Doug Hoffer has just called our attention to a very interesting issues brief from the Public Assets Institute on Vermont’s education spending that dispels some of the misconceptions being promoted by Republican partisans in the current election cycle to justify Dubie’s ham-handed “plan” for education cuts. Perhaps most immediately compelling is how the issues brief illustrates the lie in Dubie’s oft-repeated distortion of Vermont’s property tax relative to other states. We are reminded that, unlike most other states, some school funding is a component of property tax in Vermont; and that upper income Vermonters still contribute the smallest amount, as percentage of income, for public education. While Act 68 has significantly reduced the burden on middle income residents by tying their contribution to income rather than property value, Mr. Dubie’s favorite sector, the rich (whom he favors making even richer through tax breaks) still make-out like bandits when it comes to their relative contribution to public education.
And what about the claim that education costs in Vermont are “sky-rocketing?” Not true, says the PAI; much of the increase in school spending in recent years, as in many business sectors, has been due to the significant increase in health care costs. This is a fact that Peter Shumlin has been trying to drive home to the electorate in his pledge to achieve an equitable and affordable healthcare system for Vermont. Furthermore, says PAI:
The growth in education spending has been declining since 2005. There was an anomalous bump in fiscal 2009, following passage of legislation that required voters in school districts with high spending growth to vote twice on the school budget. Districts anticipating that they might be subject to the two-vote requirement in fiscal 2010 may have moved certain purchases to fiscal 2009 to keep their 2010 growth below the threshold. In fiscal 2011 spending was actually lower than the previous year.*
Finally, the issues brief offers the long view that investments by the community in education strengthen the economy:
The benefits include higher personal income, employment, and tax collections and reduced crime and welfare dependence. Because education is labor intensive, such spending creates more jobs per dollar than many other sectors. The jobs resulting are direct (teachers and school staff) and also indirect (e.g., electricians who wire the school) and induced (workers at the market where school staff buy groceries).
These are commonsense arguments. The Public Assets Institute has provided simple graphics reflecting the statistical evidence supporting the arguments. Why isn’t this front page news in the Free Press?
I left it in the quote even though it sounds a little strange as 2011 has not yet happened. I thought I’d leave explanation to someone more versed in the budget calendar.
Thanks for linking to this interesting study.
But let’s take it one step further.
Average household size in Vermont is 2.44.
Health care cost per capita in 2009 was about $7,859 (according to legislative council).
Average household health care cost = 2.44 x 7859 = $19,176.
So, looking at the “Homestead School Taxes as a Percent of Income” chart from PAI and adding a column for medical “tax” we have the following:
Homestead Health care
School tax “tax”
as % of income as % of income
$25-$50 K 2.7% 77% – 38% avg 57.5%
$50-$75 K 2.8% 38% – 26% avg 32%
$75-$100K 2.9% 38% – 19% avg 29%
$200-$300K 2.1% 10% – 6% avg 8%
$500K – 1 million 1.0% 4% – 2% avg 3%
No wonder there is such opposition to single payer from those benefiting the most from the current system.
And, because most don’t write a check for the health care “tax” and they do for their property tax, the public discourse about the rise and cost of taxes is severely misplaced.
Because education is labor intensive, such spending creates more jobs per dollar than many other sectors.
In the Franklin-2 candidate forum taped last week (airing this week), Lynn Dickinson brought up the labor intensive nature of education (and compared it to healthcare!) as a reason we need to cut education and create more private sector jobs. Oy.
Sadly, I didn’t have a chance to rebut. Or rather, the moderator had moved on to another topic, and I didn’t think to revisit the education issue. My bad.