Vermont lawmaker says spending cap fix best for taxpayers - Watchdog.org
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Vermont lawmaker says spending cap fix best for taxpayers

By   /   January 27, 2016  /   News  /   No Comments

Photo courtesy of state of Vermont

HOLD HARMLESS: Vermont state Rep. Paul Dame, R-Essex Junction, says school districts should be held harmless against the Agency of Education’s spending threshold miscalculation.

On Wednesday, lawmakers will weigh changes to Vermont’s education spending caps after the Agency of Education sent the wrong spending limits to districts.

The rush to amend the 2 percent statewide cap comes after officials from the Agency of Education miscalculated the allowable growth rate for individual school districts. Under Act 46, districts that spend too much face a double tax on every dollar above their threshold.

Changes under consideration in the House include raising the threshold by 0.9 percent, reducing the dollar-for-dollar tax penalty to 25 cents per dollar of overspending, and holding harmless districts forced above their limit due to the agency’s mistake.

In this interview with Vermont Watchdog, state Rep. Paul Dame, R-Essex Junction, says his “hold harmless” solution is the best for taxpayers.

Vermont Watchdog: What does your amendment do to address the current spending cap confusion?

Dame: My amendment allows schools to use whichever calculation is more advantageous: the one the Legislature originally put in, or the one that every school board in the state was operating under until a couple weeks ago.

VW: How are school districts being affected by the AOE’s mistake?

Dame: Some schools were going to be in a position where they had to make a last-minute change of substance. In my district, they were talking about cutting $144,000 if they wanted to get under the cap under the new calculation. Under the old calculation, we were right at the spending threshold. But because we paid off a bond, that didn’t factor in under the previous calculation — but with the new interpretation it totally changed everything for us. If our school wanted to avoid the penalty, we were going to have to cut $144,000 on two weeks’ notice. And the only way to really do that is you got to lay somebody off.

VW: Can administrators make such decisions given the end-of-month deadline and uncertainty about their allowable spending?

Dame: It’s hard for our school board to make that decision. Do we cut somebody so we stay under the threshold, not knowing if our interpretation is correct? If there is broad consensus that lawmakers want to hold school boards harmless, then we just cut somebody for no reason. No school board wants to be in that position.

VW: Do lawmakers know the tax implications for each of the proposed fixes?

Dame: It’s a question the Joint Fiscal Office has backed off of answering. What I heard is they weren’t comfortable putting anything out because it’s dependent on what school budgets are, and since they’re not finalized yet, it’s a lot of guesswork.

VW: Did you get any rough estimates?

Dame: I don’t have solid numbers, but last week these were the numbers thrown around: My fix was probably going to cost maybe $1 million on a $1.3 billion education fund — so pretty minor. I believe the 0.9 percent increase was going to be somewhere around $5 million.

VW: Of the three fixes the House is considering, which one do you think solves the problem at the least cost to taxpayers?

Dame: My fix puts the least upward pressure on property taxes. Compared to the others, it’s definitely the cheapest, and to me it’s the fairest because the people who are helped by my amendment are people who are trying to follow the rules. The 0.9 increase and the penalty reduction from 100 percent to 25 percent only help people who intentionally went over the cap.

VW: The Republican House Caucus put your amendment to a vote on the floor last Friday as a stand-alone amendment and it was voted down. Why did you make that move?

Dame: Our caucus met and decided to try to pull the bill out of committee and vote on it Friday to tell school boards we were not going to send them into the weekend a second time with zero clarity about what was going to happen. So, our vote was to pass at least the AOE fix and then let the Education Committee do whatever they were going to do (with the other amendments).

VW: Were you surprised your amendment failed in the full House after getting unanimous approval by the House Education Committee earlier in the week?

Dame: We had unanimous support among Republicans and Independents, but the Democrats and Progressives lined up against it. In some of the vote explanations they said, “You know, this is against the process.”

What some people are telling me is that because it was my bill and a Republican move, they didn’t want us getting credit for it. So they took an additional recess from the House so that the Education Committee could meet and pass out their own version of the bill.

VW: Does the issue need to be fixed immediately, or can the Legislature wait to see what school districts do with their budgets?

Dame: If the Education Committee said let’s wait until Feb. 2 when everybody has to submit their preliminary budget, then schools have to submit a budget not knowing if the rules they were operating under through Jan. 14th were true or not.

VW: Since the House is considering amendments to a Senate bill that repeals the caps altogether (S.233), do you think the option to repeal the caps is dead in the House?

Dame: I think the way, structurally, everything’s set up, there’s no way they’re going to get full repeal.

VW: Do you still want the House to vote separately on your amendment since it appears to have stronger support than the other proposed fixes?

Dame: After their bill was in the clerk’s office Friday afternoon before close, I amended their amendment to basically strike out their amendment and do only the AOE fix. So, if my amendment passes, it will be the same thing we were voting on Friday, which is to fix the interpretation of the calculation and do nothing else. So, on Wednesday we’re going to vote first on the question of do we want to do the AOE fix and nothing else.

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Bruce Parker is a reporter and editor for Watchdog.org. His stories have been featured at FoxNews.com, Bloomberg, Politico, The Daily Caller, the Washington Times, Human Events and Thomson, among other outlets. He can be reached at [email protected]