Boards have heated debate over user fees
Whitingham and Wilmington residents will be voting on the school budget via Australian ballot on Tuesday at annual Town Meeting Day. But Whitingham voters will need to add a $110,000 user fee in order for the budget to pass after the town's Select Board removed an article about user fees it has previously included for floor votes at Town Meeting.
"I don't have any kind of a contract to show what we spend $110,000 on — whether it's mowing the grass, sanding the sidewalks, putting the lights on — nothing, zero." Select Board member Greg Brown told school officials during a heated informational meeting Tuesday night. "And you had plenty of time to produce that."
User fees are paid to the owner or operator of a facility for access. With the fee, Whitingham residents stand to save about 12 cents on the school tax rate this year. Without it, their school rate will go down 5.5 cents and the municipal rate would drop by 4 cents.
"I kind of want to know why I'm going to pay another penny and a half in taxes because you won't take responsibility on the municipal side?" John Doty, outgoing Twin Valley board member, said in an irritated tone.
Brown said the town hired auditors and sent school officials a letter in April requesting a rental agreement breaking down costs to account for the user fee. He called the fee "a big topic for a few budget cycles" and "possibly no longer legal."
"I'm surprised with all this certainty around it, when budget time came around this year, there was no question poised to as what the town plan was," Brown said. "Would it be in the warning? Was it in the town fund?"
Brown said Whitingham saved 3 to 4 cents with the user fees last year but the rate still rose 34 cents. The town has initiated a lawsuit against the state "to try to right the ship on the tax burden and the substandard education that we were receiving," he added.
Whitingham voters at last year's Town Meeting approved of funding a legal defense for the cause. Residents in both towns had rejected the school budget in protest of very large tax rate increases that were blamed on the state's funding formula. A second vote saw it approved.
The user fees, Brown said, are "undermining the intention of the suit by showing revenue that's not really valid."
Brown said his town uses the high school for annual Town Meeting, the yearly Maple Sugar Festival and Old Home Day every 10 years, but it also provides assistance to the school from the highway department.
"As far as your question about a penny and a half, that 34 cents I paid last year with raising the money, that saved us 3 to 4 cents," Brown told Doty, "That penny and a half didn't amount to [expletive] to me, John. So it's time for this unified union school budget to stand on its own. Present a budget that's real. You don't have the revenue for the town. Present a budget that's real. It's even stronger to go against the state and say, 'This is what we're spending, this is what we're getting. Your mechanism at the state is wrong.' And we can't keep sweeping money in from the sides. Our education isn't getting better, as hard as you guys have tried and you're doing a great job as far as you can do with the money you have."
Seth Boyd, former Twin Valley board member and a plaintiff in the suit, said the legality of user fees has been questioned by the state. It happened in Wilmington, noted its town Treasurer Christine Richter.
"I don't think that pitting board against board is useful to the taxpayer," Boyd said, adding that user fees have been beneficial. "I agree communication between the two boards needs to improve. I'm probably one of the board members who have communicated mostly with the Select Board. It's not a welcoming environment. It's not a friendly meeting always. You guys are always pestering about something. But I will say I'm one of the people who are sticking my neck out for this lawsuit, too."
His daughter Sadie who is a student at Twin Valley, a taxpayer and the town of Whitingham are also plaintiffs. They "are asking for an injunction against the aspects of the education funding and property taxation systems that they allege are unconstitutional, and believe that the changes they seek will benefit students and taxpayers not only in Whitingham, but across Vermont," according to a press release issued late last year.
Like last year, school officials had to explain why tax rates look the way they do.
Whitingham will see a 3 percent reduction if the user fees are added or a 0.49 decrease if not. Wilmington residents should see a 12 percent increase in their school tax rate this year. For context, someone with property worth $150,000 would pay an additional $315 in school taxes this year, according to Richter.
This year's big increase in Wilmington has to do with a piece of the funding formula that the lawsuit alleges is unfair. The town's common level of appraisal "dropped again considerably," Windham Southwest Supervisory Union Business Manager Karen Atwood told the Reformer, referring to a calculation used to ensure fair market value is taken into account when setting property-based tax rates. "And with the [Act 46] consolidation, we knew both sides would have to level out. So it's the averaging of the two schools."
She expects to see the two rates leveling out "as time goes on."
"Essentially, our budgets were level funded," Twin Valley School Board Vice Chairwoman Kathy Larsen told meeting attendees. "There were no cuts [to services] made this year."
An approximately $55,000 increase for grounds and maintenance is attributed to buying a new boiler at the high school and an upcoming purchase of another boiler for emergency repairs. Special education costs have also decreased due to state aid and reimbursements.
Richter said the budget will require a second vote if the user fees are not added from a vote on the floor.
The Vermont Legislature's House Way and Means Committee is looking at an income tax proposal. The goal, according to committee documents, is to "reduce reliance on the residential property tax by moving to a tax that is more closely related to ability to pay; more closely link decisions on school budgets to the actual homestead tax paid; move to a simpler system by shifting from income sensitivity for the majority of taxpayers to a direct school income tax based on adjusted gross income; provide for greater transparency by separating the municipal and education tax bills and by creating a separate municipal rebate program; continue to assist low-income resident and property owners by creating a homestead exemption, using a progressive tax structure for the school income tax and retaining the renter rebate program consistent with the requirements set out by the Vermont Supreme Court in State versus Brigham; change the way homestead property tax rates are calculated to create a stronger connection between spending decision and tax rates [and] strengthen mechanisms for cost containment," according to committee documents.
The proposal does not create a new funding formula but it offers a new way to generate revenue for the state's Education Fund, noted Wilmington Select Board member and state Rep. John Gannon, D-Windham-6.
The effort "should be commended," state Rep. Laura Sibilia, I-Dover, wrote in an email to constituents. "I am concerned that this proposal doesn't address the current lack of accountability to businesses and non-residential taxpayers, that it doesn't address the substantial inequities that exist for our students, and I am deeply concerned that the cost containment measure will add insult to injury for rural students while failing to capture significant needed savings throughout the system. Nonetheless, I am listening and looking for opportunities to make positive changes for students and taxpayers."
Gannon said a "rural weighting study," which he and Sibilia pitched to help rural schools with budgeting challenges due to the education funding formula, is included in a special education bill this legislative session. He believes the study could lead to changes to the formula.
There is no bill yet for the income tax proposal.
Reach staff writer Chris Mays at firstname.lastname@example.org, at @CMaysBR on Twitter and 802-254-2311, ext. 273.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.