"Scribblings" - An Occasional Newsletter from the Legislature
By Rep. Thomas F. Koch, Barre Town

In his inaugural address on January 8 and again in his budget address on January 22, Governor Douglas raised the issue of school budgets.  Jim Douglas is many things—stupid is not one of them.  He was well aware that he was kicking a hornet’s nest, and the educational establishment predictably swarmed all around him, stingers ready for the attack.  But what he said needed to be said, and he deserves credit for saying it.

The number one issue I heard Barre Town voters talking about as I campaigned this fall was the state of the economy.  And the number two issue was closely related—the fact that it is becoming increasingly difficult to afford to live in Vermont, with property taxes being the biggest culprit.  If we ignore either of these issues, we fail in our duty to respond to the needs of Vermonters.

What the governor pointed out was that, while the number of students in our schools has fallen by ten percent since Act 60 was enacted in 1997, school staffs have risen statewide by 22%.  Furthermore, education fund spending in fiscal year 2005 was $1,064,900,000, and for FY 2010, it is projected to be $1,385,800,00—an increase of more than $320 million—over 30 percent—in just five years.  And without any changes, there is no relief in sight.

The governor stated that "Act 60 and Act 68 are fundamentally broken and beyond repair."  He called for "a wholesale transformation" to return control to communities and to make education funding sustainable and affordable over the long term.  I wholeheartedly agree.

Act 60 was intentionally designed to be a cash cow, consistently producing revenues dedicated exclusively to supporting our schools, and it has done just that.  In years of escalating property values, Act 60 consistently generated surplus revenues, allowing the legislature to cut the statewide property tax rates nearly every year, while fully supporting school budgets and still leaving a surplus in the ed fund.  Even this year, while property values have stagnated and foreclosures have increased, the fund balance was sufficient to allow us to vote two weeks ago to reduce the tax rates once again.  While the general fund, the transportation fund, the health access fund, and the fish and wildlife funds are all running large deficits, the education fund has a surplus, and the education establishment intends to guard it jealously, because the more money there is in the fund, the more likely people will be willing to spend it in the education system.  Any effort at reform is immediately branded a "raid."

What the governor proposed is this: first, a collaborative process to bring together "thoughtful individuals with a broad range of perspectives to design an education funding system that is simple, transparent, and sustainable;" second, a freeze on per-pupil spending for the current year only, while a new funding system is put in place; third, an end to property tax subsidies (also known as "income sensitivity" or "prebates") for households earning over $75,000 per year.

That seems very reasonable to me.  But the immediate furor that arose following the governor’s proposal indicates that there is very little interest on the part of most legislators in engaging in such a "collaborative process," and I doubt that we will see any real progress in the field of education funding reform during this two-year session of the legislature.

The governor’s proposal for a per-pupil freeze on education spending may, in fact, meet with more success than originally thought, despite the howls of protest against his proposal.  That’s because school boards, and the voters who elect them, realize that continued growth in spending at recent rates is not sustainable.  Admittedly, there are problems with a spending freeze, not the least of which is that the governor proposed it just as school boards were putting the finishing touches on their budget proposals to get them on the ballot for Town Meeting Day. But that did not stop many school boards from at least trying to take up the governor’s challenge.

Here in Barre Town, the school board decided it could not recommend a level-funded budget, even though they tried.  Part of the reason is that the school board, under the leadership of its chairman, David Harrington, has previously adopted a policy on class size, which has resulted in position cuts and modest budget increases in recent years, and there is no longer much fat in the Barre Town school budget.  Similarly, the Spaulding High School board made some hard decisions, cut its budget—including a number of positions—as deeply as it thought it could prudently do, and still could not produce a level-funded budget.  But both boards honestly tried to fund education responsibly and adequately while respecting the financial capacity of the taxpayers.  These may not be zero-increase budgets, but they are good budgets, and I will be supporting both the Barre Town and the Spaulding budgets when I vote next month.

Our children are entitled to an excellent education, and we need to pay for it.  At the same time, we need to make sure that the taxpayers can afford the financial burden over time, for which we often use the shorthand terms "sustainability" and "affordability."  The governor has invited the citizenry to engage in a responsible process to develop a new system to fund public education.  It is an invitation that should be accepted, and I expect to have more to say on this subject in future issues of "Scribblings."

Every so often, one lobbying group or another issues a "scorecard" that rates the states on the issue or issues that group is interested in.  A front-page headline in Thursday’s Times Argus read "National group gives Vermont F for gun laws."

