[A]s House Education Committee members navigate declining student enrollments and rising education costs and property taxes, the Vermont Association of School Business Officials laid out the case for school district consolidation on Friday.
Richard C. Pembroke Jr., president of the association and the chief financial officer for the Southwest Vermont Supervisory Union, told lawmakers the state can find savings from the elimination of some of the smaller supervisory unions and school districts.
Pembroke and Grant Geisler, the executive director of operations for the Vermont Association of School Business Officials and the chief financial officer for Chittenden Central Supervisory Union, urged the committee to eliminate the small schools grant and the so-called phantom student subsidy that is available under a “hold harmless provision.”
Both subsidies ease the increase in per pupil costs for small schools in rural areas of the state that are depopulating. The increase in the cost of education in those districts is paid for by property taxpayers across the state.
Vermont has a statewide property tax rate that is set annually by the Vermont Legislature and the governor’s office. Spending decisions, meanwhile are made by local school districts. The Legislature created a statewide property tax rate in response to the Vermont Supreme Court’s decision in the Brigham case, in which the state’s educational funding system was ruled unconstitutional because towns with property wealth could generate more in education property taxes than poorer towns could. Act 60 and Act 68 were designed to create a more equitable system for distribution of property taxes across poor and wealthy districts.
In the past few years, as the state has grappled with a 20 percent decline in student enrollment, there has been a public outcry over increases in the statewide property tax rates and questions about the efficacy of Act 60 and Act 68.
Pembroke said he is pleased with how Act 60 and Act 68 work, but costs under the law have been allowed to escalate. “I urge you to let it [the law] do its job,” he said. “By manipulating base rates, the Legislature is not allowing the cost containments in the system to work properly.”
Geisler said the Legislature must reduce spending and consider restructuring school districts in order to keep the state’s educational system viable.
“While governance change has long been considered the ‘third rail,’ and I recognize the cultural challenge, this is the single-most important change that can be made in order to reduce costs and increase student opportunities,” Geisler said.
Vermont’s current structure, with nearly 50 supervisory unions and 270 school districts, is too cumbersome to oversee the education of the state’s modest student population. So, in its stead, Geisler advocates single, unified pre-K-12 school districts, with each district serving a minimum of 1,500 students.
Geisler recommended enforcing the minimum class size. He said the law requires class-size standards, but “there is no consequence if they do not adhere to those standards.”
That step alone, according to Geisler, could save the state tens of millions a year — and should be measured by classroom teachers.
Geisler also suggested that the state take a hard look at the Vermont Education Health Initiative.
“As long as the Vermont Education Health Initiative continues to exist, school boards will have an extremely difficult time negotiating any other kind of health coverage,” testified Geisler. “The coverage that teachers receive with VEHI is much greater than any coverage option under Vermont Health Connect (even the platinum plan). Since the Vermont NEA has significant power, there is little chance any small, local school board will be able to negotiate more favorable health coverage terms.”
The organization is pushing for H.883 to be put back on the table this year for the Legislature to consider. Last year, the House Education Committee proposed the legislation which would have, as of July 1, 2020, eliminated supervisory unions and created expanded pre-K through 12th grade school districts.
Pembroke also suggested jettisoning all exceptions to the excess spending threshold, and suggested that the Legislature “seriously revisit the income sensitivity formula.”
“Does someone earning over $90,000 really need assistance in paying their property taxes?” Pembroke asked. “If they do, we as a state, have a more fundamental problem than education funding.”
Pembroke said although consolidation will mean job losses for some of his counterparts, and “… some people don’t often like to hear what we have to say,” that he and the other business managers who provided testimony Friday, “… We’re in positions where we’re comfortable telling you the truth.”
“I know that some of this won’t be totally popular,” began Pembroke.
Pembroke said that in Southwest Vermont Supervisory Union, “we have been on the voluntary consolidation/cost sharing process since the early ’90s.”
He cited examples of savings that have been accomplished, from food service to transportation, but stated, “There are additional savings to be had that are met with resistance. The main reason for the lack of progress is board members not wanting to give up their perceived local control regardless of the savings.”
Geisler presented his testimony after Pembroke’s and brought attention to the earnestness of their joint testimony. “It is extremely significant for you to remember that we are up here begging you for unified pre-K-12 districts, and superintendents are begging. … Even though we know that transitioning to it is going to be a nightmare, and at the end of it,” there will be pink slips.
“We’re here arguing for something that’s going to be good for kids, save taxpayers money, and may put us in the unemployment line,” said Geisler. “I think you need to think about kids first. … Students would have more opportunities with additional schools and programs to choose from in a larger district.”
Rep. Tim Jerman, D-Essex Junction, said at the conclusion of the business managers’ testimony, “I do hope the committee will give a lot of credit to what these gentlemen are saying.”
Testimony was also entered into the record from Bob Mason, chief operations officer for Chittenden South Supervisory Union, and Peter Amons, the CFO of Rutland City Schools, in the form of a letter he sent to House Speaker Shap Smith and a series of recommendations he outlined.
In his letter to Smith on Dec. 31, Amons wrote: “There is a lot of discussion about the structure of the current Act 60/68 funding mechanism when the core problem really is that Vermont education costs a lot and costs more than it needs to. Possibly the wrong issue, financing structure, is getting the most attention.”
“It is very hard for anyone with a financial or business perspective to look at the large number of schools for so few children and large numbers of school districts/boards and not see such spending as unnecessary,” continued Amons.
Amons stated, “We seem to have many schools being kept open by too many school districts/school boards which in turn drives more supervisory units and jobs like mine, which could be reduced if the whole pie were scaled back, evenly over time, starting at the bottom with school districts.”
Amons said the Legislature must consolidate school districts “or it won’t get done.”
Mason echoed his business office colleagues from around the state, and said H.883 was a fair, commonsense solution.
“If the Legislature does not wish to identify schools for consolidation/closure, possibly hiring an outside firm to act as a ‘military base closing committee,’ is in order,” he suggested.
Amons, in a memo sent to the Statehouse this week, dated Jan. 21, proposed to the Legislature that an outside consulting firm be hired to “evaluate the continued need for any school with fewer than 200 students.”
