Act 46: The New Education Law and Effect on Shelburne

By Representatives Joan Lenes and Kate Webb

One thing we heard loud and clear – Vermont communities love their schools and do not want them to change much. Yet, in the face of declining enrollment, escalating costs and the changing needs of 21st century education, change must come. In addition, Vermont is not alone in finding more children coming to school with severe emotional needs or from families in crisis. This has required schools to fulfill a larger array of human service functions in order for children to simply be able to access education.

Act 46, signed into law last week, is designed to move the State toward a sustainable model of education. While this bill was under development, most of the calls coming to us related to property taxes and school funding. Rather than outlining the many quality issues addressed in the new law, we will highlight some of the financial changes of particular interest to Shelburne. These are 1) setting of spending limits, 2) governance changes, and 3) transparency and 4) health care cost for school employees.

Spending Limits: Act 46 sets spending limits for school budgets, with low spending schools allowed more budget growth than high spending ones. A high spending town such as North Bennington would exceed the limit if their budget grew by 0.71%. In contrast, the lower spending modified Mount Mansfield district could grow by 5.53% before hitting the spending limit. Shelburne’s budget could grow by 2.36% or approximately $316,000. A school may spend more, but the amount over the limit will be added to their tax rates.

Governance:Our 120-year-old structure is fragmented and interfering with our ability to address our changing educational needs. Voluntary measures to address this have brought few results. On or before July 1, 2019, two models will exist. The preferred structure is the “Educational District,” consisting of at least 900 students. An alternate structure, for those regions where the preferred might not work well, will be the “Supervisory Union” of at least 1100 students. Both include multiple schools within the district or union.

Here is a potential benefit to Shelburne taxpayers: Act 46 provides incentives for a supervisory union to become a unified school district if it meets specific criteria. Those who act quickly will receive additional financial incentives. Chittenden South Supervisory Union (CSSU) is well positioned to meet these criteria. Over the past decade, CSSU has been slowly moving in this direction, merging contracts, administrative tasks and educational opportunities. It has yet to meet that last criterion for district governance: merging our structure of seven school boards into one decision-making body.

There are advantages to moving quickly. If our supervisory union agrees to this final merger by July 1, 2016 and is operational by July 1, 2017, Shelburne homestead tax ratepayers will receive a property tax rate reduction for five years. This will start at a $0.10 reduction the first year, reduced to $0.08 the next, then $0.06, $0.04, $0.02 in subsequent years until the end. If we wait another year, we miss out on the $.10 benefit and if we miss that deadline, the tax incentives are gone.

Transparency: The ability to understand how tax rates are set and how this relates to votes on school budgets is extremely cumbersome and difficult for most Vermonters to understand. To address this, Act 46 moves to a new system, known as “yield,” which will better reflect how district per pupil spending is connected to our local tax rates.

School Health Insurance: Escalating health care costs continue to challenge school budgets. A report due November 15th will consider a transition to plans offered through Vermont Health Connect or other systems, particularly as measures in the federal Affordable Care Act will render our current system even more budget-busting next year.

As House Education Committee Chair, Dave Sharpe said at the bill signing, “There is much left to do in the areas of licensing, special education, reducing red tape so schools and teachers are free to deliver the quality education we need and they have a passion to deliver.”

Next week, will be our final article for the 2015 session. During the summer and fall, we can be reached at jlenes@leg.state.vt.us or kwebb@leg.state.vt.us.