GOVERNOR PHIL SCOTT DISCUSSES FIVE-YEAR EDUCATION REVITALIZATION AND TAX STABILIZATION PLAN

04 May 2018

Montpelier, Vt. –  At his weekly press conference Thursday, Governor Phil Scott highlighted his five-year plan designed to increase the efficiency of Vermont’s education system, which will direct more resources to educational opportunities while also preventing a $58 million property tax increase, reversing the State’s chronic deficits in the Education Fund, and keeping education tax rates level for five years.

Scott has highlighted that with a student enrollment that’s declined by nearly 30,000 in twenty years, and expected to decline by another 7,000 by 2026, inefficiencies in an outsized system have diverted resources from students and become unaffordable and unsustainable for taxpayers.

Below is a full transcript of his address.

Governor Scott: Before I get into a discussion about my five-year education and tax stabilization plan, I want to just quickly remind folks that – despite this tension – there is still a lot of good going on here in Montpelier.

I signed a bipartisan bill yesterday that makes it easier for members of our armed services to enter civilian workforce through changes to our licensing policies. This gives Vermont a major advantage in recruiting working-age retired veterans to our state and will help with our workforce challenges. There is a pay equity bill coming to me that will also help strengthen our workforce.

We’ve come together on school safety with the bills already passed, $5 million in school safety grants moving forward in the Legislature, and our unified response to improve our criminal laws.

And, despite our broader budget discussions, we have an incredibly strong capital budget that’s going to benefit the state in a variety of areas.

We have some differences to be worked out, but there is still good work and progress being made.

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That brings me to my five-year plan to stabilize tax rates while increasing efficiency of our education system, so we can ensure more dollars go to educational opportunities.

We’ve known about a potential statewide property tax rate increase since last spring when we failed to make policy reforms to sustain strong investments in education. I’ve been clear I can’t support this because I don’t believe Vermonters can afford it.

As a result, my Administration presented 18 ideas in January, giving the Legislature lots of room to move and asking them to work with us to build consensus around a package we could all support, ensuring Vermonters didn’t see a property tax hike, and making meaningful improvements in the efficiency of our education system.

I appreciate the work of Committees to look at some of these ideas throughout the session, including a more effective system for special education funding, as well as a statewide health benefit for school employees. As we have now seen, failure to come to agreement with me on this last year has resulted in some harmful consequences for taxpayers and teachers

However, since presenting these ideas in January, we have not heard anything back in terms of consensus around a larger package. And despite the good work of the school boards—and I want to repeat this: School boards did their part—Vermonters still face a nearly $60 million education tax hike.

So, as a result, my Administration has introduced a package—a roadmap, really—to not only close this year’s deficit without a property tax rate increase, but to reverse the perennial deficit we face in the Education Fund—a deficit that, until last year, is typically filled by raising property tax rates— even as we’ve lost nearly 30,000 students in 20 years. 

This five-year plan uses ideas from the Administration, Legislature and education stakeholders, and incorporates feedback we’ve heard over the last two years, including from my December Education Summit.

It also works to fulfill the objectives laid out in Act 46, which in section 2, states one of the goals of the law is to, and I quote, “maximize operational efficiencies through increased flexibility to manage, share and transfer resources with a goal of increasing the district-level ratio of students to full-time equivalent staff….”

Since Act 46 passed, however, we’ve lost about 2,000 students, while education costs have grown by more than $60 million. Clearly the trends are going in opposite directions and are expected to continue if we don’t act.

What these trends show is that our increased spending isn’t being directed to our kids.

Aiming to address an inefficient education infrastructure that’s diverting resources from kids and is unaffordable for taxpayers, we’ve developed a plan to accomplish the following:

  • Close the FY19 Education Fund gap and address future deficits;
  • Stabilize statewide property tax rates for five years;
  • Fully fund the school budgets local voters have approved for next year;
  • Generate nearly $300 million in total savings over five years, which can be reinvested in cradle-to-career educational opportunities;
  • Allow education spending to grow sustainably each year—based on the average projected increase in grand list value of 3.25% each year—without raising property tax rates; and
  • Set Vermont on a stable and predictable five-year path, allowing local school districts to take full advantage of the governance changes made under Act 46. 

I appreciate that some legislators have expressed a willingness to work with us. Just last Thursday, Senate leadership sent me a letter saying they looked forward to working with me on a plan—although that willingness seems to have changed in recent days. 

So, I want to be clear about a few things:

First, this five-year plan is not just about preventing a nearly $60 million property tax increase this year, which is important in and of itself.

But, it’s designed to reverse the state’s chronic deficits in the Education Fund, consistently grow investments in education each year, and keep education tax rates level for five years.

Further, it generates nearly $300 million over five years that can be reinvested into initiatives such as early care and learning, K-12, tech ed, higher education and lower taxes. And it does this while funding taxpayer-approved budgets this year.

What it does not do is deplete reserves—period. It also does not force layoffs. Of the vacancies expected to occur naturally over the next five years, it simply calls for schools to, on average, only fill 4 out of 5 of those vacancies.

Next, I think it’s important to note: There are only two possible outcomes for Vermonters right now.

We can work together in Montpelier on a plan to prevent a property tax rate increase while introducing long-term stability to the system. Or, we can burden Vermonters with a $60 million education tax increase and continue to be in this position year-after-year.

And I’ve been clear since December: I will not accept a statewide property tax rate increase because Vermonters cannot afford it, and it would not responsibly address our annual challenge.

It’s essential we move forward together to prevent this property tax rate increase this year, address reoccurring deficits in the Education Fund, and generate savings to provide more and better educational options for kids and lower tax rates.

I know tensions are high right now, but I believe if my colleagues in the Legislature step back and have an open mind—and look and listen to what we proposed—they’ll see these are ideas where there has been consensus in the past, and this is a good and necessary plan of action.

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Contact Information

Office of Governor Phil Scott
109 State Street, Pavilion
Montpelier, VT 05609
Phone: 802 828-3333 (TTY: 800 649-6825)
Fax: 802 828-3339

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