The Act 127 & 173 Follies
by Mike Stack
As the Vermont School 2025 Budget season grinds forward the depth of the dysfunction and the unintended consequences from recently passed Act 127 and implementation of Act 173 continue to snowball. As a follow up to my December 29th 2023 comments Michael Stack: The broken Vermont education system | Opinion | reformer.com, even I an admitted skeptic of centralized processes have been surprised by the lack of awareness and insight involved on the part of the representatives that brought this monster to life.
If it sounds like I am repeating myself, “A for headlines, and an F for implementation” I am. Honestly at this point it feels like the legislature is just making this stuff up as they go along. Obviously not the behavior that would build the confidence of taxpayers across the state who are ponying up close to $2B to cover education spending.
So, what do we know?
Education spending as predicted by the state’s December tax commissioner letter projected education spending up 12% (4 times the current rate of inflation) and Property taxes across the state to be up possibly 18%.
The basis for the 12% increase. First, moving the ESSER sugar high spending into local budgets, undoing multiple years of Infrastructure neglect, and a 16% yr/yr health insurance increase. Unfortunately, this double-digit projection is coming on the tail of a decade of state spending at a rate roughly 1.5 times inflation as student count and academic results decline. The natural question, “where did all that money go”? As a taxpayer I am all the more infuriated as we have dealt with PCBs and roofing failures at BFUHS and realize that the state basically hasn’t invested anything in our school buildings over the past 15 years.
So where are we now?
In Rockingham our coming August 24 -July 25 education-based property taxes are likely to be up mid teens. That is a crushing number for taxpayers who have seen their disposable income vaporized due to out-of-control government spending and the inflation that subsequently rained down upon us.
Variables that drive our tax rate including Student count, Student yield and CLA (Common Level of Appraisal) continue to be rejiggered in the political backside covering taking place in Montpelier, so unfortunately none one really knows. The uncertainty that was injected into the budgeting process by these acts resulted in many districts padding their numbers. As I have outlined before that fatal “beggar thy neighbor” flaw that is inherent in the centralized funding system was only exacerbated by the uncertainty injected by the legislature and the false promise of capping the homestead tax rate at 5% annually and smoothing the outsized spending over multiple years.
A recent Kornheiser and Cummings Chairs of Ways and Means and Finance letter stated “The education fund is a promise among neighbors that we will take care of each other’s needs and costs. If districts act solely in their own rational self-interest, those costs will be picked up by property taxes in neighboring
towns.” Unfortunately, these words come very late and after the fact. It is going to be very hard to put the budget genie back in the bottle with so many budgets near completion and headed for town vote.
Now comes the AOE Agency of Education centralized “review committees” across the state to evaluate if local budgets were developed in good faith. My interpretation, more cost, more bureaucracy, more distracted resources, and yes more cost for the taxpayer to carry.
For Rockingham voters I can assure you your boards at the BFUHS and in the Rockingham school system held the line and developed a reasonable “middle of the road” low to mid-single digit increase in our budgets. We worked closely with our Administration to minimize the impact on staff and our student’s education. We also avoided calls to take advantage of the Act127 5% cap loop hole created by Montpelier. We knew those costs would have to be covered by other more regressive forms of taxation (Sales, Meals and Rooms, etc.) the multiple pockets concept, in which all of the pockets turn out to be yours. We were not lured by the promise of “Free Money”.
Rockingham has been hurt and will continue to be hurt to the tune of hundreds of thousands of dollars annually by the implementation of Act 173. Our Finance manager has referred to that as the State “Defunding special Ed” a Federally mandated program. The Act 127 headline was “directing money toward students that need it”. I didn’t see the headline for implementation of Act 173, however if I was to write it, I think “WNESU Students Last” might be a catchy one. Where was our representation when that sausage was being made?
Michael Stack is a member of the Bellows Falls Union High School Board.