Adam Greshin and Mac Rood, the two candidates running for state representative from Warren, Waitsfield and Fayston, were queried this week on their views about how education is funded in Vermont and whether school consolidation makes sense for The Valley and the state.

The candidates are incumbent Adam Greshin, I-Warren, and challenger Mac Rood, D-Warren. Candidates were asked to answer a question about how the state creates the Common Level of Appraisal by which individual state property tax rates are calculated for each town. Background on a legal case regarding CLA calculation is provided below, followed by the questions for each candidate and their answers.

BACKGROUND

In 2002, a superior court judge found that the state's efforts at fairly assessing the CLA and determining statewide property tax rates fell far short of meeting the constitutional test of proportional contribution. In a case brought by the town of Killington, the judge referred to the state's methodology as being "about as rational as rolling dice" and concluded that it "resulted in disproportionate and inequitable taxation among Vermont's municipalities in violation of the constitutional requirement of proportional contribution."

The state Supreme Court overturned this decision and supported the state's practice, stating in part that the trial court had "made no findings, and indeed took virtually no account of the state's evidence relating to the reasonableness of its equalization methodology in light of the resources available," and that the judge "ignored the testimony of state officials that appraisals were beyond the limited means available to the Division of Property Valuation and Review." (Emphasis added.) (Town of Killington vs. Department of Taxes, Docket No. 2002-433) Nothing has changed in the interim. What other constitutional protection is conditioned on how much money the state wants to spend on it?

QUESTION 1
 
How would you provide the Vermont Division of Property Valuation and Review with the resources to do a better job, or find a fairer source of revenue (or better method) than the statewide property tax and Act 60/68 for education funding?
 

Mac Rood: Act 60/68 has not been good for The Valley. We can acknowledge that all Vermont children should have equal access to a quality education, but the tax system devised to achieve that goal has made The Valley less affordable for middle income working people and those on fixed incomes. We are losing the diversity of population that makes our towns attractive.

The connection between school spending levels and tax rates is not readily apparent to taxpayers. It is possible for school spending to decrease and tax rates to increase at the same time. The state applies various formulas to each town's education spending which adjust our tax rate to satisfy various state goals. The CLA, if calculated correctly, adjusts our appraisals so that between town-wide reappraisals our property values are calculated consistently from town to town. If we continue to fund education through a state tax system, a correctly calculated CLA is essential. More disturbing than the CLA are the formulas used to adjust each town's tax rate based on the state's notion of how much a town should spend. The tax rate levied on homestead property is adjusted upward if the residents of that school district spend more than the "base education spending" amount. The school tax system is gradually being taken over by the state while responsibility is being left unfairly with our local school boards.

Under the current state tax system, our fundamental problem is that we live in an area with high property values. Acquiring a home is difficult enough, but the annual property tax burden can be impossible to afford.  Property tax is fundamentally regressive. It does not take into account the ability to pay. The income sensitivity provision of the current tax system is meant to address this issue of fairness, but it is not straightforward or easily understandable. Some taxpayers are not even aware that they are due a property tax adjustment. I believe that an income tax should be substituted for the property tax on homesteads (primary residences). Eliminating the property tax on homesteads and basing the education tax exclusively on ability to pay would be fairer.

On the question of resources for the Vermont Division of Property Valuation and Review, I firmly believe that when the state mandates a program, it should be funded adequately, presumably from within the funds of the program itself. I can't presume to question the legal arguments made before the Supreme Court or know whether at this point there is an opportunity to re-challenge the outcome if more resources were provided for the program. Needless to say, many millions of dollars are at stake every year with the determination of the CLA. The VT Division of Property Valuation and Review should get it right. To the extent that the Supreme Court used a lack of resources at the state level to excuse inaccurate appraisals, that is wrong.

Adam Greshin: The statewide property tax suffers from several problems, but one of them is not the method of property valuation. One problem is the magnitude of the tax that results from the valuation. We spend lots of money on our schools and our property tax rate is set to raise that money. The more we spend, the more we pay. A second problem is the extraordinary complexity of the tax rate calculation. The local tax rate is a factor of local spending and statewide spending, all boiled down to a per pupil spending number. (Don't even think about how we calculate pupils.) 

