Hartford — When Vermont Gov.
Peter Shumlin penned a major education reform bill into law on Tuesday,
he emphasized the bill’s goals of “right-sizing” education
infrastructure, improving opportunities for the state’s students and
providing property tax relief.
But adapting to H 361 will be difficult for
dozens of school districts throughout the state, including many in the
Upper Valley, which are now charged with limiting their spending growth
to less than 2 percent per pupil , under threat of stiff penalties, in the 2016-17 school year .
“We needed to have something that sent a
very clear message that the expectation is that we will all take a very
good look at our spending habits,” said Rep. Kevin “Coach” Christie,
D-Hartford, a member of the House Committee on Education.
An earlier version of the bill supported by
Christie included a hard spending cap limiting budget growth for all
school districts, but after many school districts spoke out against the
spending caps, legislators agreed on a compromise, the “variable
education spending growth limit.”
That limit identifies a target spending goal for
each of the state’s 267 individual districts. If a district’s budget
increases by more than its target over the next two years, its property
taxpayers will incur stiff penalties.
Under the new formula, districts with higher per-pupil spending are held
to stricter limits, while those with lower per-pupil spending have more
leeway. The amount is calculated on a per-pupil basis, so if a school’s
population grows it will have more space in the budget, while a
shrinking student population would result in a tighter allowance.
Not all school expenditures are counted against
the per-pupil spending number. Under existing law, about a dozen types
of expenditures, the most significant of which is capital spending, are
excluded, according to Mark Perrault, a senior fiscal analyst with the
state’s Legislative Joint Fiscal Office.
If a school has borrowed money
to pay for a new building, for example, the amount of the debt service
doesn’t count against the per-pupil spending amount used in state
calculations.
A list of about 250 districts from the
Legislature shows that, at the upper end of the spectrum, districts
spending about $18,000 on each student in the upcoming school year,
fiscal 2016, can’t increase their per-pupil spending at all in budgets
to go before voters at March 2016 Town Meeting.
At the other end of the spectrum, a handful of
schools that spend between $8,000 and $10,000 per student have much more
latitude to increase their spending, by as much as $524, or 5.5
percent, per student.
Hartford is somewhere in the middle, spending
$14,858 on each of its 1,510 students under the fiscal year 2016 budget
of $22.4 million. That means the district is allowed to increase
spending by only 1.65 percent in the FY17 budget it will present to
voters next March, which amounts to $245 per pupil and a total of
$371,000.
That’s more latitude than many districts will
receive, but it’s a far cry from the $1.3 million increase approved by
Hartford School District voters this spring, which school officials
argued was the absolute minimum needed to prevent the elimination of
staff.
Perrault said the limits give districts more flexibility than an iron-clad mandate.
“Nothing requires how much they can spend. It’s not a cap,” said Perrault.
But Christie, who is also a member of the Hartford School Board, said he
expected every district would comply with the spending targets,
“because, if you’re over that, you’re going to get slammed.”
Perrault said that, for every $1 a district
spends above the target spending limit, taxpayers in that district will
be charged as if district spending had actually increased by $2, with
the additional money going into the state education fund.
“The amount they spend over that limit gets counted twice,” Perrault said.
In Hartford, for example, the spending increase
threshold is 1.65 percent, or $245 per student. Based on current tax
rates, increasing the threshold by $245 would result in a school tax
rate of $1.56 per $100 of taxable property, or $3,900 on a home valued
at $250,000.
But if Hartford were to increase spending by
2.3 percent, which represents an additional $100 per student, the tax
rate would be calculated as if it had spent an additional $200
per student, resulting in a $75 tax increase on that home. And if
per-pupil spending increased 5 percent, taxes would go up by $275 on
that home, according to tax-rate calculations by Perrault.
In the Windsor Southeast Supervisory Union,
four member school districts in Hartland, Windsor, West Windsor and
Weathersfield are allowed to increase their spending by amounts ranging
from less than 1 percent to about 2.7 percent.
Those amounts aren’t realistic, said supervisory union Superintendent David Baker.
