As many communities consider sizeable increases to their school budgets on Town Meeting Day, questions are being raised about a program known as “income sensitivity.”
It’s a program that allows homeowners, with household incomes below roughly $97,000, to pay their school taxes based on a percentage of their income and not the value of their property. Approximately 60 percent of all households in Vermont participate in the program and it costs just over $150 million.
The Vermont Realtors Association released a report on Tuesday that calls on lawmakers to lower the income threshold for the program as a way to control spending and take pressure off of the statewide property tax.
Dick Heaps is a partner in Northern Economic Consulting, the company that conducted a study of the state’s education financing system for the Realtors. In his mind, there’s no question that people who are eligible for income sensitivity do vote for higher school budgets.
“And in effect from an economist’s standpoint what you’ve done is you’ve put education on sale and when you cut a price of something you spend more,” said Heaps. “And I think that’s what happens when we get to our towns, most of the voters in town are protected from the full impact of that increase in the budget, so they vote to increase the budget. It sounds like a good idea.”
Rep. Johanna Donovan, D-Burlington, is the chair of the House Education committee. She strongly disagrees with this analysis. Donovan points out that if a town raises their school tax by 10 percent, people in the income sensitivity program see their tax burden increase by the same percentage.
“When they vote 'yes' they’re very aware that the percentage of income they pay is going to rise,” said Donovan. “So I’m a little struck this has become part of our public discussion because there is no one who has a bit of evidence to support that statement.”
Donovan said one of the top priorities for her committee this session is a plan to create larger school districts. She’s not sure if the plan will save any money, but she thinks it will offer students more educational opportunities.
“If indeed it would be more cost-effective then that would be a wonderful thing that would happen,” Donovan said. “For us, our commitment is to really make Vermont be an education state, the place where Vermont kids get an excellent education and go on to succeed in this world.”
Gov. Peter Shumlin has said he’s willing to look at changes in the income sensitivity program if it can be clearly demonstrated that the program has an impact on the passage of local school budgets. But he said he has yet to see any clear evidence to support this change.