12-3-14 – Whoa! Hold Your Spending Horses There, Pardner!

Posted by Chris Campion

Governor-Elect Peter Shumlin, narrowly avoiding an election loss of historic proportions, recently told the school districts in Vermont, and therefore the taxpayers, that (put on your shocked face) property taxes will be going up.  Why?  Because school budgets and education spending overall are going up faster than the rate of tax revenue growth, and for a budget that is already en fuego, Vermont now has no choice.

To Shumlin’s credit, he actually states, out loud in Vermont, that there is a problem with school spending.  To wit: The number of students in Vermont’s K through 12 systems continues to decline, while staffing stays flat and costs rise.

How many businesses do you know of that would keep their doors open if their customer base dropped and their costs went up?

Shumlin says that equation poses a problem for the state because it means property tax rates and other streams that pay for schools are going up again.

The negative feedback loop continues.  Education spending goes up faster than the rate of inflation, year over year, to service a smaller and smaller number of students.  Who do worse and worse in terms of test scores.

“We are all willing to change assumptions and things that we’ve held sacred in the past in order to reduce costs and have better quality outcomes,” said Shumlin.

Again, at least Shumlin is stating what everyone except the teachers’ union seems to understand: the current system does not work as it stands today.  But don’t worry, the state teachers’ union president has all of Vermonters’ best interests in mind:

“We must take care not to destroy what we’ve, together with local communities, built over the decades,” said Martha Allen, Vermont Teachers’ Union president.

What are we hoping to preserve here?  A state education system with mediocre outcomes and some of the highest per-pupil spending rates in the country?

Allen says they’re eager to improve but warns cost cutting must not harm education.

Education hasn’t been improved by increased spending, it has gotten worse.  It is Vermonters being harmed, on both ends of the equation – the students getting a mediocre education funded at one of the highest costs per pupil in the country.  I hate to break thew news to Ms. Allen, but education has already been harmed.

“We know that nothing is more important to the future of Vermont than ensuring that our children have the one-on-one attention from professional educators so that they can become happy, healthy, productive citizens,” said Allen.

Well, that means the teacher to student ratio needs to be approximately…one to one?  It turns out that generations of students with less one-on-one attention did better on tests, in college, and future employment that the more recent graduates of the unharmed and held blameless education “system”.  Only in a world upside down can someone be presented with factual data, purport to represent an educational lobby, and blithely ignore the reality staring her in the face.

Allen emphasizes the benefits of “one-on-one attention from professional educators.”

I’m quite sure that Allen would not claim otherwise, else she wouldn’t be president of the teachers’ union.  What else would she say?  “Nah, we don’t need more teachers, that’s a waste of money”?

There’s still time for more pain, though, and here’s the real kicker:  Vermont’s income adjustment program, built to salvage the property tax funding vehicle, while holding low-income earners harmless, means, again, that the bulk of the revenues to pay for education are foisted on a diminishing and fractional percentage of the population: About two-thirds of Vermont homeowners qualify to pay property taxes based on their incomes rather than property value.

That means that one-third of Vermont homeowners are shouldering the property tax burden for the rest of Vermont, which is simply a convoluted way of transferring wealth from one demographic to another.  In this effort, which group – the one-third or the two-thirds – will carry more voting power?  Who would vote to perpetuate the wealth transfer, and who would vote to change it?

That’s why the state’s budget is imploding, finally.  As expected (and badly forecasted) tax revenues shrink, tax rates, in one form or another, must go up, inevitably on the one group that’s already carrying the majority of the tax weight for Vermont.  Roughly 12% of Vermont households provide 65% of net personal income taxes collected in Vermont.  Not only is the state putting the burden on incomes, they’re doing it based on property values, and it may now be the time where the consequences of this Rube Goldbergian delight known as education funding in Vermont are finally going to be felt, by all of us.  It’s what an implosion might look like, except we won’t be watching from outside the event horizon.  We’re all in the front row.

Oh, and don’t forget – Shumlin also wants to uncork another couple of billion in tax collections to pay for single-payer, in a state that generates about $2.7 billion in tax revenues annually.  It’s clear that Shumlin, like other politicians before him, has been planning all along to only address the toughest questions, the ones he cannot answer or lose votes, until after the election.  Shumlin gambled that none of this, his budget, his single-payer dreams, his aspirations for higher office, would be threatened if he could just get past November and still find himself in the governor’s chair.

 

 

{ 3 comments… read them below or add one }

Mary Daly December 6, 2014 at 3:41 pm

I say again, take the social service out of the schools, refer those problems to the state programs that we are already paying for and allow the educators do what they are supposed to do – teach. The legislature would do well to take a close look at education mandates and determine if they are really helpful or interfering with the ability of teachers and administrators to concentrate on teaching. Just maybe these mandates are only requiring reports that no one reads or cares about but allows them to keep their jobs. What is really needed is an efficiency expert who does not benefit from the system to make the decisions.

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Jim BUlmer December 6, 2014 at 3:48 pm

It ain’t rocket science. If the customer base declines and sales fall off, the company cuts costs by reducing output and pairing down employees. Why can’t this simple bit of economics apply to the rising cost of education in Vermont coupled by an annual decline in enrollment and questionable quality of education? Simple, the teachers’ union will not allow any reduction is spending. In fact, they want to throw more money at the problem. Wonder if they are aware of what happens when gasoline is thrown on a fire?

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Robert Lefebvre December 6, 2014 at 4:59 pm

Where has common sense gone? Both Jim and Mary are right.
Here’s what I think can be done; have the voters vote on the school agenda and cost
of our school system, including teachers contract that we pay for, instead of the of school boards which are often controlled by school related personals who may benefit from the situation. I know that many officials think that we the regular citizens don’t know enough about education to decide what’s right for our children, but the results speak very poorly for them. And when it comes to voting for schools issues maybe we should disqualify teachers who sometime seem to be the majority at the meetings and at elections, especially in small towns. And yes, I realize that more of us should participate, but again many come home tired and often with children to care for and going to a meeting which is often control by school administrators and teachers, who are there to protect their jobs, is very discouraging.

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