A spending control mechanism added to the education reform bill at the 11th hour is not sitting well with Burlington school officials, who say it could cause staff cuts.
Burlington’s interim superintendent, Howard Smith, reached out to lawmakers as the bill was headed for consideration on the floor Friday to express concern over how the city’s schools might be affected.
The two-year spending growth restriction added to H.361 allows districts to increase their spending between zero and 5.53 percent, depending where they fall in relationship to the highest spending district’s per-pupil equalized spending.
School districts in Vermont spend between $19,299, Weybridge’s per-pupil rate, to a low of $7,002 in Andover. Burlington’s rate per equalized pupil is just over $13,000.
The plan is estimated to save about $12 million if statewide spending comes in at the hoped for 2 percent instead of a 3 percent statewide increase. This year’s overall growth was 2.95 percent statewide.
If a district exceeds its allowable growth limit on per-pupil spending, the amount over the limit will be added to its education costs and will affect the town’s homestead tax rate.
“I raised the concern with our legislative delegation that a larger district like Burlington with our demographically related spending pressures, could be impacted in a manner that is disproportionately harsh under the per-pupil spending cap provision of H.361,” Smith said in an interview.
“I stressed that in considering what is in effect a sliding penalty scale, it is extremely important that it includes a means of mitigation based on a district’s demographics,” he said.
Smith said the formula used for setting the equalized per-pupil count does not take into consideration large districts.
“In a larger district like ours, every one-tenth of 1 percent of growth we might need but would be disallowed deprives us of about $60,000, which translates to a teacher salary,” he said.
Smith said the fact that the formula would sunset after FY 2018 makes the blow less far-reaching, but he remains concerned.
Lawmakers who pushed for a spending control piece in the bill wanted to be sure that all districts felt the pain to cause them to budget frugally; some earlier mechanisms would have more harshly impacted small schools.
Larger school districts are where the largest dollars are, and lawmakers wanted to be sure that a spending brake would bring budget increases down for education across Vermont in arriving at the chosen formula.
During the two-year period in which the variable education spending growth limit in the bill is in effect, the current excess spending penalty will be suspended.
For Burlington, the formula for next year will allow them to grow their per-pupil spending by 2.18 percent, Smith said.
That restriction, Smith said, “…without any relief from the factors that drive our spending increases, will probably require more staff reductions at a time when we are projected to register 50 more students in kindergarten than we are graduating as seniors. And much of our growth represents students with significant needs for support of all kinds, not just limited to English language instruction.”
The chart which shows how the growth formula would work for FY 2017 can be seen here.
Rep. Oliver Olsen, I-Londonderry, testifies before the House Education Committee. Photo by Amy Ash Nixon/VTDigger
The formula was devised by Rep. Oliver Olsen, I-Londonderry, and was agreed to in conference committee shortly before the bill was voted out Thursday after months of work.
“The cost control mechanism built into H.361 is designed to moderate the growth of statewide education spending,” Olsen said in an email Monday. “The formula sets a growth ceiling that each school district can increase its spending on an equalized per-pupil basis. Districts can choose to increase spending above the threshold, but will pay more to do so.”
To address Smith’s concern, Olsen explained the formula that sets the equalized pupil rate.
“The definition of ‘equalized pupil’ is set in statute and includes a weighting that factors in demographic considerations that can influence the cost of educating certain types of students,” Olsen said. “Since the entire education funding formula, including this most recent cost control mechanism, is based on the cost per equalized pupil, demographic weighting of the student count has the effect of reducing per-pupil costs for the purposes of calculating tax rates. Likewise, districts that hold the line on spending, but experience growth [in] actual student numbers will see their per-pupil costs (and tax rates) go down.”
The House-passed underlying bill had called for a variable 2 percent spending cap but that was later deemed unconstitutional; the Senate version did not contain a cost-containment mechanism.
Allen Gilbert, executive director of the American Civil Liberties Union of Vermont, thinks the formula applied in H.361 may have constitutional issues, too, based on the ruling from the landmark Vermont Supreme Court case Brigham v. Vermont.
“There’s no doubt that the spending caps in H.361 slice into the Brigham principle of towns’ equal access to school funds. The slice comes through the penalties levied on towns once they spend beyond an ‘allowable growth rate,’” Gilbert said Monday.
“The penalties mean that a low-spending town can only catch up to higher-spending towns by paying a heavy financial penalty – while the other towns continue to spend high with no penalty. That’s not equity of access to school funds,” he said. “We’ll be watching very closely how the law is implemented and how the caps play out.”
The legislation passed last week seeks to create larger school systems to achieve economies of scale and improve educational opportunities for students.
Vermont has been losing students — the schools are down more than 24,000 since 1997 — but staffing levels have been relatively constant. Education spending and taxes have continued to rise, leading to the education governance reform bill this year.
Paul Cillo, executive director of the Public Assets Institute, said the spending control provision adds to an already too-complex education funding system.
“A better cost-control bill would have cleared away, rather than added to, the clutter in a system that is confusing to school district voters,” Cillo said Monday.
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