VLCT head urges against using education surplus

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(Host) Leaders of Vermont’s cities and towns say the state’s education funding system could collapse if a surplus in the education fund is tapped to support the rest of state government.

The Tax Department estimates that the education fund will have an 18 million dollar surplus at the end of the budget year.

State law requires the tax commissioner to estimate the health of the fund every December – and recommend whether the education property tax rate should be adjusted.

This year, the Douglas administration did not recommend changing the tax rate. And some say that violates state law. Steve Jeffrey is in charge of the Vermont League of Cities and Towns.

(Jeffrey) “That $18.3 million that has accumulated basically because property taxes last year were set too high should be returned to the property taxpayers. The commissioner is supposed to set a tax rate that eliminates that surplus. And that would mean about a 2-cent property tax rate reduction across the state, both on residents and non-residents’ property.”

(Host) But Governor Jim Douglas says he doesn’t want to recommend a lower rate. He says it doesn’t make sense to make that suggestion while the rest of state government faces spending cuts.

(Douglas) “I think these are extraordinary circumstances. This is the kind of economic and fiscal crisis that we haven’t confronted in some time. And that’s why I urged a couple of weeks ago that we preserve all options, that we keep everything on the table, that we not rush to a decision in one area that would limit our flexibility in the overall budgetary picture. So I think that’s prudent.”

(Host) Critics say current state law doesn’t permit that kind of flexibility.

Steve Jeffrey of the League of Cities and Towns say the law was written to prevent the legislature or administration from using education money for other purposes.

(Jeffrey) “The law is very clear that if education funds are used for any other purpose other than that required by the law that the statewide property tax is eliminated, it’s abolished, automatically.”

(Host) Jeffrey says he and others will fight hard to prevent the Legislature from using the education fund surplus for anything other than schools.


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