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Act 60 is in Trouble
Act 60 needs more money. That was the message at the annual meeting of the
Vermont Coalition of Municipalites (VCM) in Rutland on Wednesday when
legislative leaders and economists spoke about the fate of the education
funding law. It was an afternoon of gloomy statistics probably best summed
up by Speaker Walter Freed's (R-Dorset) comments: "We told you so."
When Act 60 was passed, opponents predicted that it would not be
sustainable. Now, those predictions are backed up by a report compiled for
VCM by Northern Economic Consulting (NEC, publishers of the Vermont Economy
Newsletter: http://www.vteconomy.com/. The NEC study found that taxes
have soared while education expenses have outstripped inflation, despite a
drop in enrollment.
The typical Vermont family's education tax bill is 29 percent higher than it
was when Act 60 was enacted four years ago, according to the NEC report.
Total spending for K-12 public education has increased by 26.3 percent in
this period, from $720.8 million to $910.5 million. Above block grant
spending, requiring participation in the shark/sharing pool, has increased
by 63 percent since FY99.
The report forecasts that if established trends continue, the Education
Fund will use up its reserves during FY03 and post deficits that total
$5, $12.3, $21.4 and $32.4 million in FY03 through FY06. Obviously, some
action must be taken to avoid this situation. While the report makes no
recommendations, it does list several policy options that might be explored
by the legislature:
Even before the representatives from the VCM's 55 cities and towns heard the
report, Senate Pro Tem Peter Shumlin (D-Windham) and Speaker of the House
Walter Freed (R-Dorset) both talked about the extraordinary costs of
education.
While Shumlin is still committed to Act 60, Freed remarked that education
funding schemes, like locusts, seem to come around about every seven years,
and we are "about on schedule" for more change. However, like Shumlin, he
had no easy answers for where to get the revenues. Shifting education
funding to other taxes would require huge increases, he said - a 15 percent
sales tax, a 55 percent rooms and meals tax, a tax of nine dollars on
cigarettes, or a shift from a 24 percent state income tax to a 51 percent
income tax (based on percentage of federal taxes). None of these would be
politically or practically feasible.
Freed offered no specific proposal at the meeting other than to say he
thinks the income sensitivity provisions of Act 60 need to be revisited
because some higher-income people are qualifying for them.
James Dwinell and Libby Sternberg are editors of the conservative
Dwinell-Sternberg Report, which is published weekly by JDLS Publishing, LLC.
Portions of the Dwinell-Sternberg Report may be reprinted with attribution.
And Somebody's Gonna Have To Pay
A copy of the NEC report is posted on the Act 60 web site:
http://www.Act60.org
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