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Published in Print: June 6, 2001, as Well-to-Do Vt. Towns Seeking Relief From School Finance Law

Well-to-Do Vt. Towns Seeking Relief From School Finance Law

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Negotiations to revise Vermont's controversial school finance law and offer an olive branch to hard-hit wealthy towns appeared to be dead late last week.

The Senate approved a plan that would give well-to-do districts more time to adjust to the law, known as Act 60, which instituted a statewide property tax and directed that the proceeds be used for education. The bill passed 24-6 on May 16 after lengthy debate and discord both from Democrats, who argued that the plan was giving too much away, and Republicans, who said it did not give enough.

But members of the House of Representatives do not appear to be interested in following the senators' footsteps, making it unlikely that significant revisions will be put into the law this year.

Lawmakers were anxious to finish business for the year last week; the legislature had initially planned to recess in April. But some senators were working with their colleagues in the House to try to find a last-minute compromise.

Vermont overhauled its school finance system in 1997, after the state supreme court found the existing system unconstitutional because of wide spending gaps between wealthy and poor districts. The legislature, controlled by Democrats, quickly replaced the local property-tax system with the statewide system.

Wealthy districts, which had enjoyed low tax rates and significant resources, were thus forced to share tax money with poor districts that, despite high tax rates, had struggled to buy textbooks and supplies.

The most debated aspect of the plan has been the "sharing pool." That provision, designed to allow well-heeled districts an outlet for spending more on schools, requires any town that chooses to raise its local taxes above the statewide rate to share a portion of those proceeds with other districts.

Under the Senate bill, the amount wealthy districts would be required to contribute would be capped for the next five years, giving the wealthy districts a short-term financial break and more time to adjust to the law, which began to take effect in late 1997. The House earlier in the session considered a measure to give much larger breaks to wealthy districts, but that plan died in committee.

The Senate measure also would give some property-tax relief to residents who own parcels of rural land, by expanding the definition of "homestead" and basing more of those residents' statewide property taxes on their income, rather than the value of the land. Many farms in the wealthy communities have been owned by the same families for several generations, but have seen their property values inflated as city dwellers bought up land for weekend getaways. Some of longtime residents have had difficulty paying the higher statewide tax.

Not Over Yet

A related plan to streamline paperwork associated with the statewide property-tax system had appeared to hold some promise of passage. And some lawmakers said that though the plan seemed unlikely to pass last week, the situation was fluid and a deal was still possible.

"The old 'It ain't over till the fat lady sings' principle is certainly true in the Vermont legislature," said Sen. Richard J. McCormack, a Democrat who voted for the Senate measure although he opposed some of its provisions.

Vermont, unlike many states where legislative sessions have a specified duration, meets until it decides business is complete. State legislators hoped to finish business by next week.

Bill Talbot, the chief of finance for the state department of education, said officials in the agency had signed off on the Senate's plan as a way to reach out to the wealthy districts. Gov. Howard Dean, a Democrat, and Commissioner of Education David S. Wolk have remained solidly behind Act 60.

"We strongly support the equity provisions of Act 60, and wouldn't support anything that would be seen as detrimental to those provisions," Mr. Talbot said, adding that "the Senate bill was acceptable."

Some of the Democrats who ultimately voted for the Republican-sponsored bill were lukewarm in their support.

"If it doesn't pass, I will not be at all unhappy," said Sen. Jean B. Ankeney, who represents Chittenden, one of the state's most populous communities and an area that would have benefited minimally from the Senate plan. She added that "the whining will go on."

Vol. 20, Issue 39, Page 17

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