Act 68 tax relief may be short lived

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(Host) School officials say they believe that recent changes to Act 60 are responsible for the passage of most school budgets on Town Meeting Day. But some officials are concerned that tax pressures will emerge in just a few years, if a number of issues aren’t addressed by local school boards.

VPR’s Bob Kinzel reports.

(Kinzel) What a difference a year makes. Last year more than 60 school budgets were defeated by voters because of rising property tax burdens. This year only six budgets were turned down and many officials believe the key reason why is Act 68 – a new law that makes some important changes to Act 60.

Act 68 raised the sales tax by one percent and pumped an additional $50 million of new state revenue into education. This helped increase the state block grant by about $1,000 per student.

Despite the positive changes, a number of school officials are very concerned that property tax burdens will be once again be a major issue unless some key issue are addressed in the next few years. Here’s the problem: School enrollment in Vermont is on the decline because birth rates are falling in the state. The number of students has decreased roughly one percent in each of the past six years. This amounts to about 1,000 students per year.

Since Act 60 sends state revenue to towns based on the number of students they have, many communities will begin receiving less money from the state. During this same time, the number of staff positions at local schools increased roughly 20 percent. This is important because salary costs and health care benefits make up roughly 75 percent of most local school budgets.

Edie Miller, who’s executive director of the Vermont School Boards Association, is concerned that the current reprieve from higher property taxes will be temporary:

(Miller) “The point is that the tax relief that we’re getting now that is the result of Act 68 – if current trends continue that relief wouldn’t last very long.”

(Kinzel) Ray Pellegrine, who’s executive director of the Vermont Principals Association, says it’s very hard for schools to reduce expenses when their student enrollment is decreasing:

(Pellegrine) “So as a principal what am I going to cut? Because I lose five kids even if they were in one grade, which they probably wouldn’t be. That’s not going to save me an awful lot in terms of staffing. So in the short term there’s not a lot of impact you can have on your budget based on staffing and so on, based on losing a few kids from your school that’s the difficulty.”

(Kinzel) Why are the number of staff positions increasing at so many schools across the state? Jeff Francis, who’s the executive director of the Vermont Superintendents Association, says greater demands for student assessment is one key factor. And Francis says there’s another:

(Francis) “If you couple that with the efforts around our special education system to provide a high quality education to all kids, which resulted in additions of paraprofessionals to support teachers. Because we have a mainstreaming special education system in the state that translated to the addition of staff.”

(Kinzel) The School Boards, the Principals’ and the Superintendents’ Associations are part of a larger coalition of education groups that’s trying to make local school officials aware of these trends. The coalition is hoping to stimulate discussion about possible solutions to the problem before the situation reaches a crisis point.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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