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Monday March 6, 2006

Town budgets

(HOST) Voting on your school budget at town meeting is never easy. Commentator Allen Gilbert - who serves on his local high school board - looks at budgets from a board member's perspective.

(GILBERT) Defending a school budget in front of town meeting is like taking a college exam. You have to be prepared for everything.

The toughest task, though, is dealing with misperceptions. School budgets are big targets for voters and politicians.

In an effort to promote honest dialogue at town meeting, let me offer some myths and realities about school finances.

The first myth is that property taxes are unfair because they're NOT based on ability to pay. This is true in other states, but it's not true in Vermont. During the education finance reforms of the 1990s, Vermont lawmakers found a way to tie school taxes to income. "Prebates" and "rebates" allow seventy percent of Vermonters to pay according to income, based on figures in a legislative study. The other thirty percent are exempt because their incomes are deemed too high. So why do we keep calling school taxes "property taxes?" It's only because politicians have an aversion to the term "income tax." It's seen as anti-business.

The second myth about Vermont school taxes is that if the value of your home rises you'll automatically pay more in taxes. That's false for the 70% of Vermonters eligible for prebates or rebates. These offsets keep your final tax bill down. It's only higher-income families, and second homeowners, who automatically pay more when home values rise. Taxes for everyone else are tied to income.

Myth number 3 - Since school taxes are capped according to a percentage of your income, you can vote for higher and higher school budgets and not pay a dime more. That's false. School taxes ARE tied to a percentage of your income, but the cap rises if your town boosts school spending above the state block grant level. There is no free ride.

Myth 4 - Increases in your school's budget determine how much your taxes rise. False again. Your taxes go up (or down) depending on how much your town spends PER PUPIL. Fiscal conservatives have insisted on this mechanism as a way to check school spending.

Myth number 5 - School tax increases are smothering Vermont businesses. Not true. Businesses, and all other nonresidential property - including second homes - pay a fixed statewide rate. The rate doesn't rise as school spending increases. Businesses don't pay more when a school's heating bill skyrockets, or when special education expenses increase.

And finally, a perception that isn't a myth but deserves some explanation. Vermont spends more on its schools than many other states. That's true, but there's a good reason. We're a rural state, and our infrastructure costs are high. Our small towns can't take advantage of economies of scale. Things could be much worse, though. Our highway spending is nearly three times more out of kilter than our school spending. It's the same problem. We're a rural state, and a mile of road costs a lot more here than in Florida.

Ask good questions at your town meeting, but be kind to your school board members. They're your neighbors.

This is Allen Gilbert.

Allen Gilbert is a former journalist, teacher, and consultant currently serving as executive director of the ACLU of Vermont. He has a longtime interest in public policy issues.

For more on Town Meeting, be sure to look for VPR's one-hour special, "First Tuesday in March" online at VPR.net.



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