Act 60, and its successor, Act 68, have been controversial pieces of legislation ever since their origins in the historic Brigham decision handed down by the Vermont Supreme Court in 1997. Both were intended to address a serious problem in the way the state financed education. The problem was that some communities which didn’t have a robust-enough business and residential tax base to draw upon had to raise local property taxes to eye-watering levels in order to obtain enough revenue to fund their schools to basic standards. Too often, that led to compromises with the quality of the education that could be offered in those communities.
The trade-off between keeping property taxes at rates perceived as reasonable might have meant no new computer or science equipment, or other facilities that more affluent communities could finance with relative ease. The fact that the less-affluent communities found themselves in the worst of both worlds -- high taxes and less well-equipped schools -- helped perpetuate both undesirable situations.
Anyone who lived here in the late 1990s remembers Act 60 was wildly unpopular in most local precincts for understandable reasons. Towns like Manchester and Dorset qualified as so-called "gold towns," where more money was raised through educational property taxes than was needed locally to help subsidize other towns less fortunate.
The tax rate in Manchester was higher than it would have been under the old formula. The special school funds that were established to exploit a loophole in the law. Some of the kinks in Act 60 were straightened out by Act 68 in 2003, but the statewide property tax, and the mechanism to tax affluent communities more in order to transfer money to other towns, remain as centerpieces of the original legislation designed to level the playing field.
However, at some point, times and circumstances change. The useful lifespan of most educational financing schemes in Vermont has typically been about 20 years, and we’re nearing that milestone with Act 60.
The law is cumbersome and hard to understand -- even a lot of so-called tax and financing experts seem to be unable to explain it clearly, given its opaque structure of things like "common levels of appraisal" and "coefficients of dispersion."
Its worst fault may be the difficulty of giving voters a clear sense of just exactly what their tax rates will be when they gather at Town Meeting to pass judgment on a school budget. If school officials can’t tell voters that approving a budget of X dollars will result in a tax rate of Y dollars per $100 of appraised property value, and adding or subtracting this or that will change the rate to something else, then the connection between the budget and the tax rate -- and grassroots local control -- is essentially severed. No one is accountable. Local school boards blame the state, and the state blames the local boards. Voters get apathetic and throw up their hands. A bad situation all around.
This past March saw 35 towns around the state defeating their proposed school budgets, the most in over 10 years. Most local school boards did a pretty good job of trying to hold their budgets to a reasonable level, but due to the vagaries of the education funding formula, some towns, like Bennington, for instance, saw much higher projected jumps in tax rates than the increases in their school budgets. A message was trying to be sent that the kind of tax increases needed to finance local schools was not, in those 35 towns at least, sustainable.
Hopefully, that message got through to lawmakers in Montpelier.
It may have. The House Education Committee recently finished work on a bill that would usher in some far-reaching changes to the governance structure of schools in Vermont -- in 2018.
The House Ways and Means Committee trimmed a chunk off the projected increase in the state property tax rates for residential and non-residential properties, albeit by shifting some of the pain elsewhere. But both pieces of legislation have to run a gauntlet in the Statehouse before they are passed, and such passage is far from certain.
Amid this tinkering comes an initiative spearheaded in part by Rep. Patti Komline, along with one of her legislative colleagues, Rep. Heidi Scheuermann of Stowe, to "repeal and replace" Act 60 with ... something else. Some ideas have been floated, but there are many gaps to filled in before we would have a clear sense of the post-Act 60 environment. That has been the focus of the criticism leveled against Komline and Scheuermann’s initiative, and its understandable.
It’s similar to the criticism voiced against Gov. Shumlin’s Green Mountain Care "single payer" proposal, since the governor has opted not to spell out how to pay for it, which tends to chill things a little when you’re talking about something projected to cost more than $2 billion, less former insurance premiums. But the governor seems in no rush to clarify. There’s an election to be won first, and a political debt owed to the state’s Progressive Party, so they won’t think about running a third party candidacy.
And of course, the oft-repeated phrase of no new broad-based taxes to be honored.
Ordinarily, we’d like to see more details about what’s supposed to replace Act 60/68, but this law has become so riddled with problems that the only way it is likely to be replaced with something else is to employ the brute force method.
The legislature opted not to embrace the idea this year, so Komline and Scheuermann -- who may or may not be a candidate for governor this election year -- are hoping an online petition gathers enough signatures to force the issue, perhaps in the 2015 legislative session.
We wish them success and encourage all who feel that Act 60 has outlived its usefulness to sign it and send a message.