High school student Aubrey Fadden of Enosburg Falls works with third-graders at the Richford Elementary School on Friday, Jan. 27, 2023. Photo by Glenn Russell/VTDigger
More than 100 school district budgets in the state have passed this year, but at least six still need voter approval, according to the Vermont Superintendents Association and the Vermont School Boards Association.
Those half-dozen are quickly approaching a July 1 deadline, at which point districts face a slate of rarely used state laws.
Most years, the vast majority of school budgets pass on the first go. But this Town Meeting, voters rejected nearly a third of the 93 budgets considered that day, a historic proportion.
Voters have expressed dismay at the anticipated increase in education property taxes, now projected to rise by an average of 13.8%, due in part to a proposed increase of about $180 million in school spending.
On Tuesday, voters in Hartland, the Mount Abraham Unified School District and the Otter Valley Unified Union School District all approved school spending proposals.
Those “yes” votes reflect a trend in recent weeks, as more budgets have passed on their second or third attempts.
Yet for the districts still without voter approval — Alburgh, Barre, Barstow, Enosburgh-Richford, Missisquoi Valley and Slate Valley — the July 1 deadline looms.
What happens on July 1, explained
The rules change after June 30.
Late last month, the state Agency of Education issued guidance for school districts still without approved budgets by that deadline.
Districts receive their primary education payments from the state — the money based on their voter-approved per-student spending — three times per year, on Sept. 10, Dec. 10, and April 30.
The state also sends out “categorical aid” for specific purposes — such as special education, transportation and technical education — throughout the year.
For districts without budgets, the state still provides categorical aid and some other money — a fraction of what the state calls a “base payment.” Such districts receive base payments based on the number of students they serve.
For an average district, the base payments are typically less than what would be received if the district passed a budget. But for low-spending districts, the base payments can be more than they’d receive if they had approved spending plans.
If a district is yet to pass a budget, local property owners would pay the lowest tax rate possible — $1 — adjusted by the local common level of appraisal, the municipal-level metric used to make tax rates fair from town to town. Once a district passes a budget, future tax bills would make up the difference, according to the agency.
Without voter approval, districts are allowed to borrow money in order to operate with a budget up to 87% of their last passed plan. The money a budgetless district receives from the state — base payments and categorical aid — contributes to that 87%. So, if a district has already received more than 87% of its last passed budget, the district can’t borrow any money under the rules governing the July 1 deadline.
At Gov. Phil Scott’s weekly press conference on Tuesday, Zoie Saunders, Vermont’s interim education secretary, said she thought her agency’s guidance had been “quite helpful in terms of explaining the variables at play.”
“But our team is continuing to provide technical assistance, answering questions,” she said.
Morgan Daybell, president of the Vermont Association of School Business Officials and business manager for the Franklin Northeast Supervisory Union, said the agency’s proactive guidance had assuaged some concerns for school leaders. One of Daybell’s districts, Enosburgh-Richford, is among the handful still without budgets.
While initial confusion has diminished, Daybell said some districts are worried about paying the bills this summer without a budget.
“There is an immediate concern about meeting July and August payroll,” he said.
Because districts don’t receive education payments from the state between April and September, it’s “fairly common” for districts that lack cash reserves to use lines of credit to pay the bills in the summer, according to Daybell.
“The problem is, when you don’t have a budget, the banks are not really willing to loan,” he said. “Some districts, we’ve been working at — when you have money left over at the end of the year — asking the voters to put it into a capital reserve or some other reserve fund, so you have that sort of sitting in the bank that you can draw down for those first two months if you need to.”
While cash flow could prove an issue, Daybell thinks the bigger issue for districts without budgets is getting a budget approved.
“I think where many of us have now landed is, there are systems in place to keep schools running,” he said. “They may not be ideal, but they’re going to work.”
In the Slate Valley Unified School District, voters will consider a fifth budget next week.
Superintendent Brooke Olsen-Farrell is in a rare class of district leaders: She’s led a district past the July 1 deadline without a budget before.
In 2020, in the midst of Covid, Slate Valley failed to pass a budget until August, Olsen-Farrell recalled.
“The buildings were shut down, so we weren’t doing any of those extra things anyway,” she said. “We didn’t have the same financial obligations.”
This year the district has already begun cutting summer programming, including a summer orientation for seventh graders, according to Olsen-Farrell. Fall coaching, department head and teacher leader positions all remain on hold while the district works to pass a budget.
“If we don’t have a budget by July 1, we’re not going to move forward with anything that’s not essential,” she said.
In Vermont’s statewide education system, spending decisions across the state affect tax rates everywhere. And with the vast majority of budgets set in stone, cutting local spending now can only affect property taxes so much.
Slate Valley is in the lowest 10% of spenders and has the fifth-poorest student body, according to Olsen-Farrell.
“Money does matter. It doesn’t guarantee outcomes, but it absolutely matters,” she said. “I also understand the taxpayers’ concerns about affordability.”
Read the story on VTDigger here: What happens if Vermont school districts can’t pass budgets by July 1?.