In the debate over school funding reform, all eyes this year have been on the statewide residential property tax rate.
The tax rate has become the go-to marker for people trying to get a bead on how much their bills are going up next year. But it turns out the rate isn’t always a useful indicator for that kind of information. And critics say lawmakers are exploiting voters’ ignorance about how the education funding system works to obscure how much taxes are actually rising.
Of all the numbers in the education financing debate this year, perhaps none mattered more than ‘seven.’
That’s the number of cents the statewide residential property tax rate was forecast to rise – the highest annual leap in more than a decade. And angst over the increase set the stage for what would become a prolonged debate about school funding and governance reforms.
So when Democratic lawmakers last week announced a compromise deal that would see the residential rate rise by only 4 cents, the news seemed cause for celebration. Until Republicans began to look under the hood, and found evidence of what Stowe Rep. Heidi Scheuermann says is nothing more than a political bait-and-switch.
“So it’s like pulling the wool over Vermonters’ eyes,” says Scheuermann.
Scheuermann, a Republican, had been exploring a run for governor over the past six weeks. She decided against it Tuesday.
“It’s just another way that money games are played over in Montpelier that are really disappointing,” Scheuermann says.
"It's just another way that money games are played over in Montpelier that are really disappointing." Stowe Republican Heidi Scheuermann
The game Scheuermann refers to involves something called the “base education amount.” It’s a crucial figure, because any per-pupil spending above that amount in a given school district has to be paid through local property taxes. The term is little known outside policy circles. But when it comes to determining homeowners’ property tax bills, it’s just as important as the statewide rate.
Sure, lawmakers might have ratcheted down the penny rate, Scheuermann says. But they simultaneously tweaked the base education amount in a way that will offset some of the savings taxpayers might have otherwise enjoyed.
Steve Jeffrey, executive director of the Vermont League of Cities and Towns, says the mathematical maneuvering appeared designed to project the illusion of tax relief. In fact, he says, the reduction in the base education amount simply means taxpayers will see a commensurate increase in their local share of the property tax.
“I don’t know how you call it anything other than gimmickry at the end when the conferees adjusted the base education amount that would be generated from that base education tax rate,” Jeffrey says.
Bristol Rep. Dave Sharpe, the ranking Democrat on the House Committee on Ways and Means, says there are sound policy reasons for the reduction in the base education amount. He says it’s true that it doesn’t mean taxpayers will be paying any less on the whole. But he says it redistributes the burden slightly, in ways that relieve pressure on the higher-earning households that have endured the steepest tax increases over the past few years.
But Jeffrey is calling on Vermonters to demand more substantial education spending reforms.
“We just feel like the lack of initiative and the lack of effort by the Legislature this year, and by the administration to really address this, needs to be put at a significantly higher level of priority in this election as well as the Legislature in 2015,” Jeffrey says.
The property tax issue "needs to be put at a significantly higher level of priority in this election as well as the Legislature in 2015." - Steve Jeffrey, executive director Vermont League of Cities and Towns
Jeffrey says voters can make the issue a priority by asking candidates hard questions this summer and fall about what they’ll do to reform education funding or school spending.
“I think it is time for people to put their legislative candidates and their statewide candidates on the hot seat, and let them come forth with their ideas about how they will, if elected, or in some cases reelected, address this issue,” Jeffrey says.
Lawmakers’ ability to reduce the increase in the statewide residential property tax rate – it will be 98 cents per $100 of assessed property value –will have some impact on actual property tax bills. Part of the reduction in the penny rate stems from the use of one-time surplus and reserve funds, which will lower the overall amount that will have to be raised by the property tax.
