Two recent proposals by Gov. Peter Shumlin conflict in surprising ways, and neither serve the state’s best interest.
Let me explain.
Earlier this month, Gov. Shumlin proposed a “zero increase” in the statewide property tax rate. Saying it was critical to hold down the property tax rate to avoid increased taxes to Vermonters, he essentially proposed a cut in the amount of money he would transfer from the General Fund to the Education Fund. “I am bound and determined not to see property taxes go up when Vermonters are struggling to pay their bills,” he said when making the announcement at a Dec. 1 press conference.
Sounds good, right? But hold on. His administration and the Legislature’s Joint Fiscal Office had earlier predicted spending increases in education of about 1.7 percent. To counter that projected increase, he is asking school districts to level fund their budgets for the third year in a row - thus saving about a penny on the tax rate.
Meanwhile, the governor recommended a per-pupil spending rate that would be half the increase allowed by statute. That rate had been capped for the past two years at $8,544 and under statute would have been increased by 4.2 percent (inflation for the past two years) to $8,891. Shumlin proposed raising the rate by just 2.1 percent, or to $8,723.
Each of the proposed changes cut a penny off the tax rate (two cents total), which would roughly yield about $22 million.
The consequence shouldn’t be lost on many property owners. If the state reduces the amount it contributes to the education fund, there are two consequences: School districts cut spending or local property taxes will likely see a jump to fill in the gap.
The governor dismissed criticism of his approach saying that education groups (the Vermont-NEA and Vermont Principals Association) had agreed to the reduction in the General Fund transfer last year and knew that last year’s stimulus funds were to be used as a bridge to make cuts in preparation for this budget year. He also noted a drop of about 650 teachers in the state, partially as a consequence of a drop in school enrollment across the state, citing that the student-teacher ratio is still the highest in the nation at 10.7 students for every teacher.
The consequence, nonetheless, is likely to harm the quality of education; and certainly is not a progressive stance that seeks to improve educational outcomes for Vermont’s students.
Eight days later, on Dec. 9, the governor and the Vermont State Employees Association announced they had jointly reached a tentative union wage settlement for three bargaining units — corrections, supervisory and non-management units — in which the effective increase in wages will be 5 percent in 2012 and another 2 percent in 2013. Specifically, the agreement called for 2 percent increases in both years from July 2012 to July 2014, as well as restoring the 3 percent wage cuts taken by state employees for the 2011-12 fiscal years at the end of June 2012. Plus, previously frozen step increases will resume in July 2012.
The proposed agreement last Thursday is mystifying because such a generous settlement will send state labor costs soaring, even though the state still faces significant deficits.
The tie that binds both actions by the governor is politics. The latter proposal gets a motivated and organized body of political foot soldiers at the ready, while the former appeases many Vermonters by tough talk against raising taxes.
But is cutting back on education spending, and hiking state wages at double inflation, in the best interest of the state — or him?
Angelo S. Lynn