Tax Commissioner calls for repeal of Act 68

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(Host) Tax Commissioner Tom Pelham says the state’s current system of funding education, known as Act 68, should be repealed because it doesn’t do enough to control costs.

But backers of the law say it’s doing a good job in providing equal educational funding opportunities throughout the state.

VPRs Bob Kinzel reports:

(Kinzel) Governor Jim Douglas wants to repeal Act 68 because he says the law had led to an unsustainable growth in school spending in Vermont over the past decade.

Douglas says spending has increased roughly 60% in the past ten years while the number of students has declined by 10%.

Speaking on VPRs Vermont Edition, Tax Commissioner Tom Pelham says the state cannot continue to pour money into education when it faces other budget needs in a slumping economy:

(Pelham) "That is just not sustainable so we have a system that is growing at a rapid rate that doesn’t have embedded in it cost controls that can keep Vermont’s education system affordable."

Paul Cillo is the director of the Public Assets Institute and one of the architects of Act 60. He says the current law is doing what it was intended to do:

(Cillo) "What we have now is a school funding system that allows every school district in the state to have equal revenue raising ability for their school that didn’t exist before Act 60 that every taxpayers is treated fairly any household with the same income same house value in a town with the same spending per pupil as any other pays the same tax under the system."

The Douglas Administration also wants to cut the eligibility cap for the state’s income sensitivity program from a household income of 90 thousand dollars to 75 thousand dollars.

Households that qualify for this program pay their school taxes based on a percentage of their income and not the value of their property. Tax Commissioner Pelham says the program is too generous:

(Pelham) "There’s no free lunch when it comes to income sensitivity and we are in whether you look a year out or two years out we are in very difficult financial waters……..and I think the governor feels that in this current environment some of the changes that the Legislature has made in recent years to income sensitivity go too far."

But Paul Cillo argues the change will boost property taxes for more than 13 thousand families:

(Cillo) "I think a better solution if things are bad for some people is to expand income sensitivity……… so more people can take advantage of it."

The governor’s plan faces an uncertain future at the Statehouse because Democratic leaders have expressed strong concerns about the proposal.

For VPR News I’m Bob Kinzel in Montpelier.

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