In the old days, if local schools cut spending 5 percent, education taxes declined by a like amount. Post Acts 60 and 68, if spending is cut, taxes will probably decline but only if most other towns follow suit, and the decrease in the property tax bill almost certainly will not match the decrease in spending. The statewide property tax loosens the ties between local school spending and the tax consequences of that spending.

Perhaps the biggest problem of all with our education funding formula is that there's no evidence it works - if outcomes are what count. Lousy schools prior to Act 60 are still lousy schools post Act 68. We've thrown money at the problem, but gaps in educational quality between towns still remain.

I believe strongly that towns with property wealth should help subsidize towns without property wealth. But it's time we restored a greater measure of local control to school spending decisions. I would return to the notion that the state should guarantee a base level of per pupil funding to every town. The level per town could and should vary with demographics and special needs, but the average level would reflect state and national trends.

Town school boards could spend more than the base level, but they would have to face the voters and raise it locally. To raise the money for education, there's no alternative to the statewide property tax for vacation homes and businesses, but for homesteaders, I would investigate an income tax as a replacement for property tax. Income tax has its challenges - household income calculations aren't much better than property assessments in determining capacity to pay - but most people already pay property tax based on income. It's worth investigating whether the rest should too.

QUESTION 2

Explain how school/school district consolidation could work or would not work locally and in Vermont?

Adam Greshin: The state has adopted a carrot and stick approach to school consolidation. The stick approach was adopted, wittingly or unwittingly, with the enactment of Act 60 and the resulting increase in property taxes. Particularly in small communities, the local school became more and more costly to maintain. Act 68 added to the financial pressure by further penalizing high spending schools. The phase out of small school grants, which will probably occur next year or the year after, will almost certainly accelerate the trend towards consolidation.

The carrot approach was launched last session with the passage of Act 153 - legislation which I didn't support for reasons that have little to do with consolidation. The legislation set in motion a "voluntary merger plan" for schools and school districts and provided tax subsidies (out of the Education Fund) to sweeten the pot. I wasn't wild about the subsidies but even less enlightened were orders to bolster supervisory union duties and responsibilities and reduce local control of schools. This is precisely backwards.

Any credible study of school consolidation has to begin with administration. We don't need, nor can we afford, 65 supervisory unions. Appoint a commission, come up with the right number and then launch a discussion on the roles and responsibilities of the supervisory union. Curriculum development and business functions may be best left to the superintendent, but execution of the curriculum and deployment of teaching resources - the bread and butter of education - should be left to school principals. Measurement tools exist, or new ones can be developed, to determine the success of each school and which schools need additional assistance.

Administrative consolidation has to be done at the state level, but local school consolidation should be left to the towns to decide. It's already happening, primarily driven by the cost of education, but the decline in the school population is an additional factor. Tying school spending decisions more directly to the local tax rate and phasing out the subsidization of small schools will accelerate the pace. In all cases, the state and the supervisory unions should provide technical assistance and, when necessary, statutory changes without compromising the authority of voters to make appropriate choices for their communities.

Mac Rood: The quality of our schools is closely related to local involvement and local control. I fear that if school districts get too large or too far away, parents and voters will lose a sense of connection to the schools and the quality of education will suffer. It is important that school districts be small enough to foster a sense of community.

Schools are under enormous pressure to reduce expenditures in order to reduce the property tax burden on Vermonters. One remedy being promoted is school consolidation. Any move in that direction should be controlled by the towns and be at the discretion of town voters. Recent studies in The Valley have not revealed significant benefits to be achieved from consolidation. Savings are offset by increased expenditures such as more busing. But circumstances change. We should study consolidation again if and when we think there may be educational and budgetary advantages to be had.

It is important to identify the actual effects sought with any consolidation. Buildings would not necessarily be eliminated. In the past our towns had multiple school buildings and locations under one school board. It would be possible for all existing buildings to remain in use under one administration. Perhaps there are economies to be achieved from closer cooperation with other school districts short of actual consolidation. Vocational education at the high school level is already an example of that.

We should not overlook the significant amount of parent and school board volunteer work that might be lost if school districts became too large, remote or impersonal. It would be a false savings to consolidate and then add staff to compensate for lost volunteers.

In the end we should be asking ourselves, what is the ideal size school? and how far are we willing to have elementary, middle school and high school students travel to get to school?

       

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