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ACSD schools see benefits of Act 46: Six towns could see tax rates fall

MIDDLEBURY — The Addison Central School District Board on Tuesday agreed to ask Middlebury-area voters to authorize approximately $37.3 million in spending to cover the combined operating costs for all of the district’s schools during the 2017-2018 academic year.
The $30,428,802 portion to be raised by taxes represents a 2.17-percent decrease in the amount budgeted for education spending in the nine schools in the union this year.
The board made that decision following an hour-long debate on how much of the unified district’s combined $963,441 in unspent fund balance should be set aside for repairs and upgrades to school properties, and how much of it should be returned to taxpayers to reduce the tax-impact of the budget.
Board members, in an 8-3 vote, decided to return roughly half of those funds to taxpayers and place the balance ($481,720) into a capital improvement fund.
This is the first year of global budgeting for the new, unified ACSD. Addison Central voters last year agreed to consolidate their education governance under one board to preside over all of the district’s schools and operate them all through a single spending plan.
The global ACSD budget is intended to cover the anticipated, fiscal year 2018 expenses for Middlebury Union middle and high schools (also known as UD-3), and the elementary schools in Bridport, Cornwall, Middlebury, Ripton, Salisbury, Shoreham and Weybridge.
The budget’s impact on ACSD residents’ tax bills is calculated based on a rather complicated state formula.
The tax-affecting portion of the budget ($30,428,802) is divided by the number of equalized pupils in the district (1,767.52), to produce an education spending amount of $17,215 per equalized pupil. That amount is then divided by a property tax yield number calculated by the state at $10,076, producing an “equalized district tax rate” of around $1.70 per $100 in property value.
Addison Central, because it participated in an accelerated process for merging its school governance under Vermont’s Act 46, will receive a 10-cent reduction in its education tax rate for fiscal year 2018. That reduction, combined with the $481,720 in surplus fund the ACSD board has agreed to use for property tax stabilization, translates to a district-wide education tax rate of $1.608. Returning all $963,441 of the surplus to taxpayers would have yielded a district-wide education tax rate of around $1.58.
But we’re not finished yet. The $1.608 district rate must also be measured against the Common Level of Appraisal (CLA) rate in each of the seven ACSD-member towns.
The CLA is an equalization ratio used to adjust the assessed value of property within a municipality to its estimated fair market value. Each municipality’s CLA is used to calculate its actual homestead and non-residential education property tax rates. So a community’s education tax rate can fluctuate substantially depending upon its CLA.
Here’s how the current budget would affect the local education property taxes of the seven ACSD towns, based on current Common Level of Appraisal information and using $481,720 of the fiscal year 2016 surplus for tax stabilization:
•  Bridport’s rate would decline from the current $1.82 to $1.580.
•  Cornwall’s tax rate: $1.598, down slightly from $1.60.
•  Middlebury’s tax rate: $1.843 — an increase from $1.81.
•  Ripton’s tax rate: $1.802, down from $1.92.
•  Salisbury’s tax rate: $1.632, down from $1.73.
•  Shoreham’s tax rate: $1.596, down from $1.66.
•  Weybridge’s tax rate: $1.757, down from $1.94.
The numbers could change if the Legislature changes the state portion of education funding.
DEBATE ON SURPLUS
Board members on Tuesday shared differing opinions on use of the surplus money. Some, like Middlebury representative Ruth Hardy and Ripton representative Perry Hanson, advocated returning all of the fund balance to taxpayers — some of whom are on fixed incomes. Hardy noted district officials sold the governance unification plan to Middlebury voters based in part on the promise of a property tax decrease. The current budget calls for a 3-cent increase in that town’s education property tax rate.
“I cannot represent all of our towns knowing that most of our towns get tax reductions in the first year, and Middlebury doesn’t,” Hardy said. “The vast majority of our taxpayers will not see a reduction in their taxes with the budget we have now. And I don’t think that’s responsible for us to do in the first year.”
Hardy instead suggested the board cut the budget proposal, pointing specifically to central office administration costs.
Middlebury representative Jason Duquette-Hoffman said he believed the district should do a better job accounting for its budget request.
“If we don’t like what we’re spending, let’s either cut the budget or let’s plan on cutting the budget going forward in the future, but for this board to use what are essentially tricks of the math, is disingenuous,” Duquette-Hoffman said.
Other board members argued none of the $963,441 should be returned to taxpayers.
“I think we are going into a period of uncertainty, both around what the consolidation is going to do and what’s going to happen at the federal level around education funding, and what’s going to happen at the state level,” Middlebury representative Steve Orzech said, referring to Vermont Gov. Phil Scott’s inaugural message in which he encouraged greater investments in pre-kindergarten and higher education.
Orzech noted the ACSD is maintaining a contingency fund amounting to 2 percent of its budget, which he believes might not be enough to react to possible changes in the education system.
“To refund all (of the surplus) seems extremely risky,” Orzech said. “I think we should hold onto all of it until the dust settles.”
Some ACSD residents and members of the local business community agreed with Orzech’s position. They argued the district should use all of the fund balance to make fixes and upgrades to the many school buildings that now fall under the ACSD umbrella. District Business Manager Josh Quinn said he has a list of $4 million to $6 million in capital projects for ACSD schools, ranging from window replacements to paving.
Former UD-3 school board Chairman Leonard Barrett of Bridport urged ACSD officials to use the entire surplus for capital improvements.
“I’m passionate about not turning that (money) back,” said Barrett.
Middlebury selectboard Chairman Brian Carpenter, the CEO of Champlain Valley Equipment, calculated he would save around $1,400 if the entire surplus was used for tax stabilization. He believes that money would be better spent on school facilities — including, some day, a turf field for ACSD student-athletes.
“That’s just one of the things I’m sure you’re faced with on a continuous basis,” Carpenter said of capital requests. “You have some money in a fund right now. I think it would be short-sighted to return that to the taxpayers, because you don’t have an opportunity to get that back in the future. It won’t be something you can sustain over a period of time. It’s a one-time shot.”
Jim Foster of Foster Brothers Farm agreed.
“I think you need to take this money and prevent greater (capital) expenditures down the road,” Foster said.
In the end, a majority of the board went for a compromise, to use half the surplus for capital needs and half for tax stabilization. The ACSD budget will be voted by Australian ballot on Tuesday, March 7.
Reporter John Flowers is at [email protected].

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