School spending thresholds might undergo “tweaking”

MONTPELIER – Spending thresholds for school budgets might undergo some “tweaking,” but a repeal seems unlikely.

Members of the House Education Committee on Wednesday expressed reservations in repealing a provision of the state’s school district merger law intended to curb spending, but were open to making changes to the threshold formula.

The committee – which, during the last legislative session crafted Act 46, which seeks to merge school districts with the goals of reducing costs and expanding educational opportunities – took testimony from a host of education experts who spoke in opposition to a provision intended to cap education spending statewide at 2 percent for the next two years.

“The provision was put in because of the widespread agreement that property taxes are burdensome to Vermonters,” said Committee Chairman David Sharpe, D-Bristol. “I’ve heard widespread concern that it won’t put downward pressure on property taxes because they (the districts) will be forced to spend above the threshold and will be forced to spend more in property taxes.”

NEA-VT Executive Director Joel Cook addresses the House Education Committee

Josh O'Gorman / Vermont Press Bureau

NEA-VT Executive Director Joel Cook addresses the House Education Committee.

The spending threshold formula looks at a district’s per-pupil spending and compares it to the current fiscal year’s statewide average of $14,096. High-spending districts are allowed less growth than low-spending districts.

Killington, for example, which is spending $17,153 per student, is allowed to increase its budget by 0.65 percent, with any spending above that amount triggering a financial penalty for tax payers. Barre City, which is spending $11,471 per student, could increase its budget by 3.7 percent before triggering a penalty.

A complete list of spending thresholds for every district can be found here.

However, during the next few months as they build their FY 2017 budgets, every school board will have to contend with a projected 7.7-percent increase in health insurance costs, which will make it challenging for many districts to remain under the spending thresholds without making deep cuts that will impact students in the classroom.

“The affordable growth threshold hits all districts, those below average and those above average. It is bad for our children and their education and it is bad for taxpayers,” said Joel Cook, executive director of the Vermont-NEA, who called for a repeal of the spending thresholds. “It is simply unfair to punish school districts and their employees, and our children, for necessary spending.”

Nicole Mace, executive director of the Vermont School Boards Association, and Jeff Francis, executive director of the Vermont Superintendents Association, said the spending thresholds come at a time when school districts are working hard to comply with the merger provisions of Act 46.

Jeff Francis and Nicole Mace address the House Education Committee.

Josh O'Gorman / Vermont Press Bureau

Jeff Francis and Nicole Mace address the House Education Committee.

“Our associations believe that the allowable growth percentage is flawed public policy, the application of which will create instability that could jeopardize local efforts to implement the governance provisions of the act,” Mace said.

“It’s a big distraction,” said Francis, who said he has heard from 40 superintendents who have expressed concern with the spending thresholds. “I don’t think it’s constructive to what we are doing overall.”

Rep. Kurt Wright, R-Burlington, said lawmakers are “frustrated” by a seeming inability to cap education spending.

“Every property tax proposal, there’s a reason not to do it,” Wright said. “We’ve heard from property tax payers that something needs to be done, but there isn’t a lot that can be done.”

Wright said that, barring any other proposal, he was reluctant to repeal the spending thresholds, but he would be open to making changes to the formula. One idea batted around Wednesday afternoon involved excluding spending related to the increased insurance costs from the threshold formula, which would give districts some breathing room.

However, no member of the committee expressed a desire to repeal the thresholds altogether.

“I don’t think we should delay or repeal the spending thresholds, but some tweaking might be in order,” Sharpe said.

Any action by lawmakers to change the formula would have to come early in the session, which begins in January, because school districts have to finalize the budgets they will present to voters by the end of the month.

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