Home News and Features Taxpayers Defeat Central Vermont School Budgets: Now What?

Taxpayers Defeat Central Vermont School Budgets: Now What?

Photo by John Lazenby.
Facing huge tax rate increases as a result of Act 127’s state education funding changes and other cost pressures (such as a 16.4% increase in healthcare costs), taxpayers in 30 Vermont school districts out of 95 voted to defeat local school budgets on March 5, Town Meeting Day. With a few weeks turnaround time, school boards must balance educational opportunities for students with the burden on taxpayers to draft budgets that will pass revotes in April and May. If a district’s budget continues to fail into the start of fiscal year 2025 on July 1, it will operate on 87% of its fiscal year 2024 budget.

The turmoil follows Act 127, passed by the state legislature in 2022, which aims to improve equity in student weighting and funding formulas across the state. As school districts drafted budgets this winter, a major problem arose with Act 127.

The state education fund was used to help districts that lost revenue from the new student weights through a 5% tax cap, but the cap was surprisingly available to all districts, including those benefitting from the changes. Some districts increased spending to gain “free money,” putting additional pressure on the education fund and tax rates. Legislators passed a bill, H.850, late in the budgeting cycle that removed the 5% tax cap that had applied to all districts and instead installed a tax reduction just for towns disadvantaged by the law. 

This table shows the projected school tax bill on a Montpelier home assessed at $370,000, depending on income, if the latest proposed Montpelier Roxbury Public Schools District budget passes April 30. $370,000 is the median home value after the Montpelier reappraisal. Notes: These figures are estimates that could change depending on legislative decisions by the end of the session. According to school board figures, all $370,000 Montpelier homestead owners with incomes above $128,000 would see a 13.84% school tax increase if the latest budget passes (Roxbury homestead owners with such incomes will see a 3.59% increase). Property owners with household incomes from $90,001 to $128,000 pay based on income on the first $225,000 in value of their home. Property owners with incomes from $47,001 to $90,000 pay school taxes on income on the first $400,000 in home value. Property owners with incomes of $47,000 or less have their school taxes capped at 2% of income. The municipal tax on all properties assessed at $370,000 will be $3,444 in FY2025 regardless of income, except that those with incomes below $47,000 are capped at 3% of income. For example, a property owner of a $370,000 house with income of $45,000 will pay a municipal tax of $1,350 instead of $3,444.
But the changes actually increased the taxpayer burden in some disadvantaged districts such as the Montpelier Roxbury Public Schools (MRPS), and came in late enough that many districts sent their budgets to the voters without changes. The fallout: about one-third of Vermont’s school budgets failed, including the budget for MRPS. School officials have called it unlikely that legislators will find more revenue for the education fund to reduce the tax crunch.

School districts set budgets, which are partly funded with a statewide property tax. Final tax rates are calculated using the dollar yield, a number the Legislature finalizes in May. This year the projected sharp increases in projected tax rates have led to frustration both for districts and the Legislature. Governor Phil Scott said in a March press conference that Vermont may need to give the state more control of school spending and to consolidate small schools.

After the MRPS budget defeat, the school board decided to save money by closing the Roxbury Village School at the end of the school year and making some cuts to Montpelier schools, resulting in a proposed Montpelier tax rate increase of 13.84%, down from the projected 24% increase in the defeated budget. The status of other defeated central Vermont school budgets is discussed below.

Washington Central (Berlin, Calais, East Montpelier, Middlesex, Worcester)

Following the defeated FY25 budget of $43,810,548, a 16.1% increase from FY24, board chair Flor Diaz Smith said the school board will vote on a budget by April 10 to stay on schedule for a May 7 vote. This “is asking for a lot in a very short period of time,” Smith said, adding that the district will skip voting by mail due to logistics and the extra week it gives to discuss legislative changes.

The board is considering lowering the increase to between 10% and 6% through reductions in force (RIFs) and cuts to transportation. For an 8% budget increase, the estimated annual tax rate increase would be between $117 per $100,000 of house value in Worcester up to $302 per $100,000 of house value in Berlin.

Smith said the board could decide 6% is not enough for the schools to “not just serve our kids, but to provide opportunities that each of our kids need.”

“There can be some things that are untouchable, like we have really strict parameters around our capital spending,” which would be a one-time use of money, said Smith.

Like other districts in the state, Washington Central has negotiated higher teacher salaries to remain competitive.

“I don’t even know where to start in my stress about public education in this state right now. As a board member, I’m pretty stressed out,” said Smith. “We have a lot of work to do as a state to set our priorities.”

Barre Unified Union School District (Barre City, Barre Town)

Barre’s defeated $58.9 million school budget represented an 11.6% increase in education spending. The school board considered lowering the increase to 10% while adding tax stabilization funds to reach a 7% total increase.

At the March 27 board meeting, superintendent Chris Hennessey said, “Further cuts to the FY25 budget will impact staffing, programs, and services.”

A 7% increase in education spending equates to an estimated $1.490 tax rate for Barre City ($1.407 in FY24) and $1.314 for Barre Town ($1.214 in FY24), said business manager Lisa Perreault.

Assistant Town Clerk Catherine Whalen said on March 29 the board has not yet chosen a revote date.

”If we were to come in with a 7% increase in education spending, we would be in the bottom 5% of all districts in the state of Vermont, whether budgets pass or fail. That would be very low,” said Hennessey, adding some districts had seen a 20% increase, “some as high as 45%.”

Harwood Unified Union School District (Duxbury, Fayston, Moretown, Waitsfield, Warren, Waterbury)

On March 27, the Harwood board voted for a FY25 $48.8 million budget, $1.9 million less than the defeated $50.8 million budget, with a note of making a “plan C” if it goes down.

“I’m not sure how much lower we can get,” said Ashley Woods, board chair. 

According to Lisa Estler, director of finance, $48.8 million is a “reasonable” 7.63% year-over-year increase, compared to the defeated 11.9% increase. These cuts include three full-time equivalent position reductions, and leave 20% of vacancies unfilled, a “comfortable” wager.

This equates to a projected $1.47 district tax rate. Factoring in the common level of appraisal for homestead values, Waterbury could see an estimated $324 annual increase on a $100,000 home, and other towns in the district range from $250 in Duxbury to $439 in Warren.

Woods said the warned budget and tax information will be sent to the public at the end of April, about 10 days before a revote.

The board is also planning to release fliers to address public concerns. “People lost confidence,” said board member Bobbi Rood, “because they didn’t know what their taxes were going to be, and they didn’t understand this formula.”

“We are at an extremely high cost per pupil compared to others throughout the state,” said superintendent Michael Leichliter. The Harwood Union schools have $60 million in deferred maintenance, adding to concerns for long-term planning.

The board created a finance committee to act over the next five years to find ways to reduce total education spending. This could include closing the elementary school in Fayston, a difficult decision that would require 75% public approval. Leichliter said the district does not have the capacity to absorb those students elsewhere right now.

Paine Mountain School District (Northfield, Williamstown)

Following the defeat of a $23.2 million budget, a 13.8% increase from last year, on March 20 the school board approved a $22.5 million FY25 budget revote for April 16, down to a 10.52% increase. A letter will be mailed out to the community in early April.

Matthew Fedders, Central Vermont Supervisory Union superintendent, said the new budget includes cuts to co-curriculars, operations, and maintenance and has a revenue offset of about $600,000. Cuts to teacher positions could involve moving staff to currently unfilled positions, and are offset by state funding, said Fedders.