BRANDON — Statewide education funding reform can’t come soon enough for Otter Valley Union High School. Despite the fact that the OV board approved a proposed budget this month with a modest 1.83 percent spending increase, the union Homestead tax rate will increase by roughly 7 cents, or 4.6 percent.
The board on Jan. 7 approved a $10,718,131 spending plan for the 2015-2016 fiscal year, a $192,414 increase over the current spending plan.
Like many schools, OV is taking advantage of the fact that more senior teachers, who are paid more, are retiring to keep spending down. That, coupled with falling fuel prices and an uptick in tuitioned students, plus delaying certain expenses, allowed the board to rein in spending.
But despite what amounts to one of the lowest budget increases at OV over the last decade, the effect on the local homestead tax rate will result in a tax rate increase of roughly 7 or 8 cents, depending on which town served by OV the taxpayer lives in.
OV serves the towns of Brandon, Goshen, Leicester, Pittsford, Sudbury and Whiting.
“It’s devastating,” said OV Principal Jim Avery. “You work to create a budget like this with such a small increase, and you still end up with that kind of tax rate increase.”
Drivers in the budget include a 10 percent decrease in revenues and almost double the worker’s compensation and unemployment costs. Rutland Northeast Supervisory Union Business Manager Brenda Fleming said a spike in the number of claims is responsible for the worker’s comp increase, mostly due to falls on the job.
On the plus side, OV will see 12 more tuitioned students next year, which will add almost $100,000 in revenue. There are eight students expected from Chittenden, one from Mendon, one from Rutland Town and two from Hubbardton.
Vermont’s education spending formula is predicated on the number of equalized pupils at a school, and the number of equalized students dictates the state’s contribution to the school’s budget. And, the more a school district spends per pupil over and above the state per-pupil spending limit, the higher the education tax on homestead property will be.
Like many Vermont schools, Otter Valley has experienced a precipitous decline in enrollment over the last 15 years. In 2001-2002, there were 747 students at OV. In 2011, that number dropped to 580 students. This year, there are 560 students. That’s a total reduction of 187 students, or 25 percent, since 2001.
Each year the Legislature specifies a Base Education Spending Amount per equalized pupil ($9,382 for fiscal year 2015). If a district happens to spend exactly that amount (or less), then the homestead property tax rate within that district will be the statutory minimum (98 cents per $100 of equalized property value in fiscal 2015).
If taxpayers vote to spend more than the Base Education Spending Amount, homestead property tax rates increase proportionally. If a district votes to spend 10 percent more per equalized pupil than the base amount, its homestead tax rate will be 10 percent higher than the statutory minimum.
So, especially in a high school, falling enrollment costs the school state funding. OV’s per equalized pupil spending is projected to rise by $709 per student in the coming fiscal year, from the current rate of $14,453 to a projected $15,162. Fortunately, that is still short of the state’s threshold for per pupil spending, which is now $17,103.
At $15,162, OV will spend 160.299 percent over and above the FY 2016 base per pupil rate of $9,459. Multiplied by the state’s homestead tax rate, the anticipated local homestead tax rate for OV is $1.60 per $100 of property value, 7 cents higher than the current rate of $1.53.
PROBLEMS VS. OPPORTUNITIES
Like other area schools, OV was able to decrease its proposed budget by taking advantage of natural staff attrition due to retirement. Longtime social studies teacher Judy Dardeck will retire at the end of the school year, and the OV board opted not to fill that position, estimating that a new hire would cost $62,000 in salary and benefits. Instead, Avery said, he is reallocating a teacher from another department who is also certified to teach social studies to fill Dardeck’s position, saving the school $62,000.
“We’re continually trying to take advantage of the resources we’ve got,” Avery said. “We’re trying to take a problem and create an opportunity.”
Since 2001, OV has reduced its full-time faculty by roughly 18 teachers, from 58 to 40. The school has also gone from three administrators to two, and reduced guidance office staff from four to three and secretarial staff from five to four.
This year, the OV board has cut $10,000 in hardware spending in the technology department, opted not to pursue a supervisory union-wide network this year for a savings of $11,200, and postponed the purchase of uniforms, saving $10,000.
All told, the OV board cut an additional $98,000 from the budget in December, slashing the spending increase from 3 percent to 1.83 percent.
“It’s because of the decisions that have been made over time that we don’t have to something drastic to keep the budget manageable,” Avery said. “We’re trying to maintain a variety of programs for kids, but everyone is not getting what they want.”