Wall Street Journal

Cross Country

Connecticut Faces a School Tax Revolt

By LEWIS M. ANDREWS
August 23, 2008; Page A9

On June 30, the board of education and the town council in Enfield, Conn., convened to hear the results of a citizen cost-cutting committee. Among its other recommendations, the 17 residents recommended replacing some public school teachers with low-cost college interns, restricting the use of school vehicles, and increasing employee contributions to benefit plans.

These may seem modest steps toward fiscal responsibility -- but they are emblematic of a significant change in this very blue state: growing disenchantment with the price of government, especially of public education.

Over the past two and a half decades, the student population in Connecticut has increased only 10%. Yet the cost of schooling more than doubled -- to $8.8 billion in 2006, up from $3.4 billion in 1981. Seventeen years ago, the state enacted an income tax with promises to cut other taxes. Instead, real-estate assessments soared, creating a massive income transfer from the private to the public sector, fueled in part by a state cost-sharing formula that uses taxes on residents in the suburbs to subsidize urban schools. Helping to soak up all that money were binding arbitration laws, skewed to give teacher unions an advantage in collective bargaining negotiations.

The result is that the average teacher salary is now the highest in the nation -- $57,750 excluding benefits, according to the latest survey of the American Federation of Teachers. Meanwhile, the American Legislative Exchange Council reports that Connecticut is one of the 10 states with the heaviest property-tax burdens. According to a calculator on the Web site of the Nonpartisan Action for a Better Redding, a local taxpayer group, even the smallest municipalities unnecessarily spent millions on school construction, much of it to meet a predicted increase in population that never materialized.

The calculator enables the resident of any town to compare the cost of constructing and staffing a new building (or addition) to the cost of simply subsidizing the overflow number of students to attend private, parochial or home schools. Says David Bohn, president of the group: "You could extend the subsidy to children already in such schools and still save hundreds of millions long term."

Now taxpayers find themselves caught between falling real estate values and ever increasing property taxes. And for what? The National Assessment of Educational Progress puts eighth-grade proficiency figures in the state at 37% for reading, 35% for math, 33% for science and 53% for writing.

Connecticut law does not allow a statewide referendum to curb school spending with a property-tax cap, as do ballot measures this year in Nevada and Florida. Nevertheless, most towns in Connecticut fold the school budget into the municipal budget, which can be voted on at a town meeting, or by annual referendum, or by a petition-inspired referendum, depending on the local rules. So citizens do have the ability to rein in public spending if they choose to act -- and that is what they are beginning to do.

This spring Avon, Farmington, Stonington and Ridgefield -- all affluent communities -- rejected the politicians' original spending plans. On June 17, the voters of suburban West Hartford, where public schools have often ranked among the best in the state, rejected the town budget by a lopsided 7,037 to 3,711. As of the end of June, a record 85 of Connecticut's 169 municipalities had or were planning budget referenda; and the median approved spending increase was 3.8%, lower than the 5% last year and 5.3% in 2006.

Limiting government at the state level is more difficult, thanks in part to a 1964 Supreme Court decision (Butterworth v. Dempsey) requiring that representation in state legislatures be based solely on population. By depriving rural regions of their traditional influence, urban Democrats and public sector unions have more influence. From 1970 until 2005, total state spending skyrocketed to $4,322 per capita from $863 in real dollars -- in spite of near-zero job growth and a decline in net population for every year except one in the decade between 1997 and 2006.

But at the local level, there are nearly as many Republican chief executives as Democrats, and both parties outside the big cities are relatively conservative on fiscal issues. This is leading to more than just budget defeats.

Mike Guarco, chairman of the finance board in Granby, has formed the Connecticut Municipal Consortium for Fiscal Responsibility, a bipartisan alliance of elected officials representing 117 of the state's towns. The group fights against binding arbitration, "prevailing wage" laws for public building projects, and burdensome state mandates (such as a requirement that all student suspensions be supervised in-house). These are the three largest cost drivers of K-12 education.

There are other ideas in the air. In Chester, First Selectman (Mayor) Tom Marsh proposes to pay students not to attend public school. He wants to give $1,500 a year to families who send a child to vocational school, $3,000 to families who homeschool, and to put $5,000 in a college scholarship fund for anyone transferring to a private high school.

Mr. Marsh also wants to give a full two-year community college scholarship worth $5,000 to students who graduate from public high school in three years. "If we can persuade families to consider options outside the system," he says, "we have the potential to save significantly long term."

With this gathering grass-roots rebellion -- and with the archbishop in Hartford advocating a tax credit for corporations that help poor students attend private schools -- the public education establishment is increasingly nervous. Last December, the Connecticut Association of Boards of Education and the Connecticut Association of Public school Superintendents wrote an unprecedented joint letter to every school board and superintendent in the state criticizing Armand Fusco, the retired school superintendent who advises the citizen cost-cutting committee in Enfield.

Mr. Fusco has not backed away. He notes that even before the Enfield citizens' commission offered its recommendations, the very existence of the committee spurred the town council to reject a requested 3% increase in the school budget, and to forestall efforts to raise the property tax rate. For next year, Enfield has already adopted zero-based budgeting.

The time is coming, says Mr. Fusco, for all Connecticut schools to "distinguish between needs and wants."

Mr. Andrews is executive director of the Yankee Institute in Hartford, Conn.