Senate Passes Education Funding Bill, Which Heads to the Governor

Sen. Ann Cummings (D-Washington) discussing H.850 on Thursday Credit: File: Kevin McCallum ©️ Seven Days

Vermont lawmakers on Wednesday gave final approval to a bill intended to address this year’s school budgeting debacle. The measure now heading for Gov. Phil Scott’s desk would allow school districts to reduce spending and postpone budget votes until April 15.

The Senate suspended its rules to quickly pass H.850.

“There is no question that Vermonters can’t afford some of the increases that are being discussed,” Sen. Ann Cummings (D-Washington) said.

She warned colleagues that if nothing is done, some Vermonters, particularly those on fixed incomes, could be forced to sell their homes to pay their taxes.

Soaring school spending driven by inflation, higher health care costs, new pupil funding formulas and the evaporation of federal pandemic funding are all conspiring to push property taxes sharply higher across the state. A 20 percent increase in homestead property taxes is forecast statewide, with some wealthier communities facing increases of as much as 40 percent in the school portion of their tax bills.

The bill would repeal a 5 percent cap on property tax increases contained in Act 127. The 2022 law was intended to increase funding to districts with higher per-student costs, such as rural schools or those with more low-income students or English language learners.

The cap was meant to soften the blow for the handful of districts expected to receive less state funding, but it didn’t work as expected because of spending increases statewide.

The new bill replaces the cap with a “cents discount,” or a five-year property tax break seen as a better, simpler way to smooth out the tax increase and restore the direct relationship between budgets and taxes: The lower a district’s budget, the lower the tax rate. The measure requires clerks in towns that choose to postpone their votes to automatically send new mail-in ballots to anyone who requested one for Town Meeting Day. It also sets aside $500,000 to help districts pay for the new elections.

It is unclear how many districts will postpone their votes. Montpelier Roxbury Public School District recently opted to go ahead with its Town Meeting Day vote — despite a $32 million proposed budget driving a 24 percent increase in school property taxes. Talk has already begun about possibly closing the 42-student Roxbury Village School.
The Senate passed the bill on a voice vote, and it sounded as though only one or two senators voted against it. One of those was Sen. Russ Ingalls (R-Essex), who said he doesn’t know what to say to constituents who ask him how this happened.

“It’s just hard to comprehend how something that so much time was put into really kind of failed so miserably,” Ingalls said.

Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) stressed that the problem had exposed significant problems in the state’s education funding system that would require “new and groundbreaking” reforms this session.

“This is the first step. The second step is to think about cost containment,” he said.