Op-Ed: Assessing the Harwood Union school budget
February 14, 2024 | By Karen HornHow will you assess the current proposed Harwood Union Unified School District (HUUSD) budget of $50.8 million? The budget represents an increase of 11.94% as of this writing.
What will be the impact on your wallet? The table in the Waterbury Roundabout article two weeks ago showed education property taxes going up between $316 and $509 per $100,000 of value, depending upon the town in which you live. Changes in the state funding formula currently in progress in new legislation in Montpelier will mean those rates go much higher unless the school board revises its Jan. 31 budget proposal to the voters. The board is meeting tonight, Wednesday, Feb.14.
Figuring out what it all means for you is vital, as your vote on the school budget is your voice, connected to your education tax bill, and the only way the General Assembly will hear your concerns. We are fortunate in Vermont, and unusual across the country, in that citizens have the right to vote on the school budget. What will be your vote?
2024 is a perfect storm for school budgets. The cost of education has clearly outstripped the capacity of Vermonters to pay. Equally clear is that Vermont’s education funding system is broken. An indication of the chaos the current year’s changes is creating, is that the legislature is considering amending phase-in mechanisms for new pupil weighting systems for this year’s school budget votes, without being able to estimate what the outcome of those changes might be for the cost of education in Vermont. H.850 was introduced on Friday, Feb. 9, and is being reviewed and voted on in the House this week.
What changes are creating that chaos? “Pupil weighting” legislation is taking effect, bollixing up education funding expectations. The number of pupils continues down. Federal funding that supported new mental health initiatives and a return to in-person learning is evaporating, yet the needs remain. Universal school meals are being funded out of the Education Fund at a cost of $29 million for the first time this year. Your property tax will reflect the state assessment of fair market value in your town (see CLA below).
In 2021 -2022, whereas the average expenditure per student nationally was $15,368, Vermont had the third-highest per-student expenditures in the country ($25,053) behind only New York and the District of Columbia (National Education Association, 2023). Yet, there is very little discussion about how to address the expense side of education in Vermont.
HUUSD’s proposed budget
HUUSD’s $50.8 million proposed school budget is part of the storm. Our district educates 1597 students in K-12 and 218 in pre-K today. In 2014, ten years ago, the Harwood Union Unified District had 1893.82 “equalized pupils” according to the Agency of Education School District Data Tool.
Every year the legislature adds to the requirements for school curriculums, facilities, accommodations and services, such that our schools now also act as social service and mental health agencies in addition to customary education obligations. Complying with those accumulating mandates makes the jobs of staff and board members extraordinarily tough – and hugely expensive. Salaries, health insurance, loss of federal funding for essential social services, all increase the cost of educating our 1815 Pre-K – Grade 12 students.
Reappraisal | grand lists | your property value
Every town in our district is under state orders to reappraise its property grand list to reflect fair market value. In the meantime, the Department of Taxes estimates what your town’s fair market and grand list value should be. The mechanism they use is the Common Level of Appraisal (CLA). In our district, the state estimates that property values are anywhere from 66.07% of fair market value (Waterbury) to 71.01% (Fayston). The CLA “true-up” is reflected in the education property tax you pay. Upon a completed town-wide reappraisal, the assessed fair market value of your residential property is going to go up – a lot. And as every property owner knows, a higher assessment does not mean more money in your pocket.
Calculating budgets & pupil weights
In July 2024, Act 127, which in 2022 established new pupil weighting requirements, begins to phase in. Weights are applied based on students’ grade level, economically deprived backgrounds, English language learners, as well as low population density districts and small schools in sparsely populated districts. The state uses pupil weights to adjust student counts (establishing the – new this year – long-term weighted average daily membership for districts) and establish the tax capacity of a school district. The new long-term weighted averages, the resulting tax capacity and your local school district spending will be used to determine the education property tax rate – what you will need to pay. For a home valued at $300,000 in the Town of Moretown, education property taxes are slated to increase by $987 based upon phasing in pupil weighting, CLA adjustments, and the HUUSD proposed budget (as of Jan. 31).
The Vermont legislature established an income sensitivity system years ago to help people in certain income categories pay education property taxes on their homesteads. Historically, approximately two-thirds of Vermont households have been eligible for income sensitivity or what is now called the property tax credit. If you pay property taxes based on income sensitivity, you still pay and your education property taxes will go up year over year. Income sensitivity reduces but does not eliminate education tax obligations.
Your property tax credit (income sensitivity) is based on your income and the value of your homestead. Households with incomes under $90,000 may claim a property tax credit on the first $400,000 of their equalized house site value (see CLA). Households with incomes above $90,000 may claim a property tax credit on the first $225,000 of their equalized house site value. There is no income sensitivity available on the value of a homestead that exceeds $400,000. When properties are reappraised due to the current inflationary market and reappraisal orders, a lot more properties will exceed that $400,000 threshold than do today. Did your income go up? Maybe. Will your property assessment go up? Yes. If you qualify for the property tax credit today, your property tax credit will cover a far smaller portion of your entire property tax bill in the future.
Vermont’s Education Fund
The state Education Fund has a number of revenue sources including the sales tax. Property tax dollars make up two-thirds of the Education Fund and when other revenues fall short of the amount needed to pay for voted school budgets, the education property tax fills the gap.
As we see in the proposed HUUSD budget, as a phase-in, for five years there is a 5 percent cap on homestead property tax rates that would result from pupil weighting if overall spending in a district has not increased more than 10 percent. H. 850, the bill being debated this week, would change that phase-in mechanism. The Education Fund will pay for the phase-in, an estimated $30 million new obligation. And education property taxes are the revenue that covers two-thirds of the Education Fund. So you will be paying – possibly not as much and possibly not as directly.
As a recently retired middle-income Vermonter, I believe I have no choice but to vote no on this year’s school budget. What will be your vote?
Here are links to helpful resources from the Vermont Joint Fiscal Office:
More on the new pupil weights in Act 127
Karen Horn lives in Moretown.