Governor Douglas announced Monday a supplemental education funding plan for FY2010 and FY2011 that will make use of the American Recovery and Reinvestment Act (ARRA) funds to hold down property taxes, reform the Education Fund and help bring sustainability to the General Fund without the need for costly tax increases proposed by the Legislature. This proposal comes in light of new information about the federal recovery money and the actions of school districts and the Legislature since the Governor s budget recommendation in January. I commend school districts for making progress in limiting spending growth to 2.2 percent this year, the Governor said. In these challenging economic times more must be done to rein in property taxes and ensure that increasing K-12 costs are not forcing deeper cuts to human services and environmental protection or pushing higher taxes onto already over stretched taxpayers. The Governor supports full funding of 2010 school budgets as passed, as well as funding for categorical grants at recommended levels. His revised plan continues to call for a 2 cent rate cut to statewide property taxes; a $75,000 cap on income sensitivity; moving the employer s share of teachers retirement to the Education Fund; and lowering the cap on property tax adjustments to $6,000 an idea currently under legislative consideration.The Governor also proposes that the 81.8 percent of the State Fiscal Stabilization Fund (SFSF) is used to offset the impact on property taxes as the State transitions to a sustainable education finance model. In addition, for FY 2011 the Governor proposes level funding per pupil spending and categorical grants at FY2010 levels and using the remainder of the SFSF to support the Education Fund. Ultimately, the Administration and the Legislature must enact a new education finance structure that is cost-effective, sustainable and upholds the high standards of education that Vermonters expect. Under Act 60 and Act 68, school spending and property taxes have risen beyond what taxpayers can afford, even as our K-12 population shrinks, the Governor noted. Only through reform will the system become sustainable. Legislative inaction is not an option.In January, Governor Douglas put forth a plan to make state government sustainable not just for the coming year but for the future. Doing so requires that all areas of state government share in the sacrifice so that no one area of government, service or group is forced to bear the entire burden of declining state revenues. Level funding for K-12 education is an essential aspect of his budget plan.The Legislature chose not to take up the Governor s recommendations and therefore must find another $63 million to balance the FY2010 budget either by increasing taxes, making deeper cuts or using one-time money to fund base budget increases leaving Vermonters vulnerable to the day when the federal money is no longer available.Governor Douglas believes that the ARRA funds provide a fresh opportunity for the Legislature to make these commonsense changes in the Education Fund and avoid the need to raise taxes or the prospect of facing a dangerous budgetary cliff in two years. Reining in skyrocketing property taxes will ultimately require legislative action on these proposals and long-term reform, Governor Douglas said. If this Assembly chooses not to act, property taxes will continue to rise and Vermonters will rightly look to them as the reason for the increases.This proposal complements the Governor s SmartVermont proposal unveiled last Thursday. SmartVermont is the Governor s plan to leverage $17.1 of SFS funds 18.2% funds into a nearly $160 million of immediate capital to spur job creation at all levels of our economy. Taken together, these proposals represent a real plan to jump start job growth, curb spending and address the Legislature s desire to use raise taxes, said Douglas.