In his fifth inaugural address, Gov. Phil Scott pledged to fix a “broken and failing” education funding system and to deliver on the topic that most infuriated Vermonters in November: the rising cost of it all.
As is typical for an inaugural speech, Scott did not delve into specifics. But the governor said Thursday he would unveil “a multi-year plan to transform education” when he released his budget proposal in two weeks. And in broad strokes, Scott teased a plan that would overhaul Vermont’s byzantine school governance structure and see the state assume a direct role in deciding how much districts spend.
Scott’s speech was delivered on the heels of an election where voters re-elected him by his widest margin yet and booted dozens of Democrats in the House and Senate out of office. Vermonters, he told lawmakers in anecdote after anecdote, are fed up.
“I don’t live here. I survive here,” he recalled one Moretown resident telling local officials at a public meeting. “When it comes to politics, I know it can be hard to admit when you’ve gone down the wrong path and need to turn around,” Scott said. “But we’re not here to worry about egos. We’re here to do what Vermonters need. And they just sent a very clear message: They think we’re off course.”
Inaugural and state-of-the-state speeches tend to include a laundry list of policy ideas. But Scott’s 43-minute speech was focused almost entirely on education and housing — he renewed calls to trim development regulations and to bolster funding for rehabbing dilapidated rental units.
Scott only briefly discussed last summer’s floods, and made glancing mentions of public safety, climate change, and health care. The governor, who voted for Vice President Kamala Harris in November, said nothing about President-elect Donald Trump or national politics.
At the heart of Scott’s vision for education reform is a transition to a so-called “foundation formula,” whereby the state would calculate how much districts should spend on their schools and provide them corresponding grants.
Currently, local voters decide how much their school districts should spend when they approve or reject budgets during Town Meeting Day in the spring. Whatever the amount, the state must pay. To calculate each town’s fair share into Vermont’s more than $2 billion Education Fund, residential property tax rates are adjusted based on how much each district is spending per pupil.
More from Vermont Public: How does Vermont pay for schools? A video explainer and glossary of terms
A statewide system gives poorer communities access to statewide resources. But Vermont’s current funding formula also means that higher spending in sometimes more affluent communities drives up taxes everywhere — including in less affluent communities who often spend less.
While potentially explosive in a state where local control is jealously guarded, a foundation formula is fairly typical across the country. And in Vermont, a bill to transition over to such a system even passed the House in 2018 with Democratic support. The architect of that 2018 legislation, then-GOP Rep. Scott Beck, was just elected to the Senate and named Republican minority leader for the chamber — where he is working closely with administration officials on their education plans.
Beck said in an interview Thursday that the transition to a foundation formula would force a series of yet-to-be-unanswered questions, including whether districts would be allowed to approve any spending beyond the state’s base foundation grant.
“And in that case, where do they get that money from? And under what conditions can they access that money?” Beck said. “There’s a myriad of decisions that go into that whole thing. None of those decisions have been made. But I think in various circles, we have committed to going down the road of building a foundation formula in Vermont.”
Scott also telegraphed that his proposals would aim to reduce staffing in Vermont’s public schools.
The governor noted that when he took office in 2017, the state spent about $1.6 billion annually on public schools. This year, that number will exceed $2.3 billion. And Vermont, he noted, has home some of the smallest classes and schools in the nation.
“Some may think this is a good thing. But the evidence shows that many high performing schools throughout the country are larger with bigger classes and higher ratios,” said Scott, who pushed hard, and unsuccessfully, for legislation back in 2018 that would have instituted minimum staff-to-student ratios.
Despite a school governance reform effort passed in 2015 — the highly controversial Act 46 — a tangle of school districts still govern Vermont’s 287 schools. For roughly 80,000 students, the governor noted there are 52 supervisory unions (umbrella school districts) and 119 districts. His forthcoming proposal, Scott said, would include “a new, simplified governance structure.”
Failing to fix this problem is failing our kids. So let’s be bold.Gov. Phil Scott
Scott acknowledged in his speech that what he was proposing would engender backlash. Some will say they want the state’s help, he said, but they also don’t want Montpelier to “mess with local control.”
“All these concerns are more about adults than students. And failing to fix this problem is failing our kids,” he said in a line that received a standing ovation from Republicans and Democrats alike. “So let’s be bold.”
None of these reform ideas would impact next year’s property tax rates, which the tax commissioner estimates could increase by nearly 6% based on proposed spending. But Scott said that if school boards held spending at projected levels, his budget would “lower the impact of this year’s increase with a goal to eliminate it.”
Democrats in the Legislature have long accused Scott of exploiting the public’s ire about rising property taxes by blaming them without offering workable solutions. But Scott’s speech suggests the governor is now willing to take leadership on the topic, according to Senate President Pro Tem Phil Baruth.
“That’s what I’ve been calling for … is to have the governor take the lead,” Baruth said after Thursday’s address. “I think Vermonters trust him on the issue, and he’s taken us up on that.”
Baruth said he isn’t ready to endorse the concept of using a foundation formula to replace the current education funding system. But he said the approach would also have benefits for the legislative branch.
He said lawmakers became the scapegoat last year for property tax increases that resulted from spending decisions made by local voters.
“If Montpelier can’t control spending, if it’s 100% at the local level, and yet we’re going to pay the electoral price, there’s a disconnect,” he said. “So that's one of the advantages of a foundation formula.”
Baruth said the Scott’s plan would also compel local voters and school officials to more closely scrutinize their spending decisions.
“If you had a foundation formula that said, ‘This amount is what a school district is going to get this year,’ and then local communities could decide whether they needed to spend more. And if they did, their tax rate would cover that extra amount, I think at that point you have more accountability in the places where taxes are raised,” he said.
House Speaker Jill Krowinski said Democratic lawmakers are ready to work across the aisle to deliver property tax relief to Vermonters. Though she said she isn’t ready to support or oppose Scott’s preliminary plans, she said she’s committed to enacting a major education reform package before the Legislature adjourns this year.
“I just can’t emphasize enough how focused we need to be when it comes to making sure that our kids get the best education that Vermonters can,” Krowinski said. “And it’s going to take … all of us working together toward that goal.”
Democrats, meanwhile, do not have an alternative reform plan waiting in the wings. The chief vehicle through which legislative Democrats had initially promised to flesh out their ideas for reform — the Commission on the Future of Public Education — could instead become irrelevant. The special panel was tasked with delivering a first set of short-term cost-saving ideas this December; the report it ultimately delivered to lawmakers argued that it had not been given enough time to complete its task. The commission is due to submit its final report next winter, well after Republicans and many Democrats have promised to finish their work on education finance. The legislative session typically ends in May or June.
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