“It is an incredibly tough budget hoop,” Baker
said. “With the continued unpredictable nature of special education, the
benefits piece unstable, contractual increases in salaries, and health
insurance costs, staying within the cap is going to be nearly impossible
in all of these towns.”
Baker said discussions with other
superintendents in the region revealed that most expected they would be
forced to reduce staff to comply with their targeted spending limits.
Steve Dale, executive director of the Vermont
School Boards Association, said the Legislature deserves credit for
tackling the big issues of the dramatic spending inequality that has
emerged among Vermont schools, and finding a way to provide property tax
relief.
By giving schools options on how and when to
pursue consolidation and control their costs, the Legislature has
provided a lot of appreciated flexibility, he said. However, Dale said,
the association has also identified the cost control mechanism as a
major flaw in the bill.
Under the formula, schools spending more than
the state average presumably have some room to trim expenses, while
schools spending much less than the state average have more room to
increase spending. But Dale said the cost constraints will be
particularly difficult for a group of about 50 schools that spend
moderately less than the state average of $14,164 per student, but which
will be able to increase their spending by only about 2 percent. He
predicted that many schools in this category would be forced to go over
the threshold, creating steep tax increases, rather than tax relief, in
those communities.
“It virtually guarantees that a whole set of lower spending districts could have a large tax increase,” he said.
Dale also expressed concern that the bill didn’t
provide any funding to the Agency of Education to implement the bill,
which he said could leave many districts without the support they need
to properly weigh their options.
Constitutional Questions
While Shumlin trumpeted the legislation as a
“game changer for Vermont,” some groups are questioning whether it
violates the precepts of the Brigham decision, the 1997 Vermont Supreme
Court ruling that said educational opportunity should be “available on
substantially equal terms” to students across the state, no matter the
property wealth of their school districts. The Brigham case led to the
Act 60 school funding system, and then its successor, Act 68.
Allen Gilbert, the executive director of the
American Civil Liberties Union of Vermont, wrote Shumlin on May 19
saying his organization “doubts the constitutional validity” of the per
pupil spending limits, noting that the Danby school district could spend
up to $17,077 per pupil in fiscal year 2017 without triggering an
increase in its education property tax, while the town of Lowell’s
threshold would be just $11,688. Danby could spend 46 percent more per
pupil than Lowell without triggering the tax penalty, Gilbert noted.
“If any one school spends above its cap, it will
trigger the penalties that will create the constitutional infirmity of
unequal access,” Gilbert wrote. “This matter is of great concern to the
ACLU, and we will consider seriously any requests for legal assistance
from districts that are harmed by the provision.”
In response, Secretary of Education Rebecca
Holcombe wrote Gilbert on June 1, acknowledging that the provision could
“result in some variance in school funding for a period of one or two
years among different districts,” but that they could be, “at worst,
relatively incidental.” She also said the measure was not a spending
cap.
Holcombe, a Norwich resident and former educator
in the Upper Valley, also noted that the Brigham decision left it to
the Legislature to design the school funding system.
“We appreciate that a final decision as to
whether (the spending limits provision) fits within the above discretion
is ultimately for the courts to decide. Nevertheless, we believe that
the bill, on balance, represents progress in maintaining quality
education for all Vermont students in light of continued statewide
declining enrollments,” Holcombe wrote. “Without greater scale, some of
our districts will be unable to provide high quality, equitable
education.”
Considering Mergers
The new law aims to accelerate a trend toward
consolidation of school districts by establishing a minimum threshold of
900 students per district. Districts that don’t have a voter-approved
consolidation plan in hand by 2018 will have their cases reviewed by the
Agency of Education, which will draft a consolidation plan for approval
by the state Board of Education.
The law includes significant incentives for
districts that merge quickly, which has some districts scrambling to
identify and lock in potential merger partners.
Hartford is comfortably above the minimum number
of students, but school officials said they would like to explore the
possibility of a merger, in part to take advantage of the significant
tax benefits the state is providing to those that consolidate their
administrative structures early.
