funds to buy down the tax rate, we expect another 12% average property tax increase this year.

This problem can be resolved by staying on the path we blazed with Act 73 that was passed last year and augmenting it with a couple bills being introduced this session.  The core of Act 73 is a completely different way of constructing school budgets called a Foundation Formula.  While new to Vermont, every other state except Vermont and one other, implements some form of this.  A Foundation Formula first defines a base student tuition rate. Then each school district budget is simply determined by multiplying the number of students in that district times the tuition rate.  There are weights applied to certain categories of disadvantaged students that might need more help and thus cost more, but that’s it.  Whatever that number computes to is the budget for the school district and the schools operate within that budget.  Once Act 73 goes into effect in 2028, there will be no more school budget votes.

The beauty of a Foundation Formula is that it ties school budgets to the number of students in the schools.  As the number of students decreases, as we are seeing in Vermont, so does the budget and thus so does the property tax.  The tuition rate growth is limited to the published NIPA inflation rate which runs about 2.5%.  Reduce this by an average 1% drop in students each year, which is projected to continue for the next 15 yrs, and we control budget growth to an average of 1.5% per year.  That’s manageable!

A Foundation Formula also guarantees that we meet a key stipulation in Vermont Statute that requires every child in Vermont have “substantially equal educational opportunities”.  This has been upheld by the Vermont Supreme Court to be achieved with substantially equal funding.  Under the current system of school budgeting, huge gaps have developed between towns with some districts spending approximately double what other towns are spending on their students.  This inconsistency with Vermont law is solved by the foundation formula.

An aspect of Act 73 that is widely misunderstood is redistricting.  Act 73 itself does not change any school districts nor close any schools.  It required that a task force identify up to three options for the Legislature to select from to reduce the current 119 school districts and 53 supervisory unions to something fewer that would significantly reduce the overall administrative overhead, and thus cost, associated with each distinct school district and supervisory union.  The legislature will decide what to do with the task force results this session. 

Note, fewer school districts does NOT mean fewer schools!  It just enlarges the boundaries to include more schools that a single set of administration covers within each district.  This gives superintendents more flexibility in resourcing and meeting the needs of all the students in the district.  As Governor Scott correctly pointed out in his address on Wednesday, schools were already closing in Vermont before Act 73 was passed.  The reality is the student population has shrunk by a 1/3 over the past 35 years and will continue given our state’s demographics.  The same number of schools simply can’t be supported by such few students.  This is independent of Act 73 and any redistricting that may occur.

In addition to Act 73, there are two new bills coming that will bridge the gap until Act 73 comes into effect on its planned 2028 date.

The first is a simple freeze on property taxes at their current FY2026 rates.  This ensures stability until the budget controls of Act 73 take effect. Read about it HERE.

The second is an alteration to Act 73 that enacts the Foundation Formula even if redistricting does not occur.  This keeps them from throwing out the baby with the bathwater.

There will likely be duplicates of these bills in both the House and the Senate.  I’ll get those numbers for you to track when they’re introduced.

The success of all this depends on what the leadership in the House and Senate decide to do.  That leadership is entirely controlled by a handful of people that are not in my party.  I am making as much influence as I can.  But we’re still a minority. Your help can and will make a difference!  Contact your representatives and senators and support those who make the right choices.  Elections matter.  Your vote counts.

I remain honored to be your Representative,

Rob North

www.NorthForVTHouse.com

Addison, Ferrisburgh, New Haven, Panton, Vergennes, and Waltham