Top Down and Top Heavy

Guest Perspective

Study of ed funding system offers poor prognosis for state-run healthcare system

Contact: Rep. Olsen, 802.585.5435; Rep. Eckhardt, 802.342.0140

Montpelier, Vt. – As the Vermont legislature continues its push for a government-run healthcare system, new data from a report on Vermont’s education funding system suggests that the state has a lot to learn about cost control.

According to the report by Dr. Lawrence Picus, which was commissioned by the Vermont Legislature, since the passage of Act 60, Vermont has experienced the largest growth of per-pupil spending in the country – 149.9% between 1999 and 2011. Yet, despite this dramatic rise in spending, the report finds that, “Vermont’s results have been relatively flat, or exhibit only modest increases, over the past five years.”

“We have learned a lot from Act 60, but most importantly, we have learned that top-down approaches from Montpelier are heavy on cost and light on outcomes,” said Rep. Oliver Olsen of Jamaica, a member of the tax-writing House Ways & Means Committee.

Since 1999, the growth of per-pupil spending in Vermont has actually outpaced healthcare spending growth, prompting lawmakers to question whether the state is capable of reigning in the cost of education or healthcare with a top-down approach from Montpelier.

Together with Rep. Jim Eckhardt of Chittenden, a member of the House Healthcare Committee, Olsen compared per-pupil spending data used in the Picus report with healthcare expenditure data from the Department of Banking, Insurance, Securities, and Healthcare Administration (BISHCA).

“The data shows that, from 1999 through 2009, the growth of per pupil spending was ten percent higher than the growth rate of per capita healthcare spending,” commented Olsen.

Even as student enrollment declined by 18%, Vermont’s education revenues jumped from $850M in 1999 to $1.5B in 2011 – propelled by a convoluted funding mechanism that has fueled increasing staff levels. While enrollment has been falling, the report found that, from 1999-00 to 2009-10, teaching positions increased by 3.1%, and administrative staffing levels increased by 22% from 2000-01 and 2009-10.

Rep. Eckhardt commented, “Governor Shumlin is using the increasing cost of healthcare to justify a government takeover of Vermont’s healthcare system and the creation of massive new state bureaucracy.”

Eckhardt continued, “It is clear that we have a bigger cost problem with a system the state already took over, so why not solve that problem first?”

Source: NEA Rankings & Estimates (via Picus Report) and BISHCA Expenditure Analysis Data (via JFO)