Study says state failed on Education Fund financial commitment

01/24/07 12:00AM By Bob Kinzel
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(Host) According to a new study, the state of Vermont has failed to meet its full financial commitment to the Education Fund for the past two years.

It's estimated that Vermont's statewide property tax rate for education could be cut by roughly 4% if the state reimburses the Education Fund.

However some key lawmakers say it will be very difficult to make up for the shortfall.

VPR's Bob Kinzel reports.


(Kinzel) When the Legislature passed Act 68 several years ago, it included a provision in the law that requires the state's contribution from the General Fund to the Education Fund to match the growth rate of the overall state budget.

According to an analysis conducted by the Legislature's Joint Fiscal Office, this requirement hasn't been followed for the past two years. It's a situation that has shortchanged the Education Fund by about $25 million.

Londonderry Rep. Rick Hube says the underpayment has resulted in higher property tax burdens across the state:

(Hube) "Twenty-five million dollars is a lot of money - 3 cents on the tax rate. It's more than 3% on the residential rates. So I'd say it's significant. Twenty-five million dollars is a lot of money where I come from."

(Kinzel) Senate Appropriations Chairwoman Susan Bartlett says the under-funding was not intentional and she notes that the General Fund does pay for some other education programs like teacher retirement and some school construction projects.

Bartlett says the only way to allocate the missing $25 million to the Education Fund is by cutting other state programs:

(Bartlett) "People keep running to the General Fund for more and more money. Well, the money just simply isn't there. And I think the budgeting process is all about making choices. So do you want to put no money in travel and tourism? Do you want to put no money in economic development? Do you want to take $20 million out of the Agency of Natural Resources? I understand the arguments I'm just - OK, the pie is one size and I can cut into as many slices as you want. But I can only cut the piece."

(Kinzel) Steve Jeffrey is the director of the Vermont League of Cities and Towns. He says it's unfair to use the statewide education property tax to pay for General Fund programs:

(Jeffrey) "Apparently they are OK with local property taxes going up and ignoring the state law. So I believe that the Legislature and Governor when he signed Act 68 agreed that this is what the General Fund contribution to funding education is supposed to be and they should live by the laws that they adopt."

(Kinzel) In the next few weeks, lawmakers will consider this year's Budget Adjustment Act. Rep. Hube says he plans to offer an amendment to the bill restoring the $25 million to the Education Fund.

Hube acknowledges he faces an uphill battle to win approval for this plan because of other pressures on the state budget.

For Vermont Public Radio I'm Bob Kinzel in Montpelier.
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