Passing the School Budget

1. 2008 Passing the School Budget Presented By: Vermont School Boards Association

2. Speakers • Bill Talbott – VT Dept. of Education • Brent Kay – Orange Southwest SU • Ken Fredette – Wallingford School Bd. • John Fike – Reading School Board • Winton Goodrich - VSBA

3. Key Assumptions • Connection between per pupil expenditures and residential tax rates • No CLA impact when paying taxes based on income • Boards not responsible for impact of increasing property values

4. Cost Drivers • Local and Total Spending • Negotiated Contract • Employee Benefits • Purchased Services • Student/Teacher Ratios • Increased Staffing Levels

5. 75% of Budget is Fixed by the Negotiated Contract Options for Substantial Cost Reduction: Eliminate Programs Increase Student/Teacher Ratio

6. Factors That Influence Taxes • District could have flat budget growth but if CLA decreases it causes tax increase • Property value growth is slowing • CLA impact may diminish in future years • Less tax base growth may cause statewide tax rate to increase

7. What’s New for FY09 • First year union and member districts have separate tax rates • Each will be exposed to high spending threshold • Base year for Act 82 • “Think-Twice,” two-vote provision

8. What’s New… • Changes to equalized pupils • Secondary weight reduced to 1.13% • Shorter ADM – Final count Dec. 15 • Considering fall and spring ADM census

9. Financial Effort • % wealth that a state allocates to education • $12,337 in 2008 has the same "purchase power" as $10,000 in 2000.

10. Ed Spending – CPI – GDP(revised slide)

11. School Spending Patterns Change(2007 VT Annual Personal Income Growth 4.7%)

12. Education Fact Sheet Demonstrates Equity Between High and Low Spending Districts

13. Annual Health Insurance Increases Vermont School Boards Insurance Trust

14. Annual Special Education Increases(K-12 Service Plans) Vermont Department of Education

18. Vermont Business Roundtable

19. Web Finance Resources Vermont Business Roundtable http://www.vtroundtable.org/ Voices for Vermont's Children http://www.voicesforvermontschildren. org/main.php/sid/7

20. Education Funding Bill Talbott Chief Financial Officer Vermont Department of Education

21. Equalized Pupil Weights

22. Student Enrollment Trends

24. Excess Spending Threshold FY 2008 - $12,594 FY 2009 - $13,200(est.) (Statewide avg. of $10,860 increased by 25%)

26. 2008 State Tax Rates • Homestead tax rate = $0.87 (may be reduced to $0.85) • Non-resident & business tax rate = $1.36 (may be reduced to $1.34) • School budgets do not impact non-resident and business tax bills

27. Non-resident Tax Rate • CLA impact same as homestead tax rate • Fund raising doesn’t help any more – No financial advantage for benefactor

28. Non-Resident CLA Impact $1.36 Non-Resident & Business (No income sensitivity provisions) Town A (90% CLA) adjusted tax rate $1.36/0.90 = $1.51 Town B (80% CLA) adjusted tax rate $1.36/0.80 = $1.70

29. Eligibility for Income Adjustment • 2007 tax return $90,000 or less based on entire house site value • Income over $90,000 eligibility based on first $200,000 of house site value

30. Income Sensitivity • Homestead income less than $90,000 - • Tax credit subtracted from school tax bill • Based on 2007 income and FY 2008 school budget • Homestead income less than $47,000 of total tax bill • Combined municipal and adjusted school tax must not exceed 5% of income

31. Common Level of Appraisal • Common Level of Appraisal • Town grand list divided by the state equalized grand list • Used to equalize property values and resulting tax burdens throughout the state • Statewide average CLA 82.39%

32. Effect of CLA on Tax Rates

33. Under Act 130 • Homestead tax collected by town • Union and member districts each have own tax rates (don’t avg. rates) • Districts determine ed. spending per pupil • Based on grade range of district • Prek -12, K-6, 7- 12, 9-12, etc.

34. Under Act 130 • Union districts are recognized • All districts will determine education spending per equalized pupil • All districts will have a homestead tax rate • Town’s homestead tax rate – weighted average of district tax rates

35. Homestead Tax Rate for Bedrock Town of Bedrock 60% of eq. pupils are members of Bedrock Elementary District 40% of eq. pupils are members of Mudville Union High District

36. Homestead Tax Rate for Bedrock Bedrock Elem. tax rate = $1.40 Mudville Union High tax rate = $1.55 60% of 1.40 = 0.84 40% of 1.55 = 0.62 Bedrock tax rate = 1.46

37. Setting Homestead Tax Rates • Education Spending ÷ district’s equalized pupil count = average per pupil spending • Example: Ed Spending =$2,858,700 Eq. Pupil Count = 300 $2,858,700 ÷ 300 = $9,529

38. Equalized Homestead Tax Rates

39. Tax Rates on the Tax Bill • Equalized Tax rates are then divided by the town’s Common Level of Appraisal • Per pupil spending = $9,529 • Equalized rate = $1.24 • CLA = 80% • Tax rate on bill = 1.24 ÷ 80% = $1.55

40. Education Spending for State

41. Regional Per Pupil Education Comparisons 2005 Data, Vermont Dept. of Education

42. Tax Rates & Tax Amounts

43. BRAD

44. Town Rebates and Prebates http://www.state.vt.us/tax/pdf.word.excel/statistics/2004/prebate_town.pdf Income Sensitivity Web Resources Check Link

45. The Final Stage: Presenting and Passing Your School District Budget Brenda Fleming Business Manager Rutland Northeast Supervisory Union

46. Know your Audience • School Board • Committee of Elected Officials • Citizens of a Single Town • Citizens of Multiple Towns – • Union or Independent School District • Vocational School – Local or Regional

47. Respect Your Audience • What are the goals for students? • What are the key economic factors? • Who are your major employers? • Dotcom's vs. agricultural industries • Large conglomerates vs. family run businesses

48. Respect Your Audience • What are the income levels? • Compare community, state, and national incomes. • What are the community education levels?

49. Present to your Audience • Tailor information to fit the public forum. • PowerPoint, Overheads, Handout • Mailing, Brochures & Flyers • Small meetings of elected officials and citizens • Large meeting of citizens Remember to Respect your Voters!

50. Budget Approval Process • Public vote “From the Floor” • Board members present • Citizens and/or voters present • Public vote by Australian Ballot • Voters must “read” the annual report and/or budget flyer to be informed • Make sure the written material is clear, concise & understandable • Don’t use public funds to advocate; only to inform!