by Ben Kinsley, for Campaign for Vermont

The House is set to vote on the next phase of Vermont’s education reform effort today. The bill they are putting forward is a grab bag of policies that House members managed to agree on.

The bill repeats some of the same mistakes as Act 46 such as:

• Assuming bigger districts are inherently better, when the available research does not support that position.
• Mergers still achieve cost-savings when you factor in incentives, salary level-ups, transportation, and other factors. Research indicates they don’t.

What does the bill do? Here are a couple key points, but see our full review for more specifics:

• Creates cooperative educational service areas, or CESAs, and places every supervisory union into one of seven designated regional service areas.
• Mandates that all school districts participate in assigned study committees, with facilitators using statutory guidance to group generally contiguous districts and, where practical, aim for study groups serving at least 2,000 students.
• Delays the implementation of the (cost-saving) foundation formula from 2028 to 2030 unless specified conditions are met, including local merger votes, fiscal analysis, and additional legislative action.
• Adds a large new regional assessment district framework for municipal property reappraisal, valuation appeals, and standardized property tax administration, aligned in part with school district geography.

One of the most important policy questions behind the bill is the best pathway for Vermont to realistically achieve economies of scale. The structure of H.955 suggests an understanding that regional shared services are likely to offer a more practical route to efficiency than district consolidation alone.  A regional service model could improve access to specialized supports, business functions, possibly expanded academic and career technical offerings, and, yes, generate cost-savings.

The scale of the proposed CESA’s is double what we had recommended in our education reform proposal. That matters because at nearly 1,380 square miles, these service providers may be at such a geographic scale that inefficiencies start to emerge. Additionally, they might be so far removed from school district operations, or working with so many schools or districts, that they are not able to coordinate effectively. Still there are savings to be had; our estimate showed that there is ~$300 million in potential cost-savings from shared services, but at a more moderate scale of 15 CESAs statewide. It seems reasonable to start smaller and these CESAs could always be combined in future iterations. It is easier to do this than to unwind a larger pre-existing CESA if they prove to unwieldly.

Significantly, the bill also requires all districts to participate in studies of possible school district mergers, even though the practical benefits of consolidation may vary widely by region and may be harder to realize where staffing contract equalization, transportation, debt service, and community concerns are significant. Additionally, larger districts can also feel more distant from local communities, and Vermont’s recent experience with Act 46 shows that governance change can generate resistance when residents worry that decision-making is moving too far away from the schools that anchor their towns. This is not just a local control issue, the data suggests that larger districts in Vermont do not perform better on either a cost or quality basis. This calls into question the effectiveness of widespread district consolidation without specific goals (cost savings, improved curriculum offerings, better quality instruction and outcomes, etc.). Consolidation alone should not be the goal, but that’s the approach that this bill seems to take.

The delay of the foundation formula is likely the largest failing of this bill. Vermont education spending, on a per student basis, has grown at twice the rate of the national average since the current funding system was put in place. Implementing a proven system (a foundation formula has been implemented in ~40 states) is the most consequential thing we can do to arrest the rise in education spending. This bill delays that effort another two years.

There are also reasons to question about whether or not the consolidation process in the bill is as voluntary as advertised. Even though the bill only mandates study committees be formed, it forces districts into conversations with one another irrespective of operating models, grade levels, attendance patterns, and cultural differences. Current law does not allow for a particular district to opt-out of these discussions if they are non-viable and pursue more enticing options with neighboring districts. There is also some risk that smaller districts might be railroaded by larger districts during the process. Or, that one district may sink an entire regional proposal because they feel jilted.

In short, it’s likely better for districts to initiate these conversations themselves instead of having their dance partners chosen for them. For these reasons, the bill does not live up to its promise to generate immediate relief for taxpayers.