School & Municipal Leadership Conference Aug., 14, 2014

Good morning. I’m here because I served on the Blue Ribbon Legislative Tax Commission several years back. I now know that “Blue Ribbon” means thank you for your service, we’ll think about it. I don’t believe any of our substantive suggestions for improving the tax code have been implemented. We weren’t asked to raise or lower taxes. That’s the job of the legislative branch, we were asked only to improve the code consistent with a range of attributes generally agreed to be positive. The three of us, myself, Kathy Hoyt and Bill Sayre, represented a broad range of political views and, with the exception of recommending some extensions to the sales tax to include services that would not be assessed against business, there was little disagreement among us about our recommendations.

Our task was divided into two parts. The first having to do with the full range of taxes except for property tax. The second phase of our work was to reconsider the property tax as a funding mechanism for public education. When we completed the first task, the legislature was so happy with our work, they cancelled phase two and awarded the same task to a California consultant for slightly under half a million dollars.

So, not having done the homework on property tax, take my comments with a grain of salt.

The headlines in this discussion are educational cost, quality or outcomes and the burden of a property tax. We seem to need to reduce complex problems to soundbytes and whip up short, pithy statements to offer up. What most of you understand is that so many of the seemingly intractable problems we face are nuanced and complex and cannot be reduced to headlines.

The cost of education is comprised of three elements: those that contribute directly to educational quality like teacher cost and accountability, educational tools such as libraries, digital networks, labs, and athletic facilities.

Then there are infrastructure costs: energy, insurance, healthcare, transportation, security, cafeterias, infrastructure maintenance, and capital project amortization.

Then there are increasingly evident amenity costs like student lounges, specialty sports gear and essential non-essentials. These complicate college finance more than El-Hi finance.

We like to measure overall cost against the first, however – perceived quality – but to do so without breaking out real costs is meaningless. Energy costs impact the cost of education but not its quality.

I remember being asked what I remember of my own education which ran the gamut from grade school in the same grade school building in Morrisville that serves today and Phillips Exeter with all its amenities. I remember about 5-6 people who changed my life. I don’t remember infrastructure.

In our efforts to simplify complex issues, we also tend to polarize arguments, in this case, blaming public education for property tax hikes. We need scapegoats but what matters here is what is contributing to cost that does not contribute to mission.

I believe the most productive areas to pursue are governance and infrastructure.

In governance, you know the numbers. Even though our State student population is roughly that that of a large suburban school district, our schools are managed as 277 school districts with 282 school boards governed by 62 supervisory unions. There’s been no recognition of socio-economic and technical change in school governance and Vermont’s community culture since 1892. It’s time to make changes. It’s also time for a statewide teachers’ contract to enhance negotiating leverage and teacher accountability.

I believe the argument for local schools is age-specific. Since we’re not going to support parents financially for parenting as they do in several European countries and since most families are now dependent on two incomes to maintain a home, public school access should be optional at early ages and mandatory by age four when kids are deep into learning. Pre-school to grade four should be in the heart of the community, no matter how small. Middle and high schools should be regional; colleges as far from home as possible.

In the non-profit sector we don’t always hire as well as well as we might. Strong accountable leadership and experienced management must be constantly measuring mission quality and cost to determine value in a $1.3B dollar enterprise.

Infrastructure cost is critical and comprises a significant amount of educational cost. Remember, too, that property taxes are comprised of the roughly 70:30 ratio of education to municipal costs. The little Town of Andover Vermont separates them on two sheets and mails them out separately in contravention of Vermont administrative statute to further clarify to property owners what comprises their property tax cost. Nice idea, but it only highlights a missed opportunity.

Our student population is shrinking while school budgets are stable to growing. We must learnt to get smaller, and find ways to enhance mission and reduce costs.

I’ve lived in small Vermont towns since 1947, attended town meetings and watched town fathers advocate for new police headquarters, fire houses, town halls, EMT facilities, town sheds, elementary schools, community centers – each its own fiefdom.

Imagine instead a single, centrally-heated community center that encompasses the community services needed by a town of under 5000 people, of which there are well over 200 in Vermont. The building would be optimized for energy-efficiency, shared overheads and multi-use, and would be open and in use 24/7 instead of lying fallow and expensive for much of the day and year.

It would have a “town services façade” and an opposing “community center” façade to isolate emergency vehicle traffic from the playground, farmer’s markets, community gardens, library and commons. Administrative overheads like phones, networks, security, and office equipment would be shared instead of duplicated. A smart grid would parse energy, lights and heat round the clock as needed.

Classrooms would be community rooms in the evening for zoning, design review, select board and other meetings. This could be adjacent to or integral with the community pre-school and primary school. Students would see how town government and infrastructure work, an onsite laboratory for learning civics. The auditorium would be designed for: school assemblies, town meetings, community theater and arts performances; the gym for: phys ed., games, and community yoga classes.

Of greatest benefit, however, would be the significant reduction in a town’s budget by creating and using an energy efficient cluster of shared community spaces throughout the days and seasons – a town hall for the next century.

By way of example, one must ask “Does the greater Burlington area, from Milton to Richmond and Charlotte really need ten police, fire and rescue departments?”

The citizen who questions fire, rescue, and police budget, requests for new town trucks, or buildings is unpatriotic. There’s an old joke that goes… you don’t oppose fire department requests unless you live in a stone house.

By my count, including campus security, there are upwards of twelve law enforcement agencies within a twelve mile radius of downtown Burlington. There are roughly ten fire departments and a similar number of stand-alone or integrated EMT services. Statewide, there are more than sixty distinct law enforcement authorities such as the State Police. That’s not counting local police departments. Meanwhile the violent crime rate has held steady, averaging about 750 incidents a year since 1975. According to official crime reports, there have been fewer than ten murders a year in Vermont for the last three years, and according to FEMA, the average number of residential fires has been declining for some time.

It’s questionable whether each town needs its own exclusive management hierarchy, communications system, fleet of squad cars, ladder and heavy rescue trucks, and holding facilities. It’s akin to the question of whether we need sixty plus school superintendencies in a state with 85,000 students. Police, fire and EMT services are pillars of our small local communities and must remain so in rural areas, but their infrastructure should be efficient and integrated.

Questioning duplicative investment has nothing to do with the critical value of the services, themselves. If we have a heart attack, a break-in or a fire, we all want rapid response. The duplication of services question, similar tothose being asked in health care, education and social services, addresses cost-efficiency not value. We are great at growing but can’t imagine right-sizing. In business, this behavior would wipe them out.

As resources diminish and populations stabilize, we will need to waste less energy debating our tax burden and size of government, and spend more time on achieving – and measuring improved results in education, health care, social services and even public safety, with the resources we have or the declining resources we may have in the future.

I’ll finish with this brief interview question with noted actor, Stellan Skarsgaard, only to highlight a differing viewpoint:

Mr. Skarsgård, where do you live?

I live in Sweden because the taxes are higher, nobody is starving, good health care, free schools and universities. It’s a civilized country and I like that.

You prefer paying higher taxes?

Of course. If you make a lot of money like I do you should pay higher taxes. Everybody should have the possibility to go to school, and university, and have good healthcare.


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