On February 7, 2024

MVSU revises TMD articles 


Submitted

 

School Board decreases budget in anticipation of Act 127 reforms

By Polly Mikula

At an emergency meeting Friday, Feb. 2, the Mountain Views Supervisory Union (MVSU) district board voted to amend two Town Meeting Day (TMD) articles related to the proposed district budget and bond for a new school.

The decision came after superintendents met with the chairs of the House Ways & Means committee and Agency of Education, alerting them to likely changes in funding calculations due to revisions on Act 127. 

MVSU Superintendent Sherry Sousa told the district board Friday that the transition period previously built into Act 127 (a 5% cap on the equalized tax rate increase) would likely be going away for their district due to a lack of  funding in the state education fund —to the tune of $100 million. 

“We were following the law as it was written and had assumed it would hold,” said Ben Ford, chair of the finance committee, in an interview with the Mountain Times, Tuesday. “We saw an opportunity to do right by our taxpayers and pay down additional debt while still staying under  the mandated thresholds, but that opportunity may have now disappeared so we backed it out,” he explained.

The changes come as the state scrambles to address higher than anticipated education spending statewide. Removing or lowering the 5% cap is now widely expected in an effort to limit ballooning education expenses.

“While there are no definitive actions, there is a lot of ‘energy’ at the statehouse around making these changes and so I felt it was important to bring the budget back to the board for consideration… The vote would have to happen today — that’s why we’re meeting at 5 p.m. on Friday — so that it can be posted by Feb. 4,” Sousa explained.

How does it affect spending?

The MVSU board had originally approved a proposed district school budget of $30,429,153 for FY2025 on Jan. 8. On Feb. 2 the board removed $672,479 of advanced debt payments from the total for an amended proposed budget of $29,756,674.

This year’s revised FY25 budget is $3.9 million over last year’s $25,836,048 voter approved budget (a 15.2% increase). The most significant increases in the MVSU budget are the same that face all other districts in the state: namely a 16.4% increase in health insurance (brokered by the state, “totally out of district control,” Ford said.) Of the total MVSU budget about 80% of it is “people costs” which are contractual obligations, Ford noted.

The FY25 equalized tax rate for the district is now $1.6148 — a 6.39% increase if the 5% cap from Act 127 is removed.

Removing or lowering the 5% cap is 

now widely expected in an effort to 

limit ballooning education expenses.

The equalized tax rate is calculated by subtracting local revenues from the budget ($29,756,674 – $4,515,121) which equals an education spending about of $25,241,553, which is divided by 1,520 long-term-weighted equalized pupils, and then divided by the statewide yield (now estimated to be $10,250 according to Jim Fenn, MVSU director of finance and operations). 

The statewide yield is a changeable factor that the state sets and adjusts as necessary. It is calculated to be the per pupil spending amount the state can support with a $1 tax rate on homestead property and is typically set to ensure there are sufficient revenues raised to fund all expenditures, according to the Vermont Legislature’s Joint Fiscal Office. 

Until recently the state had set the yield at $9,452 per student, but if the 5% cap is removed, the projected yield is projected to increase to $10,250.

How does it affect taxes?

In order to derive education tax rates for each town, the FY25 equalized tax rate of $1.6148 must be divided by the Common Level of Appraisal (CLA) which adjusts taxation on fair market values. In Killington the CLA is 0.5235 so the FY25 estimated homestead property tax rate is $3.0846, a 24.8% increase. (Under the 5% cap it would’ve been a 23.5% increase).

The revised school district budget (Article 6) will be on the ballots of the seven towns that make up the district — Barnard, Bridgewater, Killington, Pittsfield, Pomfret, Reading and Woodstock — on Town Meeting Day, March 5.

Article 7, new school bond

In addition to the budget, district voters will be asked to approve Article 7, a bond for a new school. The bond article says it will not exceed $99 million to finance construction of a new Union Middle/High School on the site of the existing school in Woodstock. The bond would also cover athletic field reconstruction and the demolition of the existing structure.

On Feb. 2, the board also voted to change the language of the article to streamline understanding.

“We removed a lot of duplicative wording that seemed to confuse rather than clarify the issue,” Ford explained. 

The revised Article 7 reads:

“The Mountain Views School District proposes to incur bonded indebtedness for the purpose of construction of a new Union Middle/High School and to install athletic fields and related outbuildings and structures, and to demolish, remove and dispose of the existing Woodstock Union Middle/High School in Woodstock, Vermont, in an amount not to exceed $99,000,000.

“The Vermont school construction aid program has been suspended since 2007. Accordingly, state funds may not be available at the time this project is otherwise eligible to receive state school construction aid. The District is responsible for all costs incurred in connection with any borrowing by the District for the Project in anticipation of state school construction aid. To meet this responsibility while limiting impacts to district taxpayers, the district intends to use other funding sources such as Inflation Reduction Act funding for renewable energy projects and amounts raised through private fundraising.

“Shall the bonds of the Mountain Views School District in an amount not to exceed $99,000,000 be issued for the purpose of construction of a new Union Middle/High School and to install athletic fields and related outbuildings and structures, and to demolish, remove and dispose of the existing Woodstock Union Middle/High School?”

For more information, visit:
mtnviews.org.

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