A word about Act 68 and our school budget…

Any way you look at it, it costs a lot of money to maintain schools and educate students today, and Dummerston School is no exception.  Recently, that became even more noticeable as Dummerston taxpayers received their property tax bills.  Many folks have called the school wanting to know why the costs have increased.  The following information was written to give residents an overview of how the residential education tax is calculated and to show how Dummerston School spending compared to the average amount schools within the State of Vermont spend on education.  

 

Last year, with the implementation of Act 68 many taxpayers saw significant, one-time reductions in their residential education tax.  In addition to this one-time reduction, Act 68 also imposed penalties to school districts that exceeded the new “spending cap” set by the state for equalized pupil expenditures in an attempt to contain educational spending.  This provision set a threshold or spending cap over which any spending was deemed to be “in excess.”  Districts spending over the annual threshold are taxed a second time on the excess amount.  The spending cap is a rather arbitrary amount of money that legislators determined would provide an adequate education to an average Vermont student.  For the 2006 school year, Dummerston School is spending $772.00 more per equalized pupil than the state threshold allows and because the $772.00 is calculated by per pupil expenditures, Dummerston would need to cut approximately $217,000.00 in order to bring its expenditures down to the threshold.  A $217,000.00 cut would, most likely, come from salaries and benefits since there are no other areas within the budget that have enough funds to cover such a significant reduction. 

 

When we began the budget process, we knew that there would be a significant increase in the education tax rate from 2005 to 2006.  During the budget process the board reviewed staffing, licensing requirements, state mandates and discretionary expenditures.  The board reduced discretionary spending by $8,627.00, which reflects a decrease of -3.57% from discretionary spending in the 2005 school budget.  Due to the increase in enrollment of Dummerston students at the Brattleboro Union High School the district’s share of High School expenses increased by more than $300,000 (from 2005 to 2006).  The District also had to cover contractual wage and benefit increases.  In order to prepare taxpayers for this increase, the school district provided handouts at Town Meeting, which outlined the various homestead values, household income levels and the estimated education tax result.  Fortunately, the actual rate is lower than what we had estimated the education tax rate to be for this year.

 

How is the residential education tax set?

 

The education tax rate is a formula that was developed by the state (in response to Act 68) and used by towns to determine the annual education tax rate for the district.  Unfortunately, it is not as easy as taking the total school budget and dividing by the number of students at Dummerston School.  The formula takes into consideration a number of facts such as the overall amount of the budget, revenue from sources other than taxes2, the equalized pupil count (a weighted count of Dummerston Students, K-12 over a two year period), the base amount the state pays per equalized student, the district spending level (see comparison below), the common level of appraisal3 and the base tax set annually by the legislature. 

 

There are four important points to be aware of when looking at the residential education tax rate:

 

  1. Last year’s 2005 tax rate was significantly lower than previous years because the state legislature adjusted the funding formula under Act 68 so that taxpayers would see a one-time tax reduction.
  2. When compared to other schools within the WSESU, Dummerston receives very little federal revenue.  The Supervisory Union’s average federal share of revenue is 13% and for Dummerston it is less than 1%.
  3. The Common Level of Appraisal (CLA) is a percentage value that is a key component of the residential education tax formula.  The Common Level of Appraisal is annually recalculated and set by the State of Vermont, Division of Property and Valuation based on the difference between the appraised values and sale values of property sold within a municipality.  It is important to remember that the CLA is determined outside of the school budget process so the amount a school spends does not affect or change the CLA.  Yet a decrease in the CLA has a significant impact on the education tax. 

 

Dummerston’s new education residential tax rate is $2.849, which is $0.68 more than last year’s rate.  Approximately $0.42 of the increase for 2006 is attributable to the decrease in the Common Level of Appraisal for Dummerston.  The 2006 CLA is (72.36%).  The impact of the CLA can be best be seen when one compares this year’s tax rate to what the education residential tax rate would have been if the CLA stayed the same as last year’s rate (84.77%).  The residential education tax rate for 2006 would have been approximately $2.43.  This rate, when compared to last year’s, one-time adjusted rate, is still an increase of $0.26 cents.  However, when you compare it to the 2004 education residential tax rate of $ 2.52, it would have been $0.09 less.

 

  1. A key component of education funding in the State of Vermont is “income sensitivity.”  Over seventy-five percent (75%) of Dummerston households are protected by income sensitivity, which caps the homeowner’s education tax liability at $75,000.00 or less.  Said simply, any household with an income of $75,000.00 or less will not pay more than 3.7% of their household income for residential education taxes regardless of the CLA.

 


As homeowners look at their new property tax bills, it is helpful to know how Dummerston School spends the money it receives.  The table below compares our spending to the average spending of other schools within a Supervisory Union throughout the state.

 

 

 

Table I:  Dummerston School spending averages based on figures obtained from the state for 2003 and 2004 (last available figures).

 

Cost Per Student Analysis

FY2003

 

FY2004

 

 

 

 

 

 

 

Dummerston

State Average

Dummerston

State Average

Direct Instruction

$7,813

$6,467

$8,641*

$6,950

Pupil Support (nurse/counselor)

$593

$776

$713*

$854

Staff Support (Library, program improvement)

$371

$398

$389

$425

Administration

$821

$1,035

$863

$1,093

Transportation

$909

$347

$997

$385

Other Support (includes payment to state education fund)

$1,017

$1,093

$1,093

$1,187

Food Service/Other

$316

$300

$450

$328

 

 

 

 

 

Total

$11,840

$10,416

$13,146

$11,222

 

* FY05 amounts would show decreases from FY04 due to reduction in personnel

 (1 teacher, 1 paraeducator, 1 day for school counselor)

 

While this partial list of factors may explain some of the variation between Dummerston School and other schools, it is important to remember that there are other factors the table does not address such as:

 

It is my hope that this information provides readers with a better understanding of how the school budget is developed and how variables, outside of Dummerston School’s control, have an effect on local taxpayers.  In our effort to control costs and maintain the integrity of our educational programs, the School Board and Administration will continue to work to balance the needs of our students with the resources available to the Dummerston community. 

 

Budget preparation for school year 2006-2007 begins in late October.  School Board meetings devote a portion of each meeting from October to the beginning of January preparing the budget for presentation at Town Meeting in March 2006.  These meetings provide community members a forum in which to ask questions and hear accurate information about school spending.  Dummerston School Board meetings are held in the school’s Library/Media Center on the second and fourth Tuesday of each month beginning at 6:30 p.m. 

 

Jo Carol Ratti

Principal, Dummerston School