Bennington board concerned about potential tax hike

BENNINGTON — The Bennington School District board was faced with a case of severe sticker-shock on Monday, as their first draft budget showed a large projected tax rate increase despite a more modest increase in spending.

Southwest Vermont Supervisory Union business manager Renee Gordon said that, based on early estimates of the school district's FY19 budget, the district could see a tax increase of 10.39 cents, or a 6.9 percent increase. Those budget numbers, which the board will look to reduce in the coming weeks, represent an increase of $678,990, or 5.1 percent. However, Gordon warned that even if the budget is level-funded to this year's level, the state's $50 million education budget shortfall would still see taxes increased by about 7 cents.

"We can't go with this budget," said board member George Sleeman. "We have a serious problem. Very serious." The board asked principals to come back to the next budget meeting prepared to discuss specific line items that could be cut, and what effect those cuts would have on students. That budget meeting will be held prior to the board's regular January meeting,

The board also asked that Special Education Director Wendy Pierce be present at that meeting to discuss special education spending.

Level-funding the budget would be easier said than done. Staff contracts, which were negotiated through collective bargaining in the spring, will increase about 3 percent on average. Bennington will also begin paying off its $4.5 million energy project bond this year, which resulted in the budget's debt service line increasing $321,670 over last year, which accounts for a large part of the total increase. Bennington voters approved the project in March of 2016, but it was delayed for a year after the Agency of Education said the board did not follow proper procedure in evaluating their contractor's project proposal. At the time of the bond vote, then-Chief Financial Officer Rick Pembroke estimated that the project would add 1.261 cents to the tax rate in the first year, which would then decrease in subsequent years, before saving taxpayers about a cent per year after the bond is paid off.

Student-staff ratios are, as would be expected, lower in special education than regular education, with some students requiring one-to-one staff supervision. However, each student's staffing needs, per state and federal law, are determined by their Individualized Education Program, or IEP. Those IEPs, per state regulations, are determined by a team consisting of the child's parents, a regular education teacher, at least one special education teacher, a local agency representative from the school district, the child whenever appropriate, and other individuals at the parent's or school's request. Because the IEPs determine special-ed staffing requirements, the school districts themselves have little control over the cost of those programs.

The state tax commissioner in November recommended a homestead property yield adjustment of $9,842 per equalized pupil, down from $10,160 this year. The state uses the weighted "equalized pupils" number to determine student population, rather than the real number of students. In the formula, for example, special education students count for more than regular education students because they cost more to educate. Similarly, high school students are weighted higher than elementary students.

The homestead property yield adjustment forms the base rate for calculating local tax rates. Local tax rates are determined by comparing per pupil spending to the base rate, then multiplying the resulting percentage by the state base tax rate, which is $1.00 per $100 in appraised property value. Therefore, a lower yield will lead to higher tax rates, even if spending stays the same.

In Bennington, according to Gordon's draft budget, the school district would spend an estimated $14,810 per equalized pupil for elementary students, or 150.48 percent of the base rate, and $14,786 for middle and high school students, or 150.23 percent of the base rate. These two numbers are then blended together based on student population (44 percent of Bennington's students are at the elementary level, compared to 56 percent at the middle and high school levels), to produce a net per-pupil number of about $1,480, or 150.34 percent of the tax commissioner's proposed property yield.

This would lead to a rate of $1.5034 per $100 in appraised value. However, the tax formula also includes a calculation called "common level of appraisal," or CLA, which attempts to correct for the difference between appraised home values and the actual values that homes in the community are selling for. The state has not yet announced Bennington's CLA, which Gordon said she hoped she would have by Christmas, but she estimated a rate of 93.61 percent, the district's rate from last year. A rate of 93.61 percent means that the state's data shows homes in Bennington are selling for 6.39 percent more than their appraised value, so the tax rate is adjusted upward accordingly. This would increase the projected tax rate to $1.6060.

This number represents a 10.39 cent increase from this year's rate. This would mean a resident with property appraised at $200,000 would pay $208 more next year than they paid this year.

Gordon warned that the projected increase would increase if equalized pupil numbers, which she has not yet received from the state, come back lower than last year's numbers.

Gov. Phil Scott said earlier this month that his administration was considering mandating higher student-staff ratios in order to make up the budget shortfall, which state officials at last count are estimating will cause an average tax rate increase of 9 cents across the state. Scott said that the state currently has about four students for every school staff member, and that raising that ratio to five to one could save $100 million.

According to data from the state, the student-staff ratio across the SVSU, from kindergarten through 12th grade, in FY17, or the 2016-2017 school year, was 4.59 to one. The ratio for Bennington was 8.91 to one, but that does not include SVSU staff, such as special education teachers and paraeducators, who work in the Bennington schools. The statewide average is 4.25 to one.

The SVSU ratio includes 591 full-time equivalent staff members and a K-12 enrollment of 2,715. In order to achieve a five to one ratio, assuming the student count remained at 2,715, the number of staff would need to be reduced by 48, or over 8 percent.

The term "staff" as it is being used by the state includes all staff except pre-kindergarten educators, maintenance and security staff, transportation staff, food service staff, enterprise operations staff, community services operations staff, and facilities acquisition and construction staff.

SVSU Superintendent Jim Culkeen said earlier this month that administrators had been warned when putting together their budget requests that any requests for new staff would only be approved if they were considered absolutely necessary, which has led to a de facto hiring freeze across the SU, although it is not being officially referred to as such.

Derek Carson can be reached at, at @DerekCarsonBB on Twitter and 802-447-7567, ext. 122.


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