The Education Conversation

Hugh Kemper has been studying K-12 education spending, funding and outcomes for more than three years and has become an expert on the subject.  Vermont Tiger has published his findings and applauded his appointment to a task force that will report to Governor Douglas and the Legislature on reforming education spending and funding. 
We thought it would be helpful for Vermont Tiger readers to learn more about this task force and its mission.  So in the first of what we hope will be a series of conversations with Kemper about education in Vermont – and its financing – we begin with that topic.

VT: Tell us about the Education Funding Task Force. Why was it created and what is it doing?

HK: The Education Funding Task Force was created in response to the invitation extended by the Governor to the Legislature in his inaugural address to join his administration in a collaborative effort to contain education spending and replace Act 60/68 with a fairer and more equitable funding system.

HK (cont):The Task Force meets weekly and has, to date, achieved a general consensus on its broad goals and objectives which, in a manner respectful of the Brigham Decision’s dictate of equal access to educational opportunity, are (1) to make the education funding system more transparent with an understandable link between school budget votes, school spending and taxes; (2) to flatten the education spending growth curve and property taxes for the foreseeable future until the economy rebounds and (3) to bend the education spending growth curve for the long term to match underlying economic growth.

The last few meetings have focused on alternative cost control, cost reduction and cost allocation strategies. The next meeting, I believe, will try to achieve agreement on what the Task Force’s immediate priority should be, i.e. whether we should prioritize controlling costs or improving the funding system.

VT: What do you think the priority should be? Spending or funding?

HK: I favor prioritizing cost containment as I agree with Governor Douglas’ characterization of education spending as being “on a collision course with economic reality” and as I believe we can achieve significant cost savings without compromising the capacity of public education to provide a quality education.

Clearly we need to consider alternatives to Act 60/68. However, developing a more equitable funding system that will also serve as an effective means to contain costs will likely take some time. Implementing cost containment initiatives will also take some time but the alternatives for controlling costs are readily identifiable and we can get started implementing them in the near future.

VT: Clearly, you’re into the numbers. Most Vermonters aren’t. Is there a way to express the threat education spending poses to Vermont’s economic viability that will resonate with most Vermonters?

HK: Yes, I think there is with a formula that expresses What and Who pays for public education spending which currently consumes 42% of state revenues:

100% of Property Taxes + 45.1% of Personal Income Taxes + 33.6% of Sales Taxes

If Vermont does not change its ways, i.e. if one extrapolates into the future Vermont’s demographic, spending and taxing trends over the past twenty or so years, by 2030 education spending, according to the Ethan Allen Institute’s Vermont Off the Rails, [written by Art Woolf and Richard Heaps] will consume $2 of every $3 of state revenues. Expressing this in current day terms, the What and Who formula would look like this:

100% of Property Taxes + 100% of Personal Income Taxes + 100% of Sales Taxes

This would pay for 90% of public education spending. The State would still need to find additional funding sources for the remaining 10%. 

VT:  And that won’t happen?

HK:  That can’t happen.

 

Comments

[Tom Licata]

Vermont school spending is quickly approaching 50% of its total budget. It is time – if only temporary – for the state to take over all of our district’s finances and consider the long term control of all schools’ operating budgets.

We can no longer afford our schools’ small enrollments and class sizes.

A Blue Ribbon Commission should be appointed to recommend school closures throughout the state and if local communities resist, they could be given the option to make whole the opportunity cost of keeping these schools open.

Lastly, school districts could be reduced from our roughly 285 to as few as one, or as many as 14 or one for each of Vermont’s counties.

Bankrupcy or near bankrupcy conditions within one to three years is Vermont's future if this and/or other meaningful and drastic reforms are not enacted very soon.

[james dwinell]

i thought that 100% of the lottery profit according to their ads goes to support the education fund.

true?

james

[jerry coleman]

the money that comes from the lottery is just a drop in the bucket!!!

[Planman]

Hugh,
Please clear up a question that comes with attempting to use your simple formula for showing what and who pays for VT education. In our small town for every $1 collected as a property tax, $.75 goes to fund our school and $.25 goes to cover the costs of running our town. So we cannot say that 100% of our property tax dollars go to fund our education costs. Did you mean to show in your formula that a dollar amount equivalent to 100% of the property taxes collected in the state goes to fund education? And is the same true for the other two components of your formula...that amounts equivalent to 45.1% of personal income taxes and 33.6% of sales taxes make up part of education's funding?
While we're on the subject of education, can you identify the statewide drop-out rate and your information source. Can you identify or offer an opinion about what the number or percentage of kids may be that have been "pushed" through our school systems and given a diploma but have not received a practical education. In other words, they cannot effectively read or write or do simple math problems. If you are able to offer such an opinion, please indicate your sources of validation.
If some other interested "Tiger" can supply creditable information and sources relating to these topics, please do so. Thank you.

[Hugh Kemper]

Thank you for raising the property tax issue. The revised formula should read:

100% of Education Property Taxes + 45.1% of Personal Income Taxes + 33.6% of Sales Taxes

The Personal Income Tax component is derived from the annual amount transferred by the State from the General Fund to the Education Fund. In 2008 this transfer amounted to $280.2 million or 23.4% of General Fund revenues. The largest contributor to the General Fund is Personal Income Taxes which in 2008 equaled $620.8 million or 53.3% of General Fund revenues. The 2008 General Fund transfer to the Education Fund, i.e. $280.2 million is 45.1% of $620.8 million, i.e. the total amount of Personal Income Taxes collected.