Act 46's spending limit is a challenge locally
WINDHAM COUNTY — Windham Southwest Supervisory Union Superintendent Chris Pratt says the biggest challenge his schools are facing with a new education law is the spending limit that penalizes districts whose budgets come in higher than the allowable growth.
"Just with the 7.9 percent increase in health insurance alone is pushing everyone above the cap," he said. "I think that's why so many conversations are going on that are tied into Act 46 in regards to, 'What are we going to do?'"
The goal of the spending limit was to restrict increases to taxes associated with education and save taxpayers money. The law itself was partly the result of taxpayers wanting reform in that department.
Schools districts around the state have limits on their budgets dependent on budget growth per equalized pupil. But several legislators, Gov. Peter Shumlin and the Vermont School Board Association are now wondering what can be done to change or scrap these limits.
The spending limit allows for 2 percent growth but districts receive different percentages due to it being based on equalized pupil counts. These counts come from school districts submitting their enrollment numbers in the fall then the state determines an average daily membership for each district using data. This formula is used when homestead tax rates are being set.
Any amount over Act 46's calculated thresholds is going to be added to the actual spending per equalized pupil to provide the homestead tax rate, according to the Agency of Education. This will "double tax" each dollar in excess of the allowable amount.
"I think the big conversation's going to be around what can be cut out of the budget without compromising student learning," Pratt said. "With small districts, there is nothing. No matter what you take out, you're going to compromise student learning and it's going to do the opposite of what the state set out to do."
He was referring to the other goal of the law: addressing student inequity.
A new facility was constructed for Twin Valley Middle and High School after voters in Wilmington and Whitingham supported consolidation in 2011. Students began classes there in September 2014.
"They're building the school, building the program. But they've got to make cuts or they'll be above the threshold," Pratt said. "How can you entice people to come to Twin Valley for offerings if you're trying to stay above the threshold and there's no wiggle room for programs. It's a double edged sword."
He is advising boards "work from the outside in" when drafting budgets, meaning cuts should start away from instruction so they're "not going straight for the jugular of classrooms."
Pratt said he thinks school boards in his supervisory union are waiting to hear whether the Legislature will make any adjustments to the spending limit. But, they are all hoping it will go away.
Windham Central Supervisory Union Superintendent Steven John said most of his school boards are "pretty determined" to stay below the limit. However, the elementary and junior high school's board in Marlboro is looking at the possibility of approving a budget above the limit.
With their tax rate going down due to a change in their common level of appraisal, John said the board probably figures that's "pretty good news for the taxpayers." Board members also expressed hope that things would change in terms of the penalty.
The appraisal adjustment is meant to ensure Vermonters pay a comparable amount of education tax on properties of equal value. The number should reflect local changes that come with reappraisal schedules and other factors, according to vermont.gov.
"The reality is as with any previous year, your budget can go up but your tax rate can go down depending on the CLA (common level of appraisal)," John said.
Education spending is not only defined by the amount of kids, he noted, but by capital expenditures, bond payments and other expenses.
Uncontrollable factors are what John believes boards will find challenging. Those include health insurance rates, special education costs and new families unexpectedly arriving. With legislation now mandating pre-k tuition, several Windham Central schools are putting at least $3,000 per student into their budgets. And teacher and support staff member contracts in the Leland & Gray Union Middle and High School and Wardsboro districts expire on June 30.
"We have to have something in the budget but we're not advertising what it is. We have to leave that up to negotations," said John of the process set to begin later this month.
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