Frequently Asked Questions
- What does LEAF stand for?
- How does the plan work?
- Why provide a credit to municipalities that spend below the block grant?
- How is this different from the Foundation Formula that existed prior to Act 60?
- You are in the minority, how do you expect to move this proposal forward?
- Why restructure special education?
- What about equity? Does this plan comply with the Brigham decision?
- Is it realistic to come up with $158M in additional revenue?
- How does the plan impact non-residential taxpayers?
- Why use actual pupil counts instead of equalized pupils?
- What is categorical aid and why eliminate it?
- Does this plan provide more local control than Act 60?
- What is the purpose of allowing school districts to "opt out" of their supervisory unions?
Local Education Affordability Formula
It is really straightforward. Each school district would receive a per-pupil grant equal to 85% of the average statewide per-pupil spending for the prior year. The grant will be funded with existing broad-base tax revenues, the existing non-residential education property tax structure, cost savings accrued under this plan, and additional broad-base revenue sources identified under the plan.
There would no longer be a statewide property tax on residential property. However, any spending in excess of the grant would be paid for with a property tax raised on the local residential grand list. Towns that spend less than the Grant would receive a credit for 20% of the per pupil savings.
Why provide a credit to municipalities that spend below the block grant?
This represents one of the fundamental differences between Act 60 and LEAF. Rather than influencing decisions with sticks, mandates and penalties, our proposal would empower local voters to make decisions that they feel are best for their communities, while providing them with incentives . carrots if you will . to make decisions that benefit the taxpayers of Vermont as a whole. Since several communities have per-pupil spending below the proposed grant, we need to ensure that there is a financial incentive to discourage .padding. of school budgets up to the amount of the grant.
How is this different from the Foundation Formula that existed prior to Act 60?
This plan is very different than the Foundation Formula on several levels. We are providing each community with a block grant - the Foundation Formula only provided a grant to some towns. Our plan provides a more robust grant that will not diminish over time. One of the problems with the Foundation Formula was that it had been starved to death over a period of time . it was dependent on general fund revenues that were siphoned off for other purposes. Our proposal would fund the block grant using a mix of broad-base revenue sources and the current non-resident education property tax. An oft-cited complaint about the Foundation Formula was that towns with large non-residential property tax bases could spend much more than other towns, with only a negligible tax rate.
Under our proposal, every community benefits equally from non-residential property wealth, since those properties will continue to be taxed on a statewide basis, with the revenues being redistributed through the block grant.
You are in the minority, how do you expect to move this proposal forward?
Vermonters are calling for change. Act 60 and the statewide property tax are broken - we heard that loud and clear in the 2006 election. Most of us campaigned on the promise that we would deliver change.
This proposal would reduce the property tax burden, empower our local communities with real local control, simplify an incomprehensible system, and provide cost containment using carrots - not sticks.
In the coming days, weeks, and months, we will be taking this plan to the people. This proposal will only advance through grassroots support at the local level. We cannot afford to have this proposal die on a committee wall. Over the next several months, we seek to engage the Governor, legislative leaders, school boards, selectboards, and all Vermonters in this important discussion. To assist with that effort, we have developed this website. Additionally, we will be holding a series of regional forums to educate the public, answer questions, and solicit public feedback.
Why restructure special education?
We continue to hear that special education is extremely tough to control on the local level. We are asking a great deal of our elected officials to try to manage a cost that is often outside their control. These costs have to be spread across the entire system, since one or two special education students can very significantly impact a school budget and therefore impact the local tax rate . particularly when punitive spending penalties kick in.
We want to empower communities with the flexibility of local control where the locality has the ability to control spending. But we do not want to burden local communities with those costs that they have limited control over, such as special education.
What about equity? Does this plan comply with the Brigham decision?
In designing this plan, we spent more time thinking about equity and how this plan would positively or negatively impact equity. We firmly believe that this plan lives up to the promise that every Vermont child deserves an equal educational opportunity. We also believe that Act 60 has failed in that regard.
One of the fundamental flaws of Act 60 is that it focuses exclusively on the equity of dollars going in, to the exclusion of educational results coming out. It benefits large schools with economies of scale, while penalizing small communities struggling to pay for the most basic services in their schools. While Act 60 has succeeded in redistributing tax dollars, it has failed to provide a corollary equalization of educational outcomes.
Our proposal recognizes that government closest to the people governs best. We feel that local communities are best placed to understand the educational needs of their children.
Is it realistic to come up with $158M in additional revenue?
For us to move forward with a productive discussion, we must focus on the structure of the plan first. Before we can take this dialog to the next level, we all need to understand where we are and agree on where we're going. We believe that Vermonters are looking a system that provides local control, equity, simplicity, transparency, and cost containment. Assuming that we can all agree to those basic principles, we must find common ground on the fundament structure of a plan. We have outlined such a broad structure, and for illustration purposes, have set the per-pupil grant at $8,500, which is 85% of prior year average spending. Now, this number can be adjusted up or down, depending on a variety of other variables, including equity, costs savings, and availability of revenues.
How does the plan impact non-residential taxpayers?
In the bill we have 50% of the grant coming from broad-base taxes and 50% from the non-residential property taxes. The grant is set at 85% of the prior year average per-pupil spending. We believe that the non-residential rate should stabilize even in a soft real estate market. A reduction of the rate and the bill could be realized in a strong real estate market with the addition of .Sticks & Bricks.. In the long term, non-residents will benefit, since residential taxpayers will have greater visibility and control over spending that will have a direct impact on the residential rate. In other words, because there it will be easier for residential taxpayers to hold the line on spending, overall education spending should start to level off, staving off increases to the non-residential rate.
Why use actual pupil counts instead of equalized pupils?
This is an attempt to provide simplicity and greater transparency at the local level. We have all been to budget meetings where the discussion about spending breaks down over how many pupils are in a town.
What is categorical aid and why eliminate it?
This again addresses the transparency and simplicity issues that create all sorts of confusion on the local level. Many of these categorical grants are band-aids that have been slapped onto Act 60 in a vain attempt at fixing more fundamental problems.
Does this plan provide more local control than Act 60?
This is the most important single feature of LEAF. This plan returns control of education to the folks in each community. We are putting a stake in the ground and moving decisively away from the state-run education system that we have been gradually moving towards over the last decade.
What is the purpose of allowing school districts to "opt out" of their supervisory unions?
We believe that Vermonters will make good decisions given the opportunity. We think it is arrogant and condescending on the part of Vermont 's elected leaders to think we have to manage an elected board.