In an effort to reduce education costs long-term in Vermont, Gov. Phil Scott’s administration unveiled a proposal Tuesday that would result in increased property taxes for school districts with student-to-staff ratios below a state-mandated target.
Finance Commissioner Adam Greshin said the plan does not include a tax increase, because districts that beat the target would get a tax break, meaning the state wouldn't be taking in more money overall — even though some Vermonters would pay more.
“What the proposal does is, it levels the average statewide property tax,” Greshin told the House Education Committee Tuesday.
Greshin and Brad James, the education finance manager for the Agency of Education, presented the proposal, which would not take effect until fiscal year 2020. James, who came up with the plan, predicted it would result in 930 school job cuts across Vermont’s public education system and $45 million in annual savings over the next five years.
Greshin acknowledged that the administration hadn't “fully vetted” the proposal, and James indicated it was developed in a rush.
“This takes time,” he said of the policymaking process. “Time was not quite readily available for this.”
The plan would set a statewide student-staff ratio target of 5.5-1. Districts that don't meet the target would be charged a graduated penalty on property taxes. For example, a district with a 4.5-1 ratio would be charged a 2 percent penalty. A district with a 5-1 ratio would be assessed a 1 percent penalty.
Scott has said since his election in 2016 that education cost containment is a priority for his administration. This proposal comes less than a month after education secretary Rebecca Holcombe resigned suddenly for, according to the governor, “personal reasons.” People close to her attribute her departure to policy disagreements with Scott.
Rep. Dave Sharpe (D-Bristol), the chair of the House committee, confirmed that the proposal would result in increased taxes for some.
“The effect of that would be to raise tax rates in communities that have low student-to-staff ratios,” Sharpe said to the committee, as it met with the administration about the proposal.
“Correct,” James said.
Rep. Dylan Giambatista (D-Essex Junction) asked Greshin if Scott, who has taken a hardline stance against any new taxes or fees, would actually support what his administration is proposing. Greshin said the increase on Vermonters’ property tax bills would not, in fact, constitute a tax increase.
“So we would figure out a way to not make it a tax, because it’s not a tax. It’s a penalty,” Greshin said.
Lawmakers were skeptical of the plan, noting that just a few weeks remain in the legislative session. Sharpe pointed out that the proposal, like Scott's efforts to save on teacher health care costs, wouldn't do anything to address funding shortfalls for education in the coming year.
“None of [those proposals] will save money next year," Sharpe said, "and yet I still hear that we have to come up with $30 or $40 million before we get done here this year. So these don’t help. How am I going to come up with $30 to $40 million between now and the end of the session?”