In Vermont's Schools, All Things Will Be Equal

In dramatic departure from national norm, funding will come from statewide tax, equalizing rich and poor.

The towns of Stowe and Worcester, Vt., are separated only by five miles of caramel-colored woodlands and the unimposing Mt. Worcester. But in terms of school quality and property wealth, they are worlds apart.

Stowe is a ski town full of trendy restaurants and pricey homes. Worcester is a quaint village where the dairy industry has turned sour. Stowe's schools are the envy of the state. Worcester's single school is so cramped that teachers must take troublemakers into the bathroom for a private conversation.

It was to solve these funding inequities that Vermont's Democrat-run legislature passed the nation's most sweeping school-funding reform law last spring. Saying every Vermont child has an equal right to a quality education, it replaced local property taxes for schools with a statewide tax, and forced larger towns to bear a greater burden for their poorer neighbors.

The result, Act 60, has touched off a bitter debate over fairness and the importance of local control. In boisterous town meetings and Rotary Club dinners there's the hint of a minor tax revolt brewing.

"Some towns have a tremendous amount of taxable land to support school districts, and others don't," says state Sen. Dick McCormack (D), the Democratic majority leader who pushed Act 60 through the Senate. "It lowers most people's property taxes and distributes that burden more fairly."

Taking away local control

Like most states, Vermont used to leave the funding of local schools to the towns, which tend to rely on property taxes. This system favored towns with high property values. Citizens in Stowe, for example, spent $7,100 per student, even though their property-tax rates were relatively low (71 cents for every $100 of assessed value). Worcester, on the other hand, generated only $5,700 per student, even though its tax rate was more than twice that of Stowe's.

But a state Supreme Court decision last year changed all that, and ordered the state to change its funding structure.

Vermont's legislature moved swiftly, passing a new law in less than a year. (New Jersey, by contrast, is in its 20th year of litigation over the same issue.) Under Vermont's new system, which will be fully phased in by 2001, the state will assess a tax rate ($1.10 per $100 value) statewide, with special breaks for lower-income families. Each town will receive a $5,000 per pupil block grant. Towns can raise additional funds if they wish, but richer towns can keep only a fraction of what they raise. The rest goes to less-advantaged towns.

Critics have assailed the plan as "state-controlled socialism and the redistribution of wealth," and even some citizens who stand to benefit from it retain a Yankee suspicion of any increase in state power. State officials respond that Act 60 will lower taxes for 89 percent of Vermont's taxpayers and 66 percent of school districts.

But this argument doesn't play well in the handful of "gold towns" like Stowe, Sherburne, and Woodstock. There, residents face increased taxes, shrinking school budgets, and a loss of local control.

"Most states merely raise funding for poorer towns," says Bernard Rome, a well-to-do Sherburne businessman. "Vermont went beyond that, saying every community must have equal access to funds." Noting that "the people who are being harmed by Act 60 are much more vocal and articulate than those being helped," Mr. Rome has taken this message on the road, seven days a week, to convince even those 89 percent of Vermonters who potentially face lower taxes.

At a Rotary Club dinner at Stowe's Town and Country Resort, Rome works the crowd like an old pro.

Republicans see opportunity

"It's time to throw the bums out," he says to a restive crowd of businessmen and retirees. The Green Mountain State was once as much a rock-solid Republican state as its cantankerous neighbor, New Hampshire, and if state Republicans play this issue right, Vermont may return to its roots. "Let's get rid of those legislators whose vision for Vermont's future is so different from its past," Rome says.

Of course, Rome is preaching to the choir. Stowe residents have filed two lawsuits against Act 60, and the town joined a suit led by the 48-town Coalition of Vermont Municipalities, formed this spring.

"This could be a watershed issue that says 'Wake up,' " comments John Sykas, a stockbroker who worries Act 60 will mean a lower-quality education in Stowe, where his two children go to school. "Vermont used to be a traditional conservative Republican state. Now we have Bernie Sanders [a left-leaning Independent] in Congress."

But across the mountains in Worcester, the reaction to Act 60 is more enthusiastic.

"Act 60 is a winner for ... the majority of Vermont," says Allen Gilbert, a father of two and member of Worcester's school board. High taxes and low incomes have been a way of life in Worcester, he says, but voters gladly bore the burden for the schools. "People in this town were digging much deeper into their pockets to pay for school spending than the rich towns."

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