How will you assess the current proposed Harwood Union Unified School District (HUUSD) budget of $50.8 million? The budget represents an increase of 11.94%. The table in Lisa Scagliotti’s article two weeks ago showed education property taxes going up between $316 and $509 per $100,000 of value, depending upon the town of residence.
Figuring out what it means is vital, as your vote on the school budget is your voice, connected to your education tax bill, and the only way the General Assembly will hear your concerns.
2024 is a perfect storm for school budgets. The cost of education has outstripped the capacity of Vermonters to pay. Vermont’s education funding system is broken. An indication of the chaos the current year’s changes is creating, is that the Legislature is considering amending phase in mechanisms for new pupil weighting systems for this year’s school budget votes, without being able to estimate what the outcome of those changes might be for the cost of education in Vermont. H.850 was introduced on Friday, February 9, and is being reviewed and voted on in the House this week.
What changes are creating that chaos? “Pupil weighting” legislation is bollixing up education funding expectations. The number of pupils continue down. Federal funding that supported new mental health initiatives and a return to in-person learning is evaporating, yet the needs remain. Universal school meals are being funded through the Education Fund at $29 million for the first time this year. Your property tax assessment is going up.
In 2021-2022, the average expenditure per student nationally was $15,368, Vermont’s was $25,053, behind only New York and the District of Columbia (National Education Association, 2023).
HUUSD PROPOSED BUDGET
HUUSD’s $50.8 million proposed school budget is part of the storm. Our district educates 1,597 students in K-12 and 218 in preK today. In 2014, 10 years ago, the Harwood Union Unified District had 1,893.82 “equalized pupils,” according to the Agency of Education School District Data Tool.
Annually, the Legislature adds to the requirements for school curriculums, facilities, accommodations, and services, such that our schools now also act as social service and mental health agencies in addition to customary education obligations. Complying with those mandates makes the jobs of staff and board members tough – and hugely expensive. Salaries, health insurance, loss of federal funding for essential social services, increase the cost of educating our 1,815 preK – grade 12 students.
REAPPRAISAL/GRAND LIST/PROPERTY VALUES
Every town in our district is under state orders to reappraise its Grand List to reflect fair market value. In the meantime, the Department of Taxes estimates what your town’s fair market and Grand List with a Common Level of Appraisal (CLA). In our district, property values are anywhere from 66.07% of fair market value (Waterbury) to 71.01% (Fayston). The CLA “true-up” is reflected in the education property tax you pay. Upon a completed town-wide reappraisal, the assessed fair market value of your residential property is going to go up – a lot. And as every property owner knows, a higher assessment does not mean more money in your pocket.
HOW WE PAY FOR SCHOOL BUDGETS – PUPIL WEIGHTS
In July 2024, Act 127, which in 2022 established new pupil weighting requirements, phases in. Weights are applied based on students’ grade level, economically-deprived backgrounds, English language learners, as well as low population density districts and small schools in sparsely populated districts. The state uses pupil weights to adjust student counts (establishing the - new this year – long-term weighted average daily membership (LTWADM) for districts) and establish the tax capacity of a school district. The LTWADM, the resulting tax capacity and local spending determine the education property tax rate. For a home valued at $300,000 in Moretown, education property taxes are slated to increase $987 based upon phasing in pupil weighting, CLA adjustments, and the proposed HUUSD budget.
The Vermont Legislature established income sensitivity years ago to help people in certain income categories pay education property taxes on their homesteads. Historically, approximately two-thirds of Vermont households have been eligible for income sensitivity, now called the property tax credit. If you pay property taxes based on income sensitivity, you still pay and your education property taxes will go up year over year.
Property tax credit (income sensitivity) is based on income and homestead values. Households with incomes under $90,000 may claim a property tax credit on the first $400,000 of their equalized house site value (see CLA). Households with incomes above $90,000 may claim a property tax credit on the first $225,000 of their equalized house site value. There is no income sensitivity available on the value of a homestead that exceeds $400,000. When properties are reappraised due to the current inflationary market and reappraisal orders, a lot more properties will exceed that $400,000 threshold. Will your property assessment go up? Yes. If you qualify for the property tax credit today, your property tax credit will cover a far smaller portion of your entire property tax bill in the future.
EDUCATION FUND
The state Education Fund has a number of revenue sources including the sales tax. Property tax dollars make up two-thirds of the Education Fund and when other revenues fall short of the amount needed to pay for voted school budgets, the education property tax fills the gap.
As we see in the proposed HUUSD budget, as a phase-in, for five years there was a 5% cap on homestead property tax rates resulting from pupil weighting if overall spending in a district did not increase more than 10%. H.830, the bill being debated this week, would change that phase-in mechanism. The Education Fund will pay for the phase-in, an estimated $30 million new obligation. And education property taxes are the revenue that covers two-thirds of the Education Fund. So, you will be paying – possibly not as much and possibly not as directly.
As a recently retired middle-income Vermonter, I believe I have no choice but to vote no on this year’s school budget.
Horn lives in Moretown.
