first_imgVermont Business Magazine Joined by Tax Commissioner Mary Peterson and Education Secretary Rebecca Holcombe, as well as leadership from the Vermont School Boards Association and Vermont Superintendents Association, Governor Peter Shumlin today addressed the issue of property taxes and released his administration’s annual projections for school spending and statewide property tax rates for next fiscal year, FY 2016. According to Commissioner Peterson’s statutorily required annual report to the Legislature, school spending is projected to increase by 3.09 percent for FY 16, requiring a $0.02 increase in both the residential and non-residential statewide property tax rates. That’s compared to rate increases of $0.04 in residential and $0.075 in non-residential for FY 15 rates.Peterson’s report notes that part of the reason the projected tax increase is lower this coming year than the past few years is a slight rise in overall property values in Vermont. “The statewide grand list is projected to increase slightly, up roughly 0.3 percent, in value from FY 15,” she said. “An increase in value, even slight, is a welcome change from the decreases over the past several years that exacerbated the pressure on the property tax rate and reflected the effects of the Great Recession.”“Getting public education right by improving the quality of education for all of our kids, while finding ways to reduce overall school spending is incredibly important,” Shumlin said. “While this year’s projected increase is half of last year’s, that’s no comfort for Vermonters who have seen rising property taxes year after year. Addressing education spending while improving our good public education system is a complex problem that is much broader than rising property taxes.”The Governor noted that other sources of state revenue also contribute significantly to public education. In fact, about 30 percent of all General Fund revenue raised goes towards education spending. Put another way, the governor said, “For every dollar in General Fund revenue the state takes in, 30 cents goes to fund education. And that’s not even including the money collected from property taxes.”The Sales & Use tax, for instance, has been an imporant source of funding, which has helped keep those other sources ahead of fiscal year expectations. Meanwhile, the vital Personal Income Tax has been below targets since the fiscal year started July 1, resulting in the administration twice cutting General Fund spending nearly $50 million.Shumlin Administration directs $17 million in spending reductions to ensure balanced budgetThe governor outlined a number of other types of revenue streams that many Vermonters might not realize fund education, including:•       Income tax. About two thirds of Vermonters pay for education based on their income, rather than the value of their property, because of income sensitivity in our property tax laws. But even for those Vermonters who are not income sensitized, a significant portion of their income taxes go to fund education spending.•       Sales tax. About one third of all sales tax collected in FY 14 went to fund education spending. Put another way, for every dollar in sales tax that a Vermonter paid, 35 cents went to fund education spending.•       Vehicle purchase and use tax. For those Vermonters who bought a car, one third of the purchase and use tax collected on the sale of those vehicles, about $30.6 million, also went to education.•       Every cent of the over $20 million in statewide lottery proceeds went to fund education this year.“The bottom line is that education spending in Vermont is supported by a wide variety of state revenue sources, not just the property tax,” Shumlin said. “That’s why I do not think simply shifting more education spending to other sources will address the burden Vermonters feel. We need to tackle this first as a spending challenge because education costs have continued to rise faster than Vermonter’s ability to pay for it, even though our student count has declined.”Pledging to work together with local communities and school boards, the Governor announced a number of steps his administration is taking to reduce burdens on local districts, including a proposed moratorium on new legislation that adds costs to districts. The Governor also pledged to work closely with legislators planning to address public education and tax relief this session.In addition, last summer Gov. Shumlin requested that Education Secretary Holcombe lead a state partnership with local communities and school districts to provide data designed to help with local spending decisions. Holcombe outlined the steps she is taking at Gov. Shumlin’s request to work with school districts as they prepare budgets for local approval, including:•       Clarifying some of the demographic and fiscal challenges facing different regions of the state;•       Identifying and sharing strategies different boards have developed to address these challenges;•       Providing support for districts that are exploring options for creating rich and deep educational opportunities at a more affordable price, including through greater scale;•       Compiling staffing and retirement data that Boards can use to assess their own teacher-to-student ratios and manage staffing costs;•       Working with selected districts to pilot initiatives that are expected to lead to reductions in referrals for special education services; and•       Collaborate with the Agency of Human Services to see if colocation of services to children and families might support better outcomes at a lower total cost.The Governor said he is heartened by the early success of this collaborative work, even though the challenges ahead are great.“We need to all work together to focus our reform efforts on creating a 21st century school system in Vermont, one that delivers high quality education for our children more efficiently,” Gov. Shumlin said “We can maximize the dollars we spend and achieve better outcomes for our kids.”Source: Governor’s office 12.1.2014last_img