VERGENNES — After rejecting two budget proposals, one decisively on Town Meeting Day and one by just 18 votes on March 26, Addison Northwest School District residents on Tuesday will again make a decision on proposed spending for the 2024-2025 school year.

Polls in each community will be open most of the day, and residents can also vote early in most towns on Friday or Monday.

This time they’ll be deciding on a $27.25 million spending plan to fund the three district schools: Vergennes Union High School, Vergennes Union Elementary School and Ferrisburgh Central School.

It is almost $250,000 lower than the budget that lost on March 26 and $1 million less than the budget put before voters on March 5, but would still increase spending from the current year.

IN A FERRISBURGH demonstration this past Thursday, Lindsey Brown and her two children, 11-year-old Elijah and 8-year-old Aaliyah, tried to rally Addison Northwest School District voters to pass the school budget, with colorful signs.
Independent photo/Steve James

Despite the three dozen Reduction In Force (RIF) notices the district sent out to educators after the previous budget defeat, officials said this plan retains all educational and extracurricular program and positions (except one) proposed in the previous budget.

The proposal would increase spending 7.65% from the current academic year. According to school officials, the main drivers pushing expenses up faster than the rate of inflation (about 3.5%) are new contracts for both teachers and staff that bring their pay in line with neighboring districts, a 16% increase in health insurance benefits, and a 10% increase in busing.

The district tax rate (before adjustments for Common Levels of Appraisals, or CLAs) will actually be lower, however, dropping from to $1.5194 per $100 of assessed property value from $1.5411, or a little more than 2 cents.

For perspective: A penny on a tax rate translates to $10 in taxes per $100,000 of assessed value. Therefore a $300,000 home would see a $60 decrease before the state adjust the rates higher due to communities’ CLAs.

Officials attributed the 2-cent district tax rate change to more special education grants, a small surplus being applied from two years ago, and a revised state funding law that gave some districts, including ANWSD,  a 2-cent break on school tax rates.

ANWSD Board Chair John Stroup urged passage of the plan even though there will be higher homestead school taxes — ranging from almost 10% to about 18%. Despite the lower district rate increase, the higher actual taxes are attributed to the impact of towns’ low CLAs (see details below and in chart).

“The central message is we need a budget to fund our schools,” Stroup said. “Our teachers, or staff, have to have clarity about the kind of programs and the kind of education that we’re going to be able to provide. And our families and our students want to know that the kind of education that they hope for their children will be able to be provided.”

IF BUDGET IS VOTED DOWN

If this budget fails, the district will also send out RIF notices to many non-teaching staff members on Wednesday, as required by a deadline in their union contract.

RIF notices don’t necessarily mean those who receive them will lose their jobs. The problem is that state law limits the district’s spending if it doesn’t have an approved budget before July, and the district must be legally prepared to lay off some employees.

According to the district website, “If we do not have a passed budget by July 1, we are allowed to borrow 87% of the FY24 budget to continue to operate while we try to get a budget passed. This would mean reducing our budget to $22,022,108 — a $5,227,892 reduction from our proposed FY25 budget … The RIF notices are a contingency measure to ensure the district has some flexibility in terms of decision-making if the subsequent budget(s) do not pass..”

School officials said the worst-case scenario would mean drastic reductions of extracurriculars, including sports and other activities, and of course offerings that aren’t required by state standards, such as art, chorus, band and electives. Because of mandates at the elementary level, they said the high school would be hardest hit.

SUPPORTERS OF THE latest ANWSD budget proposal gathered on April 18 at Ferrisburgh’s Union Meeting Hall property on Route 7 to urge others to vote yes on Tuesday. They included, from left, Lindsey Brown and her son, Elijah; Heidi Willette; Carolinne Griffin (in rear); Maggie Rollins and her daughter Lola (a VUHS student).
Independent photo/Steve James

And CLAs would still take their toll even with deeper cuts, officials said. ANWSD Director of Finance and Operations Elizabeth Jennings gave one example.

She offered a scenario of the district operating on the current year budget of $25,312,768, which would mean about another $1.94 million of cuts from the current $27.25 million proposal.

