School Funding 2.0 Our new governor, Deval Patrick,
created a buzz about fixing the way Massachusetts pays for public schools. The only thing definite is the governor's opinion about property taxes, which was clearly articulated during the campaign, and repeated at the Mass Association of School Committees annual meeting:
"The property tax is not working."
I found a couple of analytic opinion pieces on this subject that are worth a look.
One appeared in the
Montague Reporter, entitled
Ed Reform Creates a Wrecking Ball for Local Government, by the chair of the Montague finance committee. I concur with much of this article, though I think the author's conclusion that the state's wrecking ball falls hardest on places that already receive the most state aid only captures part of the picture. A couple other points, summarized in my words; the state should assure that its contributions keep up with the real rate of ed inflation, and cost containment should be part of any reform.
Another is an
op-ed in the Boston Herald, written by Edward Moscovitch of Cape Ann Economics. I disagree with Moscovitch's headline premise - that a statewide prop tax is the solution, to raise $4.7 billion of new state funds for education. But I respect Moscovitch's credentials, as the
author of a study that I've quoted on other blogs before regarding No Child Left Behind and its impossible proficiency goals.
Moscovitch offers a statewide property tax over other taxes available at the state level as being a more effective means of raising the required revenues, offering an exemption on the first $100,000 of valuation to make the tax more progressive, and another exemption for seniors. I think this is dancing around the problem of raising taxes at the state level, and there would be just as much or more revolt against a statewide property tax as against higher income tax rates. Patrick is not likely to be seen as fixing the problem he set out to fix if he replaces local property tax revenue with local property tax revenue collected from other towns. Particularly not in places like Gloucester, with very high property values but a perception that working class incomes are not matching those valuations. I think the only thing going for a statewide property tax is that property tax revenues are more consistent from year to year than the income tax, which is more cyclical. But I think there are other ways to solve that problem.
Moscovitch also touches the subjects of the foundation budget actually reflecting education costs, and the subject of cost control:
We should change the inflation adjustment factor to reflect actual Massachusetts health care and other costs (the current factor is based on national data) and raise the foundation budget to fit more closely what schools actually spend. When the extra costs this implies become a state responsibility, there would be a stronger incentive to address the problem - certainly by making sure that teachers received their health coverage through the more efficient state plan.
My two cents on Patrick's likely direction: I suspect he wants to reevaluate the foundation budget, perhaps raising the foundation by about 10% and perhaps doing that in a way that better reflects No Child Left Behind mandates for subgroups; and he'd like to shift funding away from property taxes to state revenues. He's also said the charter school funding formula should be fixed, and presumably a comprehensive plan would include something to reduce the impact on local budgets there, as well.
As far as my advocacy, I'd like the governor to make sure the existing commitment to equalize aid and burdens, particularly for regional school members, in the form of target share reform, is completed. About 100 towns that are members of regional schools face high property tax burdens for schools primarily because of errors in the existing state formulas, and regulations that propagate those errors into regional school "required minimum" contributions. In terms of the numbers, the state can accelerate the regulatory portion of target share reform, while reducing both the short term and the long term demands on state tax revenues, by focusing effort reduction on required contributions that are truly excessive next year.
For example, if the governor's goal is to increase the foundation budget by 10%, then effort reduction could wipe out
ALL excess effort above 110% of the current target local share, in a much more cost-effective way than following next year's proposed effort reduction. And the governor would have 100 more towns where he fixed the problem of excessive property tax burdens.