VERGENNES — After being thrown a last-minute curveball by state education officials, the Addison Northwest School District Board on Thursday adopted a proposed budget for next school year that would raise the education property tax to five Vergennes-area municipalities by about 5.6 percent.
A majority of those board members present OK’d a 2019-2020 spending plan of $22,139,341 that if approved in March could raise taxes in the five ANWSD communities by about 9 cents.
The board backed that budget on a 4-3 vote after learning at the opening of the meeting that according to state estimates sent to ANWSD on Wednesday the district would have about five fewer students than expected next year. That change means a drop in state revenue of almost $100,000.
And that revenue loss will have to be made up in local taxes. It also means the budget adopted pushed ANWSD per-pupil spending close to a threshold that if exceeded would mean district taxpayers would have to pay a dollar-for-dollar penalty on any further per-pupil spending.
And there are still moving numbers, according to ANWSD business manager Elizabeth Atkins. The yield on the state education tax rate could move tax rates up or down — last year they moved the estimated ANWSD rate down by more than 6 cents long after Town Meeting Day.
And, officials noted, the pupil count is also still fluid — neither would be made final until long after a March vote.
“The timing of all these pieces comes a little later,” said ANWSD Superintendent Sheila Soule.
According to board materials board members are relying on another factor to stay out of the spending penalty. That’s a credit calculated by the state that Atkins explained in a Friday email is so far allowing the district to get under the spending penalty threshold “due to high principal and interest payments on several bonds, combined with excess spending provisions for high-cost special education students.”
The $22.139 million budget the board backed puts ANWSD right on the edge of where the credit can still help the district, Atkins explained in the email.
“The budget adopted puts spending near the limit of that credit, and factors including final pupil count and the homestead tax yield could potentially push the district into a spending penalty, if those figures change from current estimates,” she wrote.
At Thursday’s meeting, Atkins told the board, “If the student numbers change, or the yield changes, we might be in danger.”
Some board members at Thursday’s meeting said the numbers would not necessarily work against the district: They noted the yield helped ANWSD in 2018, and said there was no guarantee enrollment numbers would continue to drop and could even rise.
BUDGET DETAILS, VOTES
The budget calls for an increase of $1.03 million, or about 4.7 percent, over current spending of roughly $21.1 million.
The 2018 budget was approved, 952-551, by residents of Vergennes, Waltham, Panton, Ferrisburgh and Addison in March. Spending came in at $10,000 lower than in 2017.
But administrators and board members said they were unable to hold the line again. They cited the cost of health benefits increasing by 11.8 percent, salaries for teachers and support staff expected to rise once ongoing negotiations for new contracts conclude, and transportation costs going up by 13 percent.
According to board materials, the budget includes staffing cuts: a Ferrisburgh Central School position due to declining enrollment, two full-time positions “through natural attrition,” a VUHS health teaching position reduced to 50 percent due to “consolidation of positions/dual certification,” and two part-time aides.
The board also reduced funds for employee health reimbursement accounts due to lower expected usage, lowered special education travel expenses and funding for after-school programming, and reduced contracted services with the Counseling Service of Addison County due to “declining need.”
The board added a district-wide elementary school health teacher and accounted for higher Hannaford Career Center tuition.
The board had two spending plans to consider on Thursday; one at $22.139 million and the other $22.124 million. Administrators suggested the board did not have to pick the two, at one point offering a compromise of taking $50,000 off one of those proposals and allowing administrators to find savings.
The board then took two votes. Member George Gardner moved to adopt a $22 million budget, which he said would give discretion to administrators to make cuts and also approximated the revenue lost with the new lower enrollment figure.
Gardner and Mark Koenig voted in favor, but Kristina MacKulin, Tom Borchert, Laurie Childers, Laurie Gutowski and George Lawrence said nay.
Childers then moved the $22.139 million plan, and she, MacKulin, Borchert and Lawrence voted yes, with Gutowski, Gardner and Koenig in opposition. Chairwoman Sue Rakowski did not vote.
Four members of the board were absent.
Gardner said he thought the board should start making tough decisions now. He noted that this budget called for a tax increase despite the use of a $430,000 surplus (derived from district-wide savings in special education spending) to offset taxes and the 6-cent tax break due to district unification.
Gardner added ANWSD is likely to lose more students — and revenue — next year.
“When we craft the budget next year we’ve got a real steep hill to climb,” Gardner said.
Lawrence, Childers and Gutowski all said they understood the problems on the horizon, but didn’t believe programs should be cut this year because of them.
“I don’t see the value of slashing the budget now because we’re going to be up against it next year,” Lawrence said.
TAX IMPACT
The final number could move dramatically, as it did last year.
The district wide tax rate for the current year is $1.642 per $1,000 of assessed property value, and the rate would be $1.7405 in the coming year under the proposal that the school board OK’d.
If this budget is approved and a 9.23-cent hike results, most ANWSD homeowners who pay on the full value of their property could be looking at a roughly $90 increase per $100,000 of assessed value, or $225 on a $250,000 home.
That figure does not take into account at what figure the Legislature will set the statewide homestead rate. Those who pay based on their incomes and thus receive prebates, typically at least two-thirds of homeowners in most Addison County towns, would receive rebates and not feel the full impact of any tax increase.
Those figures also do not account for towns’ Common Levels of Appraisal, or CLAs. If a town’s CLA is below 100 percent, its school tax rates are adjusted upward, and if it is above 100 percent those rates are lowered.
The CLAs in Addison, Ferrisburgh, Vergennes and Waltham are all between 100.11 and 102.26 percent and will not move final tax rates significantly. Panton’s CLA is 96.8 percent and will increase the final school-tax rate slightly.
Andy Kirkaldy may be reached at [email protected].