On April 17, 2024

Caught flat-footed, Legislators rush to mitigate ed tax increase

By Curt Peterson

The Vermont House Ways and Means Committee is rushing madly to solve a crushing education tax problem.

Early in January, several state representatives warned colleagues that an education fund issue would cause severe pain property taxpayers across the state. Many of the elected, and Governor Scott, chanted, “Cut your budgets!” as their answer to the crisis.

Unfortunately, lots of people adopted that mantra, accusing school officials of irresponsible spending and budget fat. About 30% of district budgets were defeated on Town Meeting Day in March.

School boards, also aware of impending doom, discussed possible remedies at public board meetings which no members of the public attended.

So, when prospective tax increases became public, taxpayers were both surprised and angry. A frequently repeated example of effect on Hartland property taxes cited an $1,100/year increase in ed fund taxes for a house assessed at $250,000.

“Covid refugees” and a vibrant general housing market over the past three years increased the statistical market value of Hartland properties. The ed fund applies a “Common Level of Appraisal” (CLA) to the ed tax rate, representing the difference between Hartland’s Grand List evaluations and the true market value of properties — which had the effect of increasing the ed tax rate locally by 31%.

Hartland School Board chair Nicki Buck told The Mountain Times that, without the CLA, the original school budget wouldn’t have increased the basic ed tax rate at all.

Nonetheless, the school board rescinded the $11,500,000 original budget, slashed about $500,000, and put to voters on April 2. It passed by 9 votes out of more than 600 plus cast. The budget amendment sounded like a reasonable reaction to the tax increase, but, Buck pointed out, it didn’t make a dent in the proposed ed tax rate.

Bottom line? Neither the original nor the amended version of the budget had any effect on the ed tax rate.

“96% of a school budget is determined by the state,” Windsor County representative Elizabeth Burrows told The Mountain Times. “Local boards control only 4%.”

“And the CLA is not going to go away. Not this year,” she said. “The best we can hope for will be a dampening the CLA effect.”

Burrows thinks the various state mandates for unfunded services now foisted on schools — such as mental health services, special education and universal lunch —should be assumed by the state to cover their costs. That would help make the school budgets look more reasonable.

Clinging to the Legislature’s and governor’s accusation of budget fat, residents petitioned for a revote on the budget, incorrectly implying that school spending caused the tax increase. Buck said the board is now paying for legal advice regarding the petition, and a probable revote, will cost more money without providing the desired result.

Windsor County representative Elizabeth Burrows, also a local school board member in the Ascutney Supervisory Union, reported on last-minute progress made by the Legislature as of Monday, April 15. She said the dream is to eliminate the tax increase, but that is not going to happen.

Burrows was one of the representatives who warned colleagues about the tax debacle, and she is monitoring all negotiations over the education tax issue.

“We’re not going to see elimination of the ‘CLA’,” she warned, “but I suspect Hartland’s 31% may become around 15%.” That would cut the expected tax increase on the $250,000 home to about $550.

Hartland Board of Listers chair Stacey Bradley answered Select Board chair Phil Hobbie on Monday evening, when he asked if the town could get a faster reappraisal in view of a shortage of licensed professionals.

“We can put out a Request for Proposals among various professionals,” Bradley said, “but a reappraisal isn’t going to help — the properties will still be taxed at or near the estimated market value, it just won’t involve application of the CLA.”

A final house floor vote on the final proposal may come as early as Thursday, April 18. It will then go to the senate for consideration.

Burrows said public opinion matters a lot at this time — individual emails should be written to Representative Kornheiser, chair of the Ways and Means Committee, and to state senators. Dick McCormack and Alison Clarkson are Windsor County senators. David Weeks and Terry Williams are senators for Rutland County.

Rutland County representative Jim Harrison agrees with Burrows that nothing permanent is likely to be in the final proposal.

“There have been several suggestions for changing the method for ed fund financing,” Harrison told The Mountain Times, “including using all income tax, or maybe diverting other revenue, or adding taxes – such as taxing on-line downloaded software, an increased tax on short term rental income, or increasing the tax rate on non-residential properties. The administration suggested spreading the CLA effect over a couple of years instead of all at once.”

“No matter what the change is going to end up being,” Harrison added, “there will be winners and losers, and some people are going to be unhappy.”

“I agree that our method of funding education needs to be reevaluated,” said Sherry Sousa, Mountain Views Supervisory Union Superintendent. “The source for funding education, to me, is not as significant as addressing the causes for these increases.  These include schools assuming greater responsibility in meeting the mental health needs of students, inflated health care costs for employees which is a significant portion of our budgets, the impact of supporting private schools with public dollars, and the use of the Educational Fund by the Legislature for initiatives without a dedicated funding source. Until and unless, we have these conversations with all parties this crisis will continue.”

Sousa continued. “The discussion of how we fund public education in Vermont has been a topic of discussion in Montpelier for many years,” she wrote to the Mountain Times. “We have had multiple studies and outside groups offer their best thinking on how to move forward in an equitable and sustainable manner.  There are extremely difficult decisions that need to be made but I feel that few have stepped up to that responsibility.  This leaves individual School Boards, administrators and communities to make decisions in this void of leadership. Without a clear vision of what public education should be in Vermont and a strategy to achieve that vision, we will continue to fumble along looking for a quick fix.”

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