Our Opinion: Act 46 growth cap is a costly savings

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No astronaut wants to repair the oxygen supply before the rocket leaves the atmosphere, but that's what lawmakers are facing right now with a provision of Act 46 that threatens to choke school districts from Pownal to Derby Line sooner or later.

Act 46's school spending cap was intended to prevent large increases on the education tax and ease the burden on taxpayers, while creating spending equity from one district to the other.

But as school districts pull their budget plans together for the coming year, many are faced with little choice but to cut staff, teachers and classes. The Act 46 spending cap is so restrictive, it cannot account for fixed cost increases.

"Just the 7.9 percent increase in health insurance alone is pushing everyone above the cap," Windham Southwest Supervisory Union Superintendent Chris Pratt told the Brattleboro Reformer's Chris Mays this week. "I think that's why so many conversations are going on that are tied into Act 46 in regards to 'What are we going to do?'"

While Act 46 aims to merge schools and boost education while cutting costs, this provision is a non-starter. In fact, it's a real head-scratcher.

School spending is limited to 2 percent growth. Any increase greater than that (such as the 7.9 percent increase in health insurance for the coming fiscal year) means school budgets get cut or face a financial penalty in the form of a so-called double-tax.

In Woodford, school spending is up just $240 in the fiscal 2017 budget proposal, but residents' taxes still could increase, the Bennington Banner's Derek Carson reported this week. Why? A decrease in revenues, a decrease in the town's common level of appraisal, and spending growth caps enacted as part of last year's Act 46, according to Carson. It's a complicated situation, but suffice it to say that even if Woodford cut its spending, the town would still be taxed at a higher rate, thanks to this confused Act 46 provision.

Pratt also warned that those cuts will affect smaller schools disproportionately.

Said Pratt, "I think the big conversation's going to be around what can be cut out of the budget without compromising student learning. With small districts, there is nothing. No matter what you take out, you're going to compromise student learning and it's going to do the opposite of what the state set out to do."

Health insurance isn't the only uncontrollable factor that threatens to pose a budgeting challenge within Act 46 limits.

Windham Central Supervisory Union Superintendent Steven John said special education costs and fluctuations in student populations are other considerations. Capital expenditures, bond payments and other expenses impact spending as well.

Windham Central Supervisory Union's school boards are "pretty determined" to stay below the limit, though Marlboro's elementary and junior high school's board could be the exception, according to John.

As highlighted in a report by the Burlington Free Press this week, time is of the essence. If the cap isn't repealed or modified by the time school budgets are completed, students will end up suffering the consequences. The Free Press recalled that the spending cap provision was a controversial one and was hammered into the legislation at the last minute last year. The question of its constitutionality remains an open question.

For these reasons, the Legislature ought to repeal the cap right away. While some suggest the Legislature could modify the provision, we harken back to our astronaut analogy. We see this provision as far too complicated to fix on the fly; there are many moving parts affecting many constituencies.

In the meantime, the provision's constitutionality should be reviewed. If it passes, lawmakers ought to develop a model that provides Vermonters with property tax relief and the educational parity the law aims to achieve.

If Act 46 is to succeed, it cannot unhinge the very foundation of our young people's education — teachers and classes.


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