“If we tried to run on the exact expenditure budget we have this year, next year, Ferrisburgh’s post-CLA tax rate is still at an increase of 10%,” Jennings wrote in an email.

CUTS MADE

In preparing the budget proposal for the upcoming vote, the school board included eliminating a building administration job ($124,000) and the expected realization of $94,000 in lower expected special education tuition. The board also applied almost $40,000 from a fiscal year 2023 surplus to lower taxes.

Other reductions:

• $40,000 in technology purchases.
• $50,000 in furniture purchases for the middle and high schools.
• $54,075 by leaving vacant a social worker position.
• $167,332 by cutting a central office position and a halftime reading position
• $250,546 by discontinuing The Walden Project, the high school alternative education program, taking advantage of the retirement of the program head.
• $162,488 by cutting two special education teachers by discontinuing ANWSD participation in the Addison Consortium Program.

HIGHER TAXES

But ANWSD taxes will still rise. It should be noted in any discussion of school taxes that those who pay based on their incomes, about two-thirds of all homeowners, won’t feel the full weight of any increase. During the 2023-2024 fiscal year, 6,951 Addison County recipients received an average property tax credit of $1,634.

Still, because of rapidly rising property values, ANWSD towns’ grand lists are out of date, and thus so are CLAs, which are going to cause increases in ANWSD tax rates.

Why does the state apply CLAs? Essentially, it’s a matter of fairness to taxpayers statewide who pay into Vermont’s Education Fund. State officials use CLAs in an effort to treat all Vermont property owners equally when they pay school taxes.

Using sales data, the state calculates CLAs annually for every Vermont community to adjust the listed value of properties to reflect fair market value as closely as possible.

WITH THE LATEST ANWSD budget in the five district towns coming up for a vote on Tuesday, backers of the board’s proposed spending plan last week posted signs alongside Route 7 in Ferrisburgh to show their support.
Independent photo/Steve James

CLAs are expressed as a percentage: If sales show assessments are low, as is now the case in almost all Vermont towns, that percentage is less than 100. For example, Addison’s CLA is currently 72.35%, down about 10% from its 2023 CLA of 82.8%.

And if a town’s CLA is low, its district tax rate is adjusted upward by dividing the CLA into the rate.

Thus, when the ANWSD district rate of $1.5194 is adjusted by the CLA (1.5194 divided by 0.7235) it becomes $2.10 per $100 of assessed property value.

Addison’s tax rate in the current fiscal year adjusted by its previous CLA of 82.8% was $1.8612.

That means if the current budget is approved, Addison is looking at a 12.8% increase in its homestead rate despite the lower district rate and the 7.65% proposed budget increase. All other ANWSD communities are also looking at homestead tax percentage increases: 9.6% in Waltham, 11% in Vergennes, 17.8% in Panton, and 18% in Ferrisburgh.

Why could this be seen as fair?

For example, look at the owner of a $300,000 home accurately assessed in a town with a 100% CLA.

Meanwhile, a home assessed at $300,000 in a town with a 75% CLA is worth closer to $400,000.

Should those two property owners pay the same in school taxes to the Education Fund even though one home is worth more than the other?

Or should their home values be equalized before tax bills are sent out? State law says they must be equalized.

No matter how one might feel about the answer to that question or the larger question of how Vermont funds its schools, ANWSD homeowners are in the latter boat, caught in a rising tide of property values. See chart for details.

A readable explanation of CLAs is available at tinyurl.com/yc9b8kty.

Stroup said with all this in mind, the board tried strike a balance between doing what little the board can do to control tax rates given CLAs, and offering a spending plan that would still meet student needs.

“This budget still does an awful lot for our community and our schools,” Stroup said. “We’re trying to make sure both parts of this are told.”

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Editor’s note: This story was corrected after it was originally posted. The story illustrated the effect of the proposed school district tax rate for a home valued at $300,000, but, due to an editing error, gave the wrong calculation. It wrongly said the homeowner would see a $30 tax increase, it should have said a $60 tax decrease before CLAs were applied. We apologize for the error.