School Boards Face Double Digit Increases In Health Care Costs

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Double digit increases in health care costs are posing a significant budget challenge to many school boards across the state and local school officials are also feeling pressure from Governor Peter Shumlin.

At the beginning of this month, Tax Commissioner Mary Petersen projected that it would take a five cent increase in the statewide property tax rate to meet anticipated increases in local school budgets next year.

This development prompted the Governor to remind local school boards that the tax hike wouldn’t be necessary if they could keep a tighter lid on their spending.

"There are opportunities to do better and if our school boards can instead of going up at the rates of being projected hold their budgets to the rate of inflation which is about 2.2-2.3 percent, that will result in not having to raise the statewide property tax rate five cents."

And in a statement that’s very reminiscent of his predecessor, Jim Douglas, Shumlin said Vermont’s spending on education is on an unsustainable track.

"So I continue to encourage school boards locally and Vermonters to vote very prudently on their school budgets," said Shumlin. "We have a dwindling statewide school population, our costs continue to rise in education faster than our incomes and it’s not sustainable."

Steve Dale is the executive director of the Vermont School Boards Association. For the past few years, increases in health care costs have been quite moderate but he says this year is very different.

"The biggest single obvious pressure is the health care issue. We are expecting at the end of the day that the increase will be double digits and it could be anywhere we hear estimates from 12 to 14 percent, the exact number remains to be seen," said Dale. "And so this will be a real shock to the districts’ budgets."

Many school boards are drafting their budgets right now and Dale says preliminary estimates range from 1 and a half percent increases to as large as 10 percent. "To basically say to every school that you have to stay within a certain level is not a practical expectation because of the different circumstances town to town."

Dale also notes that there are additional pressures on the statewide property tax rate because the state cut $20 million from the Education Fund several years ago and has never restored these funds.

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