The Senate version of the annual education funding bill passed Wednesday night would put a stop to Vermont's looming property tax hikes, but it stopped short of changing the system.
Overall, this bill asks tough questions about how to reduce costs for Vermont schools. The House and Senate have considered overhauling education financing, moving to a system of paying districts per pupil, but both chambers have refrained from making any major changes this session.
Since the House passed the bill, known as the “yield bill,” the average expected increase in school property taxes has been lowered from 14.2% to 12.5%, due to increased revenue for the education fund and decreased school spending. Earlier this year, this number was expected to be closer to 20%.
Sen. Ann Cummings (D-Wash.), who led the drafting of the Senate bill, told colleagues Wednesday that she “wish it was lower.” But Cummings said the committee, which worked on the bill for about a week, had “no time to do any due diligence” on the more significant education financing changes.
But the bill appears destined for a veto. Gov. Phil Scott said at a press conference Wednesday that he would veto the bill “absent changes.”
Amendments made by some of the agency's finance committee passed by a vote of 19-10, but the yield bill itself was amended and passed by voice vote.
Lawmakers will use about $25 million in temporary state budget surpluses to lower property tax rates and add two new taxes to the education fund that are expected to bring in about $27 million in additional revenue next year. I'm planning something. This $52 million is relatively small compared to the currently projected increase in education spending of $182 million.
The Senate bill would raise the House's proposed tax on short-term rentals from 1.5% to 3%, and is expected to raise about $12 million in the first year.
The Senate version also more closely aligns the House's proposal to eliminate the “cloud tax,” or tax exemption for some software. The Senate version eliminates a software tax that more specifically targets companies.
The bill also reinstates and lowers the “excess spending threshold,” which penalizes high-spending school districts. In one of the bill's most substantial cost containment measures, the Senate voted to lower the 20% average state spending threshold to 16%.
Some members of the Senate Finance Committee, including Chairman Cummings, have decided that rather than pushing a new education finance proposal this year, a small group of senators, state education leaders, and the Education Finance Review Committee, which includes the Education Finance Committee, will decided to prioritize. State tax expert. The committee working this summer will need to consider school and class sizes, alternative funding models, school consolidation, administrative consolidation, spending caps, local control and a variety of other topics.
The yield bills in both chambers also adjust how the Common Assessment Level (CLA) applies to individual towns, with the goal of reducing the impact on local tax rates after the CLA is applied.
Although often inaccurately accused of driving up property taxes, CLAs are used to adjust local tax rates so that property owners pay taxes based on the fair market value of their property. As reimagined in the bill, the CLA would be used in a way that would “reduce some of the big (tax rate) fluctuations that people are so upset about,” Cummings said on the Senate floor.
In one of the biggest changes from the House version, the Senate voted to postpone the Commission on the Future of Public Education, a large body tasked with examining education at the system level, including school financing in Vermont. . .
Instead, the Senate decided to prioritize examining school finances before investigating public education generally, drawing criticism from some members.
“I think this is putting the cart before the horse,” said Sen. Alison Clarkson, D-Windsor.
“We need as many people at the table as possible,” said Sen. Ruth Hardy (D-Addison). “You can't do that with a few legislators, a new education secretary who doesn't understand the school finance system, and a tax commissioner.”
Sen. Randy Bullock (R-Franklin) supported prioritizing funding changes, saying lawmakers need to find a fiscal fix as soon as possible and “stop the bleeding now.” .
The Senate also rejected two amendments by Sen. Martine Gulick, D-Chittenden, who said they would help “contain costs.”
One amendment would prevent public tuition from being paid to private schools located more than 25 miles from the Vermont border. The Second Amendment would prohibit private schools from charging students in public schools higher fees than families who pay out of pocket.
The yield bill returns to the House, which must decide whether to agree to the Senate's changes or make further changes. Alternatively, the bill could be rushed together by a conference committee.