Act 46 challenges ANwSU to unify, control spending

VERGENNES — Addison Northwest Supervisory Union officials have just begun grappling with one key provision of Act 46, unification, but another challenge looms — spending caps.
ANwSU elementary school boards this week made final their picks for a 15-member Act 46 Study Committee that is charged with studying unification. By December the group must come up with a plan that officials hope can be on the Town Meeting Day ballot in the five district communities of Vergennes, Ferrisburgh, Addison, Panton and Waltham.
Unification would come with larger benefits than the last time ANwSU residents voted on the question, including a 10-cent break in property tax rates in the first year of unification and retention of Small School Grants that could help Addison Central School keep its doors open.
That committee will meet for the first time this coming Monday at 6 p.m. at Vergennes Union High School, and its members will be seeing a lot of each other, said ANwSU Superintendent JoAn Canning.
“It’s a tight timetable,” Canning said. “We’re going to have to have several meetings in each of the months between now and December so that the committee’s last meeting in December will just be putting the finishing touches on the proposal. And then it goes to the State Board of Education in January.”
But Canning said unification is not the silver bullet for ANwSU’s school budget and property tax issues, especially at VUHS, where before 2014 erroneous accounting for special education created a huge deficit.
Act 46 also caps how much schools can increase their per-pupil spending. Ferrisburgh and Addison central schools and VUHS are all in the top 100 in Vermont in per-pupil spending, and those school boards will be facing tough limits when they try to come up with budgets this fall.
The penalty for exceeding the limits is a dollar-for-dollar charge the state will add to local schools’ taxes.
Canning said the job will not be easy.
“I have not talked with the boards about this yet, and that’s going to come this fall when we’re rolling out our budget calendar,” she said.
The issue is complicated when schools not only cannot increase spending, but also lose revenue because fewer students will attend — revenue is attached to the number of students at schools.
VUHS could be hit hard. The current student count at VUHS is 490, according to VUHS figures. Canning said 88 students will graduate in 2016, and between 71 and 75 seventh-graders are expected next fall.
The per-pupil spending threshold for VUHS before the dollar-for-dollar penalty will be enforced is $16,742.50. The most VUHS will be allowed to increase its per-pupil spending before the penalty is $223.80.
Numbers are not exact because not all pupils are counted the same way, and the state uses “equalized pupils” to determine its final numbers. But assuming a decrease of 15 students, the per-pupil allowable spending increase for the 2016-2017 school year would be $106,305, or 475 times $223.80,
At the same time, the lost revenue could be around $250,000: 15 times $16,742.50 equals $251,137.
Given that the school is paying construction bonds and retiring the special education debt and has already reduced its teaching staff by about the equivalent of seven fulltime teaching positions in the past two years, Canning said the VUHS board has its work cut out for it.
“We’ve had to make pretty significant reductions at the high school over the course of two years, and it looks like we’re going to be really challenged,” she said.
For the other schools:
•  Ferrisburgh Central School enrollment of 173 is expected to decline slightly, but the numbers are not exact. The threshold per-pupil spending number is $15,733.41, and the maximum allowable per-pupil spending increase before the penalty is $200.38. 
Without adjusting for equalized pupils or for any decline in student count, a maximum 2016-2017 spending increase would be about $34,700 before the penalty kicks in.
•  Addison Central School’s enrollment of 71 is expected to be stable. The threshold spending number is $15,418.47, and the maximum allowable 2016-2017 per-pupil spending increase before the penalty is $214.26. 
Without adjusting for equalized pupils or for any change in student count, a maximum increase would be about $15,000 before the penalty kicks in.
•  Vergennes Union Elementary School’s enrollment of 251 is expected to drop; the school is not high on the spending list. The threshold spending number is $14.057.35, and the maximum allowable 2016-2017 per-pupil spending increase before the penalty is $304.48. 
Without adjusting for equalized pupils or for any drop in student count, a maximum increase would be about $76,000 before the penalty kicks in.
Canning does expect declining enrollment to be an issue at FCS and VUES come budget time.
“The not-so-good news is that it is declining,” Canning said. “If last year is any indication, we’re also losing equalized students, so that’s also going to have an impact.”
Unification could soften the tax impact, if approved, at least in 2017, although Canning said boards should not assume even if a unified union passes this time around it would solve ANwSU’s budget and tax problems.
“I am not telling boards that unification is the panacea around these caps. It’s not. For me, we could get some reprieve,” Canning said. “If we do something, it’s going to mitigate, it’s going to soften the blow. But it’s not going to take that pressure totally away.”
Unification incentives that are possible under Act 46 include the following, assuming district voters back a state-approved new structure before July 1, 2016:
•  Decreases of 10 cents on the education property tax rate during the first year of the governance merger, followed by 8 cents in year two, 6 cents in year three, 4 cents in year four, and finally, 2 cents in year five.
•  A “transition facilitation grant” of $150,000.  
•Retention of Small Schools Grants, which will instead be known as the “merger support grant.” A supervisory union that doesn’t embrace Act 46 will lose its Small Schools Grants.
The ANwSU Act 46 Study Committee (see sidebar for members) will get help from recently retired Vermont School Board Association Executive Director Steve Dale. He will help lead the process, which will include at least two or three public meetings, Canning said.
She is optimistic the committee will do good work.
“It’s a combination of community people and board people, and some new people who have not been part of the work in the past, and some people who were part of the work,” she said. “I think if history can teach us anything, we’re going to need some people with perspective, and then also others who have not had that experience for a fresh look at it.”
Andy Kirkaldy may be reached at [email protected].

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