State To Spend $31 Million On Act 46 Incentives

Dec 5, 2017

A new Joint Fiscal Office study found that the state will spend almost $31 million for school districts that merged under Act 46.

Vermont's school district consolidation law was set up in phases, and districts that were able to get their merger plans approved before the established deadlines received financial incentives.

Agency of Education finance manager Brad James says a lot more districts took advantage of the tax breaks and grants than the state had anticipated.

"I don't think we really knew how much money was going to be used as tax incentives, and how much tax money would be lost from the (education) fund," James said. "I think we're all kind of  surprised how many districts have merged."

Nov. 30 was the final deadline whereby districts would receive the incentives, and about 75 percent of the districts in the state were able to get their plans approved by voters.

According to the JFO analysis the state will spend an estimated $25 million through fiscal year 2019 on the homestead tax incentives.

The state also handed out grants to help school board members with legal and consulting fee while they were writing their merger plans, and JFO found that almost $6 million was used to help school districts during the planning.

James says when Act 46 was being debated in the Statehouse there was very little buy-in from the public, and also some resistance that has carried over in some of the districts that have not merged.

He says the incentives were a way to convince districts to put their plans together.

A sign in front of Putney Central School encourages families to get involved with the Act 46 process. Putney and Dummerston both rejected a proposed merger plan on Nov. 7.
Credit Howard Weiss-Tisman / VPR

"I'm not sure we ever had any idea what the magnitude would be. We were pretty hard pressed when this law was written to say who would really do this," says James. "It's a significant amount of money, though it's important to remember that everyone pays for this because  we have a statewide funding system, and the districts that are getting these incentives are paying too."

Supporters of Act 46 say the education law will lead to more equity among the children in the larger districts, and they also expect some savings will occur as school work together and share resources.

But James says the Agency of Education has not estimated how much savings might occur as more districts move ahead with their merger plans.

"I don't think we really knew how much money was going to be used as tax incentives, and how much tax money would be lost from the (education) fund. I think we're all kind of surprised how many districts have merged." - Brad James, Agency of Education

Jody Normandeau lives in Dummerston and she has been opposed to Act 46 from the start.
Normandeau reached out to lawmakers to request the Joint Fiscal Office analysis and she says the almost $31 million is money that could otherwise be spent on educating Vermont's students.

"I was concerned because the state's blaming all the schools for the cost of education when the state is spending all this money out of the education fund," Normandeau said. "I want the state to take responsibility for what they are spending, not just the schools. I want someone to own up to what this is costing."
 

Dummerston voted down a proposed merger plan and Normandeau is now working on a committee that wants to write an alternative governance structure that would allow the town to retain its own school board.