Study: Less disparity in education spending across Vermont communities

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(Host) According to a new study, Vermont’s education funding system has done a good job in reducing disparities in spending between property wealthy and property poor towns over the last 10 years.

The report also finds that towns that rely heavily on state education funds aren’t spending an excessive amount of money on their local school budgets.

VPR’s Bob Kinzel reports.

(Kinzel) Act 68 imposes a statewide tax on all residential and non-residential property in Vermont. The residential rate fluctuates based on how much a town spends on education while the non-residential rate is fixed.

The law also contains a policy known as income sensitivity. This allows homeowners with incomes under 80 thousand dollars to pay their education tax based on their income rather than the value of their property. It applies to a house and 2 acres of land.

The Public Assets Institute, a non-partisan policy group, has studied education spending levels throughout the state over the past decade.

Institute researcher Jack Hoffman says the results show that the law has met its initial goals:

(Hoffman) "The disparity between property rich and property poor towns has closed. The fear 10 years ago was that these poor towns would start outspending the rich towns just because they were going to benefit a lot from Act 60. So they certainly have brought up their spending but they’re still spending below other communities."

(Kinzel) Hoffman says the report also shows that how much a town spends on education is directly linked to the per capita income level of the community.

Critics of Act 68 aren’t satisfied. Londonderry Rep. Rick Hube says that property owners who aren’t eligible for income sensitivity are getting clobbered under the current system:

(Hube) "That’s all the businesses, all the in-home businesses, all the non-contiguous property, all the land that’s more than 2 acres. That’s all outside of income sensitivity … we have a problem and we can’t continue to put our heads in the sand."

(Kinzel) Hube also argues that equal tax rates can lead to very unequal tax burdens because the value of similar types of property can vary dramatically from town to town. He says this situation has led to difficult spending decisions.

(Hube)"Is it equitable that my school in Jamaica, you know the little school there – K through 8- didn’t even have potable water and their library was in the hallway. I don’t think that’s equitable when you have other towns that are buying football uniforms."

(Kinzel) But Institute founder Paul Cillo says the same tax burden discrepancy occurs within a town when two similar houses are located in different places:

(Cillo)"One down in the flood plain and one up on the hill the same house the one on the hill twice the value as the one in the flood plain, same tax rate, so if that’s unfair in some way then the whole property tax system is unfair."

(Kinzel) While it appears unlikely that the Legislature will make major changes to the current law, the House Ways and Means committee plans to hold a public hearing after Town Meeting Day on a new plan that eliminates the statewide residential property tax and replaces it with a local income tax.

For VPR News I’m Bob Kinzel in Montpelier.

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