Last Friday, Vermont Tax Commissioner Mary Peterson received a letter from 168 'Campaign for Vermont' partners, asking her to rectify gross inequities in our education finance system.

Specifically, the grassroots organization urges Peterson to lobby for more balance - asking that all Vermonters pay a fair share. Currently there is a significant disconnect between what the majority of Vermonters approve on Town Meeting Day and what they actually have to pay. CFV explains:

"Over the past two fiscal years, the most recent Joint Fiscal Committee Education Fund Outlooks show that school districts have voted education budgets that increase education fund expenditures by 8.3 percent, or $112.2 million, despite a continued decline in the student population of nearly 2 percent.

"Non-education tax revenues (general fund, sales tax, etc.) covered about $25 million of these spending increases and a one-time unreserved balance covered another $20.6 million. However, the largest sources of revenue covering these spending increases are the three statewide education taxes recommended by Commissioner Peterson and set by the Legislature.

"Between 2012 and 2014, the effective increase in the Homestead Property Tax Rate has been 11 percent, from $1.27 to $1.41, and for the Non-Homestead Property Tax Rate 4.3 percent, from $1.36 to $1.44. In contrast, the effective increase in the Household Income Rate has been only 2.7 percent.

"The driving force behind this differential is the Legislature which has not raised the base Household Income rate over the two year period but has raised the base rates on both homestead and non-homestead properties. Please keep in mind that those paying based upon household income also receive income-sensitivity subsidies totaling over $140 million.

"With our current education funding system, the Legislature can't control the amounts local school districts decide to spend. However, the Legislature has absolute power as to how such increases get distributed over the three statewide education rates. Given that 70 percent of Vermont's households pay for education using the Household Income Rate, it's certain that the majority of those voting for school budgets are not sharing proportionally in the costs of increased school spending."

We join with CFV in asking Peterson to recommend that all three base tax rates be adjusted equally and in proportion to the rate of net spending increases voted by school districts (after adjustment for non-education tax revenues).

It's becoming an issue of survival as much as fairness. As long as average Vermonters are sheltered from the effect of reckless education spending decisions, they will persist with a mistaken impression that things are somehow OK. They aren't. And the legislature needs to balance these disparities before we're all crushed under the ever-rising costs of our always shrinking schools.


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