Lawmakers Are Looking Into Budget Issues Caused By Act 46's Spending Threshold

Nov 18, 2015

Lawmakers have been trying for years to come up with a way to curb education costs, and a spending threshold contained in a reform bill passed earlier this year seems to be doing the trick. But education officials say it’s working a little too well, and they’re warning that the legislation will force Draconian cuts if lawmakers don’t reverse course.

Jeff Francis, head of the Vermont Superintendents Association, says he understands that lawmakers are under incredible pressure from constituents to do something about rising property tax rates.

When it comes to intent behind the high-spending penalties contained in a school-governance reform bill passed in May, Francis says he gets it.

“We agree with you that we need cost-containment and that property taxes are a problem,” Francis says. “We agree with that.”

But Francis says school officials are discovering that the fiscal actions needed to avoid the new penalties will, in some districts, take a serious toll on educational opportunity. And he told lawmakers on Wednesday, that the pressure to lower costs is thwarting the longer-term goal of governance reform.

“The folks at the local level are working their tails off,” Francis says. “And to deal with what they construe to be an arbitrary cost-containment mechanism that plays out differently from community to community is a distraction.”

"The folks at the local level are working their tails off. And to deal with what they construe to be an arbitrary cost-containment mechanism that plays out differently from community to community is a distraction." - Jeff Francis, head of the Vermont Superintendents Association

Education officials across the board are sounding the alarm over the spending threshold, which penalizes districts that exceed the allowable growth rates contained in the provision. The spending penalties are part of a broader reform bill, called Act 46 that requires school districts to consolidate into larger governance entities over the next few years.

Nicole Mace, head of the Vermont School Boards Association, says the consolidation mandate is a welcome step that will allow for economies of scale in districts where options are now limited. But she says imposing punitive spending thresholds before consolidation takes effect could end up hurting students.

“The better public policy approach would give those districts the time to complete that work, so they can address staffing levels and other cost centers in a more responsible way,” Mace says.

Bristol Rep. David Sharpe, the Democratic chairman of the House Committee on Education, says he thinks the spending threshold needs to be tweaked, especially in light of an unexpected 8 percent spike in health insurance costs.

But Sharpe says the total repeal of the provision, as the Vermont-NEA and School Boards Association are calling for, is not going to happen.

“I am not willing to abandon the allowable growth percentage that’s in the bill. It is important to keep the pressure on. However, I am willing to consider tweaks or changes that take a little of the pressure off,” Sharpe says.

"I am not willing to abandon the allowable growth percentage that's in the bill. It is important to keep the pressure on. However, I am willing to consider tweaks or changes that take a little of the pressure off." - Bristol Rep. David Sharpe, Democratic chairman of the House Committee on Education

Sharpe says possible revisions include excluding health care costs from the threshold formula, or targeting penalties on districts with the lowest staff-to-student ratios.

The education committee will meet again this fall, and Sharpe says he hopes to have a proposal ready for lawmakers to consider early in the next session.