Gov. Shumlin Calls For Legislative Action On Act 46 Spending Caps

Dec 1, 2015

Gov. Peter Shumlin says lawmakers have a responsibility to make changes to the state's new school budget spending caps in the first weeks of the 2016 session.

Shumlin says he's developing a plan for the Legislature to respond to, but he's keeping it secret for now.

One of the key cost containment measures of Act 46, the state's new school district consolidation law, is the imposition of spending caps for the next two years. Towns that exceed the caps will be subjected to major financial penalties.

Many school boards say the caps are unfair because they're facing increased personnel expenses and higher health care costs. They argue they'll have to make cuts to important programs to offset these increases.

The caps impose a variable spending threshold. While high spending towns will be limited to roughly a 1 percent increase, lower spending towns would face between a 2 and 5 percent cap.

Legislative leaders are considering ways to modify the caps but they say it is very unlikely that any final action can be taken before voters consider their local school budgets on Town Meeting Day, March 1. This means that the budgets that are adopted might have to be reconsidered to reflect any action taken by the Legislature.

Shumlin says this is an untenable situation for local school boards and he has a plan to fix it. But when asked to discuss the outline of his proposal, Shumlin declined, saying it "wasn't ready for prime time."

"I think we have a responsibility to make sure that school boards have predictability when they submit their budgets to voters," Shumlin explained. "I'm going to make that happen."

One of the options that the administration could propose is to delay the implementation of the caps for a year. Brad James is the Financial Manager at the Agency of Education. Recently, he discussed this option with lawmakers.

"If it was delayed a year, ... people would have more time to get to it in a more thoughtful manner." - Brad James, Financial Manager at the Agency of Education.

"You certainly have everybody's attention at this point," James said. "If it was delayed a year, it obviously will not have an impact this first year, but the second year people would have more time to get to it in a more thoughtful manner."

Nicole Mace is the executive director of the Vermont School Boards Association. Her group has voted to repeal the spending caps but she supports the delay.

"Certainly a delay allows the General Assembly to re-evaluate what it's hoping to accomplish in light of the goals of Act 46," Mace explained. "So we would welcome a delay if the repeal is not looking likely."

"We've got to give [spending caps] a chance to work." - House Minority Leader, Don Turner

House Minority leader Don Turner has a different perspective. He says the caps were put in place to give relief to property taxpayers and he doesn't want them changed.

"We've got to give them a chance to work," Turner said. "I mean, we know that there's some pressure from the school boards, from the Education community that they don't like it. But we've got to come to some balance, so I'm not going to support any modifying of those caps."

The House Education committee might return to Montpelier later this month to take further testimony on this issue.