‘There were some costs to doing that.’
FAIRFIELD — Fairfield voters will be given a third chance to approve a school budget on Saturday. The proposed budget total has been reduced 1.28 percent below the current year’s budget to $5.39 million and is $100,000 less than the budget turned down by voters in April.
The frustration remains in Fairfield however, perhaps best summed up by Michael Malone, school board chair, who, referring to cuts made, said “One hundred-thousand dollars bought us a penny (in tax rate savings).”
Although the budget is down, the tax rate is still up. This time by 20 cents.
On Town Meeting Day, Fairfield voters rejected a budget with a spending increase of 0.62 percent, the smallest in the county, and an anticipated tax increase of 26 cents.
Since then, the Legislature has lowered the increase in the statewide base tax rate from seven cents to four, but at the same time it altered the tax formula in other ways that helped to keep Fairfield’s tax rate increase high.
The budget for Fairfield Center School is a perfect example of the complexities of the state’s education tax formula and the challenges school board members face when trying to keep tax rates low.
The school board has eliminated funding for a bus to bring Fairfield’s high school students to Bellows Free Academy in St. Albans. At a community forum earlier this month, attendees made it clear they considered the bus a prime target for elimination.
The move saved the school $42,000 a year. As a consequence of cutting the bus, the school will lose some state transportation aid, but not until next year, explained school board chair Michael Malone.
The board also cut $45,000 from the special education budget. “We’re reworking special ed., because we had a retirement and we’re not going to replace that position,” said Malone. The board eliminated three paraeducator positions and one teaching position. As a result, remaining special educators will see an increase in caseload. Some special education services may have to be placed under contract outside of the school staff.
Cutting special education spending also means losing revenue, as schools receive partial reimbursement from the federal government for special education. Cutting special education spending means losing $20,000 in revenues.
The board also reduced hours for the school librarian by four hours per week at a savings of $8,000 per year and cut $5,000 for the purchase of supplies and technology.
“We cut $100,000 from the expenditure budget, but there were some costs to doing that,” said Malone.
State tax & appraisals
Although the proposed tax rate is down five cents since the Town Meeting Day budget, four of those cents are the result of the change in the statewide base tax rate. Only one cent is the result of the cuts made by the school board.
Vermont has a statewide school tax system, and the base education rate is set based upon the anticipated amount needed to pay for all of Vermont’s K-12 schools. The funds are paid into the education fund, which then provides funds to the schools.
In Fairfield’s case, the town ultimately pays about 35 percent of the cost of operating its school in property taxes.
The state’s tax commissioner recommends a base tax rate based on an estimate of education spending across the state. This year Commissioner Mary Peterson based her recommendation on an anticipated increase statewide of 3.8 percent in school budgets. There are financial penalties for taxpayers whose schools increase spending too highly and recent changes and the legislature lowered the level at which those penalties will kick in starting next year. However, there are no financial rewards for schools which keep spending increases low.
Indeed, this is the second time in recent years in which Fairfield has a reduced budget and increased tax rate.
“The towns that are responsible are sometimes left holding the buck,” said Malone; or paying it, as the case may be.
In order to insure that municipalities don’t artificially lower their school taxes by keeping the appraised value of property in the town low, the state developed the common level of appraisal (CLA). The CLA is determined by a comparison between the assessed value of homes in the community and the actual sale prices of homes.
If appraisals are at market value, the CLA will be 100 percent. If appraisals are above market value, the CLA will be above one percent, and have the effect of reducing the tax rate. If appraisals are below market value, the CLA will be less than 100 percent, raising tax rates.
If a number of homes sell at above their appraised value, the state concludes the town’s appraisals have fallen out of step with the market and are too low.
In Fairfield, several homes sold above their appraised value, causing the state to lower the CLA by six percent to 95.7 percent. That change accounts for seven cents out of the 20-cent tax increase. If the CLA had remained the same, Fairfield’s projected school tax rate would be seven cents lower.
One of the key factors in determining a school’s tax rate is the cost per pupil. For individual schools, the cost per pupil is determined by taking the schools total proposed spending and deducting projected revenues. The result is called education spending.
Although Fairfield’s proposed school budget is now down from the current year, education spending is still up by $70,000. This is the result of a loss in revenue for special education, which is down by $100,000 from the current year.
To determine per-pupil spending, education spending is divided by the equalized per-pupil count. This number is not the same as the number of students attending the school. Fairfield expects to have 309 students next year, 207 in Fairfield Center School and 102 high school students for which it will pay tuition.
The equalized per-pupil count is higher at 329.03. This is because the state weights students based on their age and level of need. Special education students and older students are weighted more heavily. In addition, the state protects schools from sudden or rapid drops in the equalized per-pupil count, spreading reductions out over several years.
Still, Fairfield’s equalized per-pupil count has dropped by 30 students since 2012. During that same period the school has lost 23 students. However, the school has lost 43 students since 2010.
Trends among the lowest grades in the school are going in the opposite direction, with 28-33 pre-school students anticipated in the fall, according to Malone.
With the proposed budget, per-pupil spending will be $13,980, lower than the state average, but still above the current year by more than $700.
To determine the tax rate, the school’s per-pupil spending is compared to a base per-pupil spending amount set by the Legislature. That amount is tied to the base tax rate, so when the Legislature lowered the base tax rate, it also lowered the base per-pupil spending amount by $97 to $9,285.
That change partially offsets the benefits of reducing spending at Fairfield, because the tax rate is based on the difference between the school’s per-pupil spending and the base per-pupil spending set by the Legislature: the greater the difference, the higher the tax rate.
The Fairfield School Board and the Franklin Central Supervisory Union, attribute six cents of the increase in the tax rate to the reduction in the equalized per-pupil count and two cents to the loss of revenue, which combined to drive up per-pupil costs at the school.