The text of the story reported that the anti-gun Brady Campaign had rated all of the states on their gun laws and found that although Vermont follows all applicable federal laws, our state does not require a permit to own a firearm, allows private sales and other transfers of firearms without a background check on the purchaser, does not prohibit carrying a concealed weapon, does not mandate the use of childproof locks on firearms, and in other ways does not conform to the Brady Campaign’s ultimate objective of eliminating private ownership of firearms.

Conveniently ignored is the fact that a number of other statistics consistently rate Vermont as a safer state in which to live than many states with gun laws that the Brady Campaign would have us adopt.  The story quoted one anti-gun crusader as being concerned that guns sold in private transactions in Vermont without background checks may end up in the hands of urban criminals in other states that do require such checks.  While it is one’s constitutional right to worry about such things, one of the problems that person faces is that there is no basis to suggest that the worrying is grounded in fact.

In all nine campaigns in which I have run for the legislature, I have consistently said that Vermont’s gun laws are working just fine, and we don’t need any new ones.  In my view, Vermont gets not an F, but an A, for its gun laws.

It all depends on who’s doing the rating.

Many social services are provided in Vermont by non-profit organizations, and many of them return to the legislature time and again to report on their activities and accomplishments, and to advise of their need for additional resources.  Many of them are funded, in whole or in part, with state (i.e., taxpayer) money, and many of them are candidates for reduction or even elimination of funding in these difficult economic times.  Some of these funding cuts are controversial, and in some instances, I have been vocal in opposing cuts to what I view as necessary and critical services.

Last week, Representative Patty O’Donnell of Vernon called a news conference to release the results of research she had done on the salaries paid to executives of a number of non-profit agencies.  Non-profits don’t pay taxes, but they do have to file IRS Form 990, which is an information form that is open to the public and can be accessed on the internet.  One of the sections of the 990 requires disclosure of compensation information for the highest-paid employees of the organization.

So how much do non-profit executives in Vermont make?  Here is some of what Rep. O’Donnell found:
 

Position	Year	Compensation
CEO, Howard Mental Health	2007	$195,312
Medical Director, Howard Mental Health	2007	125,278
Sr. V.P., Housing Vermont	2006	111,136
V.P., Housing Vermont	2006	85,728
Policy Director, Vermont Energy Investment Corp. ("Efficiency Vermont")	2007	162,748
COO, Efficiency Vermont	2007	135,137
Director of Planning, Efficiency Vermont	2007	118,638
CEO, Planned Parenthood on No. New England	2006	185,894
Staff Physician, Planned Parenthood	2006	147,729
Staff Physician, Planned Parenthood	2006	117,033
Exec. Dir., VT Superintendents Assn.	2008	122,323
Exec. Dir., Central VT Community Action	2006	117,033
Finance Dir., Central VT Community Action	2006	81,502
Pres., Vermont Land Trust	2007	106,133
Pres., Visiting Nurse Assn.of Chittenden County	2007	196,970
Exec. Dir., Committee on Temporary Shelter	2007	80,615

And this is only a part of what Rep. O’Donnell found.  Based on this information, what she proposed is that no non-profit organization that receives fifty percent or more of its funding from the taxpayers should receive funds this year unless any of its employees making more than $60,000 per year agrees to take a five percent pay cut.  In addition, she asked State Auditor Tom Salmon to conduct a comprehensive audit of non-profits to determine if there are overlapping missions that would suggest mergers, or if there are other ways to achieve efficiencies and save money.  Once again, the outcry was immediate; you’d think that she had suggested that motherhood and apple pie be outlawed!

There may be some inconsistencies in those figures; some may be base salaries while some may include retirement contributions and other fringe benefits.  But in many cases, the salaries shown above are more than the governor makes.  While nobody is saying that these non-profit organizations do not do important work, that they do not do it well, or that the people who earn these salaries do not work hard, what Rep. O’Donnell is saying is that as non-profit executives come to the statehouse opposing budget cuts, or even asking for more money, and predicting dire consequences if their requests are not granted, everything should be on the table, including the salaries of these same executives.

This is not "open season on non-profits," as some have suggested.  Nor is it a witch hunt.  But in these difficult times, it seems reasonable to ask everyone to be a part of the solution, and looking at the costs of operating the non-profit agencies that disburse public funds is a legitimate subject for consideration.