Money, Mandates, and Local Control in American Public Education

4. Sharks and Wolverines : The Effect of School Finance Centralization in Vermont and Michigan

—chapter four— Sharks and Wolverines The Effect of School Finance Centralization in Vermont and Michigan Q Q Q “A small town is like a big family.” Wall hanging at Blanche and Bill’s Pancake House, Bridgewater Corners, Vermont the results of chapter 3 may indicate that a state’s finance share has no effect on its level of regulation but cannot speak to whether state finance share undercuts local governments’ ability to undertake independent actions —that is, on their level of positive local autonomy. A strong local government is not just free from restriction. Its leaders must also feel empowered to act, to diagnose and fix problems in their community. Fully understanding whether finance centralization harms local control in the 20–90 range requires examining whether local actors seem less able to act independent of state government in a system of relatively higher financing. This chapter presents results of case studies of finance reform movements in Vermont and Michigan. During the 1990s, both states embarked on remarkable and extensive school finance centralizations, albeit under radically different conditions. These two very different states had very different school finance reform movements, yet finance centralization had similar effects on local control. The aggregate data necessary to understand all of what local school boards do are not available, requiring us 47 to venture into the messy, idiosyncratic, and utterly wonderful world of local school politics. School Finance in Vermont “In Vermont, local control is as much a part of life as maple syrup and country stores.” Joetta L. Sack Prior to the 1990s, public schools in Vermont were as dependent on local sources of funding as almost any state in the Union. During the second half of the twentieth century, the state share of the school finance burden hovered between 20 and 30 percent of total education spending, with the vast majority of the remainder coming from local sources. This method created large disparities in per-pupil spending between rich and poor towns, with the richest district in the state spending almost three times as much as the poorest district (Mathis 2000). The heavy reliance on local funding also meant that because property in poor areas was valued much lower, local governments in these areas needed to maintain much higher property tax rates to raise money for their schools. Because rich areas’ property values were much higher, their governments could raise the same amount of money with a much lower tax rate. State representative Jack Andersen estimates that the town of Stratton, located in a wealthy ski community, could raise per-pupil spending one thousand dollars by increasing its property tax rate by one cent, while the poorer town of Richford needed to raise its tax rate fifteen cents to generate an additional one hundred dollars per pupil. The bottom line was that a property in a less affluent area could be and was taxed at 10 times the rate of a similarly valued property in an affluent area without generating the same amount of resources for schools (Kilborn 1999). In 1995, plaintiffs on behalf of the state’s poor districts filed Amanda Brigham et al. v. State of Vermont, alleging that the state had failed to live up to its constitutional obligation to provide equitable education and taxation.1 On February 5, 1997, the state supreme court agreed, ordering the legislature to provide an equitable distribution of education resources . The state’s response to the Brigham decision was quick, sweeping , and, to those with knowledge of finance reform movements in other states, almost unbelievable. In most instances of school finance litigation where plaintiffs have received a favorable verdict, the elected branches of state government have complied reluctantly and tried to design a remedy 48 • money, mandates, and local control in american public education that disturbed the existing finance system as little as possible. On June 26, 1997, Vermont governor Howard Dean signed Act 60, a law that would have made school funding in Vermont as equitable as any system in the country if fully implemented.2 It instituted a statewide property tax and promised every school a block grant of five thousand dollars per pupil. Local towns could vote to spend any amount over the block grant, but if they spent more, they also had to contribute money to a sharing pool designed to ensure that poorer towns would be funded at the same level. Act 60 had dramatic results, helping...