Finding 'middle ground' with Act 46's spending limit
BRATTLEBORO — There's "a real split" in the Vermont House of Representatives when it comes to a spending limit included in Act 46, says House Speaker Shap Smith, D-Morrisville.
"There's a pretty significant group of people who would like to repeal the threshold entirely but there's also a significant group of people who don't want to do anything," he said. "We're trying to find some middle ground that will satisfy more people. It's not going to satisfy everyone for sure. Right at the moment, the balance I'm trying to find is, 'Can we fashion some kind of compromise to get through the House?'"
On Thursday, the House Committee on Ways and Means voted to increase the limit by 0.09 for all Vermont school districts as school boards prepare fiscal year 2017 budgets to present to voters in March.
"The expectation is that it will be up for action on Tuesday," said Smith. "This is meant to create some middle ground, to get something through that will address the health care costs." Earlier in the week, a similar vote was made by the House Committee on Education.
The idea is to assist school districts with the 7.9 percent increase in health care premiums.
Any district going over its individualized allowable growth amount provided by the Agency of Education will be taxed doubled for each dollar in excess of it. Each district was given an allowable growth percentage based on the previous year's spending for each pupil. The limit allows for 2 percent growth but school districts have different percentages due to it being based on equalized pupil counts, which come from districts submitting their enrollment numbers in the fall. The state then determines an average daily membership for each district using data.
The proposed tweak to Act 46 would keep some school districts from being penalized, Smith told the Reformer, but not all of them. And some districts' tax rates may not increase although their budgets come in above the limit. That's due to the way properties are assessed.
Lawmakers are now facing another hurdle. School districts were given incorrect amounts for per pupil spending, according to VTDigger, and some have already approved budgets to go to the voters. Agency of Education representatives testified in Montpelier, saying they misinterpreted a section of Act 46 regarding the spending limit.
The Brattleboro Town School District is expected to see savings from the state's common level of appraisal or CLA system. But being able to count pre-k students towards their equalized pupil count will help too, since pre-k classes or tuition is now provided through public funding after Act 166 was signed into law in 2014.
"It may not continue," warned David Schoales, a member of the Brattleboro Town School Board speaking on behalf of himself. "Between the 7.9 percent increase for health care and the 2 percent salary increase (for teachers), we could have been under a lot of pressure."
While the budget is "nowhere near" finalization, Schoales said they were looking at an increase smaller than the allowable growth percentage. Last week, a repeal of the spending limit was voted out of the Senate Committee on Education on a 4-2 vote. Asked why he opposes a repeal, Smith said he is trying to find a way to "move this forward to give some communities relief."
"We have competing priorities. We hear from a lot of communities and a lot of our constituents that they want us to try to put something in place that will hold the line on spending on their property taxes." But Smith said he is sympathetic to districts saying the spending limit does not take into account unexpected costs such as the health care premiums. Other uncontrollable factors include special education costs and unexpected changes in enrollment.
In terms of redistricting or consolidation efforts, another goal of the law is to encourage districts to find efficiencies and improve student inequities, Smith called the progress "positive" so far. "I am pleased that so many communities are talking about ways they can do things differently," he added.
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