Impasse Over State Budget Could Endanger Funding For Vermont State Colleges

Feb 6, 2017

An effort to boost public support for one of the most poorly-funded state college systems in the nation could go by the wayside if Democratic lawmakers and Republican Gov. Phil Scott can’t find a budget compromise.

When it comes to money, higher-education officials are accustomed to drawing the short straw in Montpelier.

“[An] area where Vermont consistently ranks as one of the lowest in the nation is in our support for state colleges and universities,” Scott said during his budget address last month, pointing out the consequences of stagnant higher-education funding.

Scott followed up that sobering line with a plan to address it.

“My budget proposes a base increase of $4 million to Vermont State Colleges,” Scott said.

It was one of the longest and loudest applause lines of Scott’s budget speech. And no one was clapping harder than Jeb Spaulding, the chancellor of the Vermont state college system.

“The governor’s proposal to add $4 million and then have it inflate modestly every year would put the Vermont State colleges on a solid financial footing,” Spaulding said in an interview at his Montpelier office last week.

Over the past decade, the amount of state taxes going to the K-through-12 education system in Vermont has gone up by about $600 million. During the same time period, the amount of state tax revenue going to higher education has increased up by only about $3 million.

The lack of fiscal attention from Montpelier has taken its toll.

Gov. Phil Scott, seen here delivering his budget address, says it's time to redistribute taxpayer money away from the K-through-12 school system and into higher education.
Credit Stefan Hard / Times Argus file

“We’ve made significant cuts to our benefit programs for employees, our investments in educational supplies and maintenance,” Spaulding says. “And it’s time that we realize Vermonters deserve access to a high-quality, affordable education.”

The $4 million increase represents a 16-percent jump in state funding. Scott’s proposal guarantees even more money down the road by tying future appropriations to the rate of inflation.

But there’s a massive hitch to Scott’s plan: It would require lawmakers to impose a spending freeze on K-through-12 school budgets this year. And so far at least, legislators are not on board.

Lawmakers say it would exacerbate financial inequities between districts, and force draconian cuts — or even closures — at local schools.

They also say it undermines the principle of local control that now guides the education system in Vermont.

"If the governor is going to tell school districts what they can spend, and he's going to inject himself into the bargaining process about what teachers get paid, it seems like he just wants to run the school system from Montpelier,” says Bristol Rep. David Sharpe, the Democratic chairman of the House Committee on Education.

"Eventually we will erode the quality that Vermonters get at their public system of higher education." — Jeb Spaulding, chancellor of Vermont state colleges

Spaulding says he acknowledges the political gauntlet Scott’s plan will have to get through.

“So what my hope would be is that people wouldn’t just say, ‘No,’ out of a visceral reaction, but study it carefully – there’s not a lot of time – and be willing to compromise,” Spaulding says.

The terms of that compromise, however, have been made more difficult by Phil Scott’s preemptive refusal to pass a budget plan that raises new taxes or fees.

That means if lawmakers don’t approve the public-education spending freeze, or find some other way to enforce spending cuts at local schools, they’re going to have to find the money somewhere else in the state budget, assuming Scott stands by his no-new-taxes pledge.

And with a $70 million shortfall in the general fund, even without the new money for state colleges, that’s going to be a heavy, if not impossible lift.

Scott didn’t pluck the $4 million figure out of the air.

“We asked for $4 million,” Spaulding says.

In the past three years, state colleges have eliminated 100 positions. And this year’s payroll expenses are $3.6 million less than they were before the retrenchment began.

“Despite all those things, it looked like at the system level we might operate at a $4 million loss in FY18. And we really wanted to make the case to the governor and the Legislature that we can’t continue to do that forever,” Spaulding says.

Spaulding says he doesn’t necessarily have an opinion on how elected officeholders should find the money. But he says if they don’t, it’s Vermont’s state college students who will pay the price. That cost will come first in the form of increases in in-state tuition rates that are already among the highest in the nation.

“And eventually we will erode the quality that Vermonters get at their public system of higher education,” Spaulding says.

Scott is well aware of lawmakers’ strident opposition to his proposal. But he says if lawmakers agree that there are savings to be plucked from the $1.6 billion K-through-12 system, then there’s still hope.

“As long as they agree with my vision, and we can do this without raising taxes and fees, I think that’s half the battle, is agreeing to the vision,” Scott says.

That other half of the battle, however, will no doubt be a brutal one. And if legislators aren’t ready to impose new spending restrictions on school budgets that will be voted on in less than a month, then state colleges might face as tough a fight for money this year as they have over the past decade.