Commentary: Where Gov. Scott’s Education Transformation Leads (January, 2017)

By John McClaughryJohn McClaughry

Gov. Phil Scott’s budget address promised a balanced General Fund budget lower than last year’s. It reiterated his opposition to any new taxes and fees, and pledged to make the required annual required contributions to keep the two state retirement funds from slipping even further away from long-term solvency. Those features deservedly won applause.

When it came to education financing, however, the governor proposed what he called “incredibly strong measures” that vaulted him well into high-risk territory.

Scott says that the state must mandate “transformative changes” to “stabilize and control local school spending”. Before looking at the specifics, it’s worthwhile to recall what previous governors have done about this. (The quotes are from my commentaries at the time.)

In 1996, just before the enactment of Act 60, I wrote “A key feature [of Gov. Dean’s] property tax solution is putting the state in charge of local education costs which are ‘out of control’. … Montpelier will impose mandates and penalties to control local school spending. If a town spends ‘too much’ on its schools, it will face what amounts to a state tax on its excess educational spending.”

Shortly after that the Supreme Court issued its Brigham decision. The legislature and Dean quickly enacted Act 60, still the basic education finance law. At that time, I wrote “What legislators have not yet grasped is that by centralizing education finance through the state, and putting the state in charge of cost containment, they are well on the way to creating One Big School System. They are now trying to make that system more efficient through local district consolidations, spending caps, system-wide teacher contracts, joint purchasing, combined facilities usage – all the techniques that people in charge of any big system employ to squeeze out inefficiencies and reduce costs.” Sound familiar?

Fast forward to 2003. “Whatever ‘cost containment’ scheme is eventually adopted, [Gov. Douglas’s] ‘Act 60 reform’ will mark an important milestone. Never in the history of the state has the state imposed a penalty on a local government for spending too much money. This bill makes it crystal clear that local control over education spending, and thus over public education itself, is well on the way out. Indeed, the bill candidly amends the present chapter title ‘State and Local Funding of Public Education’ by deleting the words ‘and Local’”.

Fast forward to the Shumlin years (2011-16). Of the four recent governors, Shumlin most strongly supported continued local control of education, saying in 2014 that “one of the worst ideas that we can endeavor is telling local communities that we’re gonna take away their power to choose what they’re gonna spend on education on town meeting day. That’s a basic right of Vermonters.”

Shumlin’s remark came in response to a proposal made by then-Lt. Gov. Phil Scott. In October 2014 Scott advocated creating the equivalent of the Green Mountain Care Board “to help rein in school spending costs and control education property taxes.” He said his autonomous board of experts could “control school budgets, adjust property tax rates, and force consolidations.” “At least by implication”, I wrote, “it could take any action it saw fit to flatten out rising public school spending.”

Now, as governor, Scott has proposed a state mandate that school districts level fund the next school year, regardless of what school district voters want and are willing to be taxed for.

Today, local voters can choose to spend over 121% of the state average spending per equalized pupil, at the price of paying a residential property tax rate penalty. Next year, if Scott’s proposal is enacted, they will be forbidden to vote a school budget above what the state mandates.

In 1996, in response to Dean’s proposal (that was not enacted), I wrote: “The ‘solution’ for education costs, and thus property tax relief, will not be found in Montpelier-imposed cost control. It lies in changing the rules of the system to expand competition among providers, local initiative, consumer information and choice, and innovative learning methods ranging from apprenticeship and mentoring to distance learning via Internet.”

“That will result in more satisfied and better educated children, more efficiency in the use of tax dollars, and lower property tax burdens… [The ‘solution’ does not lie in] a Montpelier bureaucracy using an ever-bigger hammer to enforce its budgetary will on an ever more costly government-run school system long overdue for radical change.”

Back then, we badly needed “transformative changes” in education. Now, 21 years later, we still do. Gov. Scott’s proposed change is transformative, all right, but it would lead rapidly to the final destruction of any sort of local control in education.

It would accelerate Vermont’s trend toward having One Big School System. That’s a transformation we don’t need, don’t want, and ultimately can’t afford.

- John McClaughry is the founder and vice president of the Ethan Allen Institute 

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