Towns that have taxpayer-approved consolidation
plans in hand by June 2017 will see a dramatic reduction in their taxes —
in the first year, it amounts to 10 cents per $100 of valuation, or $250 on the property tax bill of a home valued at $250,000. The benefit diminishes by 2 cents per year over a five-year period.
Hartford Superintendent Tom DeBalsi said during an April 22 meeting that the incentives are huge.
“Do people understand what that would mean for
the Hartford School District, if we could open that conversation with
some of the surrounding towns?” he asked.
“If you can agree with another town to
consolidate and form one school district, take in another town, you can
get incentives off of your tax rate.”
Schools that consolidate after the deadline
still receive a scaled-back incentive that starts at 8 cents off the tax
rate in year one, and then declines by 2 cents per year over a
four-year period.
Christie, who was chairman of the Hartford
School Board for most of the time the bill was being written, said the
district benefited from having that connection to the proceedings in
Montpelier. “I have tried to keep a very close eye and make sure our
administration knows where this is heading,” he said. “We started making
adjustments years ago that have positioned us pretty well.”
Christie said Hartford has already reduced staff and taken other measures to improve efficiencies.
But Hartford officials also see an opportunity
to earn a financial coup under the law, by taking advantage of
significant incentives to merge with other districts.
“Districts need to say, ‘Wait a minute, if we
open up our minds, we might be able to come up with a plan that really
provides a good organizational structure and also provides relief to our
taxpayers,” Christie said.
In the April meeting, Hartford School Board
member Peter Merrill proposed holding a series of public forums inviting
feedback from the public about possible consolidation with other
districts.
“Immediate candidates that come to mind are
neighbors to the south because they are right on the interstate so they
can transport students here quickly without huge transportation costs,”
he said.
The Hartland School District, which lies to the
south of Hartford, has only 453 students and has a higher per-pupil
spending rate, $16,533, than Hartford. Under the new law, Hartland can
increase its $7.5 million school budget by only 0.92 percent per pupil,
or a total of $69,000, next year.
The forums, which have not yet been scheduled,
are the beginning of a series of planned community discussions hosted by
the Hartford School Board in an effort to generate more public
discussion of the business before the board.
During the April 22 meeting, School Board
Chairwoman Lori Dickerson said communication between the board and the
public is lacking.
“We have to be able to get our ideas out to the public and their ideas out to us,” Dickerson said.
School Board members Christie and Merrill both
declined to comment on specific consolidation plans of the board,
deferring to Dickerson, who they said acts as the sole spokesperson for
the board. Dickerson did not directly return calls seeking comment, but
after speaking to Dickerson, Merrill said the board was declining
further comment.
DeBalsi said Thursday that the board has
discussed consolidation only “in a very limited way,” and he would
encourage them to welcome any schools or districts into a discussion
with Hartford.
But while Hartford school officials won’t even
publicly name Hartland as a possibility, the clock is ticking, and
supervisory union officials are already deeply engaged in substantive
discussions with Hartland about what a merger might look like.
Baker said that, at the supervisory union, the rush is on to present options to the public.
“The day the legislation was announced, I got my
four board chairs together … we came up with an informational set of
slides and a very early draft of a potential proposal. Two days later I
brought that slideshow to the supervisory union board and we spent about
two hours talking about it.”
In the end, Baker said, he hoped to get voters
in the four member towns to understand their options so they could make
an informed decision about whether to “take advantage of the early
adoption incentives, or wait it out.”
Baker said he’s made similar pitches to persuade
Hartland and Weathersfield, which could potentially join the
Springfield (Vt.) School District, to stick with the supervisory union’s
current grouping.
“I would say they’re a little more proximate to
us and they’ve got a little more history with us,” Baker said. “They
know the central office players and the principals; they’ve done staff
evaluation work together and curriculum work together. It would be
easier than going to a totally new set of employees and staff members.”
News staff writer
John Gregg contributed to this report.
Matt Hongoltz-Hetling can be
reached at mhonghet@vnews.com or 603-727-3211.
