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Some meaningful ways to cut ed costs

By William J. Mathis

Posted April 12, 2007

Like two warships, our state Legislature and administration fire political broadsides at each other about “containing education costs.” Disoriented by their own fog, focused on outmaneuvering each other, they have lost sight of their destination.

Meanwhile, school tax burdens have dropped from 5.4 to 4.6 percent of income in the last decade and local school budget increases have steadily declined across the past four years.

In political posturing, proclamations about spending caps, super-majorities to protect the citizens from themselves, consolidation dictated from Montpelier, and an increase in bureaucracy are offered as if these illusions were solutions.

Called on my claim to come up with a half-dozen realistic and meaningful ways to reduce education costs, here’s my list.

“Go where the money is.” Representing about 53 percent of school spending, teacher salaries are the single biggest cost. Although the total number of personnel has gone down this year (a little noted fact), much of the lag between student and staffing declines is due to the age-bulge in the teaching force. Many are in their fifties and cannot afford to retire. Local boards are loathe to fire long-time dedicated employees. Actuarially, a simple retirement bonus coupled with continuation of health care would pay for itself in two years, and the savings would continue indefinitely. If a $60,000 salary was replaced with a $30,000 salary, the savings are obvious. If a teaching position was not replaced, then the savings are complete.

Universal health care. Health insurance premiums go up for many reasons including the costs of non-insured or underinsured people. These costs are driven back into staggering insurance increases paid by school districts and employers. Thus, we have an uncontrolled hidden tax. For schools, municipalities, and employers, health insurance is the most explosive cost factor.

Special education. This mandate takes about 18 percent of the local school tax dollar. The bureaucracy associated with special education is onerous, expensive, and irrational. Ironically, the current proposal to control these costs adds more bureaucracy.

Instead, let’s simply block grant the money and eliminate the bureaucracy. A mind-numbing thicket of forms, auditors, monitors, rules, bill-backs, etc. at the state and local levels can simply be eliminated with no harm to children. Locals, who cannot use special education staff to meet the needs of all children, could use staff in a flexible and cost-efficient way. The state would still co-pay for very high cost students in our mutual “insurance” system.

Federal mandates. The House Ways and Means Committee under former Rep. Richard Marron, R-Stowe, commissioned the National Conference of State Legislatures to do an independent study of the costs to provide an “adequate” education — the same requirement as the federal No Child Left Behind Act. They found it will add 20 percent to budgets. Using the Lake Champlain Chamber of Commerce’s figures, that’s about $252 million. The governor and commissioner shrug off these costs saying that we cannot afford to lose the federal $50 to $100 million (depending on what’s counted) by turning down the program. Do the math. Silently, these costs are now oozing into your school budgets and, like crabgrass, they squeeze out other programs.

The common level of appraisal (CLA). This 1960s system is not an education cost nor an Act 60 or 68 product. It is a tax equity mechanism. The political effect, however, is to wrongly exaggerate school spending. Even though taxpayers get much of their money back in the new tax credit system, they often get a shock when they open their tax bill. To give the citizen an honest picture of their school taxes, CLA adjustments should be made to the grand list value of the property — not to the education tax bill. This is not a true education savings, but it would be a victory for transparent government.

“Leave it Alone!” The percent increase in budgets has dropped steadily for the last four years without any help from the governor’s proposed caps. (If caps become enacted, some politician will claim credit for what happened naturally.) The number of overall employees is declining as the natural lag from declining enrollments self-corrects. Likewise, as property markets cool, the CLA also self-corrects.
Ironically, the largest proportionate staff increases have been in the number of clerks. These people fill out forms and respond to the 410 memos the state sent locals last year. Yet, the state’s solution imposes even more bureaucracy on local and state agencies. More bureaucracy simply begets higher costs and an even more inflexible system.

The bonus: “Eliminate the mandates.” Alas, our lawmakers continue to pass new laws requiring costly new services (lunches, bullying, air quality, emergency drills, testing, health, special education, etc.) and then blame the locals for not containing costs. The state proposes to “study” this problem. It takes little study to understand that if our legislatures cannot control themselves, their quest for containing local school costs is an illusion.

With 93 percent of school budgets passing, budget increases declining, and tax burdens dropping, it is not clear what “crisis” state government is trying to solve. Nevertheless, controlling costs in all aspects of government is vital. Unfortunately, the current Montpelier proposals make the problems worse. Sadly, they fail, almost entirely, to address the real cost problems.

William J. Mathis teaches education finance at the University of Vermont and is the superintendent of Rutland Northeast Supervisory Union in Brandon.