The HUUSD School Board met remotely on Wednesday, January 13th. One focus of the meeting was budget planning for the coming 2021-22 school year, also called Fiscal Year 2022 or FY22.
The Board tentatively approved a budget to put before voters by Australian Ballot on Town Meeting Day. Since deliberations began in December, total expenditures have been reduced by almost one million dollars to a projected total expenditure next year of $40,390,158. This is a 1.6% increase over the previous budget year. The final budget is based on the district’s current staff, programming, and building configurations, but does increase two half-time nursing positions so that each school will have a nurse available full-time. It also restores funding for professional development (which had been cut last year) and includes contracted services around human resources, negotiations, and bond planning.
The Board also tentatively approved a plan for how to use surplus from the previous (2019-20) school year. This unusually large surplus, $2.3 million, resulted from unspent budgeted funds due to the pivot to fully remote learning in March 2020. The Board recommends that the surplus be allocated as follows: 1) transfer $600,000 to the district’s general fund to reduce the FY22 tax rate; 2) transfer $1 million to the HUUSD maintenance reserve fund to steward our seven campuses; and 3) set aside $615,456 for future use as needed for district operating or maintenance costs (a sort of “rainy day fund” for the difficult budget situation the state and district expect to face in FY23).
When contributions from last year’s surplus (mentioned above) and all federal, state, and local revenues are taken into account, the district’s projected FY22 education spending -- that is, the amount paid for through property taxes -- would increase by 2% from the previous budget year.
The state’s education funding formula -- which determines local homestead property taxes -- is complex. A challenge that it presents for local boards is that one significant variable is not set by the state until after school boards finalize their budgets. For example, based on initial projections from the Tax Commissioner, the equalized tax rate is projected to increase from $1.63 this year to $1.74 next year -- a 6.6% increase in taxes despite only a 1.6% increase in costs. In recent days, however, state leaders have indicated that tax revenues have been higher than anticipated and that this increase might be reduced -- but districts will not know the final outcome until the yield is finalized in May, after Town Meeting Day.
The equalized tax rate (mentioned just above) will be turned into a local homestead tax rate for each town according to another state-determined number, the Common Level of Appraisal or CLA. This is an adjustment made by the state to bring each town’s grand list into alignment with real estate market rates. When property values go up -- as they have in each of our district’s towns recently -- the local tax rate also goes up. This means that, locally, we might actually see taxes increase 9 - 12% instead of the 6.6% projected by the Tax Commissioner. More exact calculations are available here: https://drive.google.com/file/d/17qPWIQoRkS8RIB0LMSNaUl-fqWo4L7f4/view?usp=sharing.
The projected cost increases have been alarming to the school board. In December, the VT Tax Commissioner projected that education spending would increase by 3.79%, that equalized per pupil spending would increase by 3.75%, and that taxes would increase by 9%. Our administrators have worked with the board to develop a budget that is significantly lower than the statewide average -- with increases in education spending of just 2% and per pupil costs of 3%. Even so, our community will be hit hard by rising health care costs (increasing almost 10% for next year), rising property values (the CLA adjustment), reduced tax revenues due to COVID, and state policies that increase the demands on the VT education fund without increasing its revenues.
This has been a difficult year for many in our community in terms of health, emotional wellness, and finances. The board has tried to balance preserving essential services and our investments in our district’s infrastructure with the need to reduce expenses on behalf of taxpayers. Beyond planning for the year ahead, the board continues to work towards finalizing and implementing plans it articulated in November 2019 to reconfigure the district in response to ongoing declines in our student population. We anticipate these will enable us to reduce staffing while still providing excellent, and possibly expanded, opportunities for our students.
There are a number of upcoming meetings that may be of interest to community members (click on https://us02web.zoom.us/j/386460007 to join any of our meetings via Zoom, or watch at our YouTube Channel https://tinyurl.com/yy2yhfo8).
Wednesday, January 27 @ 6PM - Board’s next regular meeting (budget to be officially “warned” for our upcoming election)
Wednesday, February 3 @ 7PM - Online Budget Q&A session where community members can ask any questions they have about the budget, the budget process, and the education spending formulas that determine local homestead tax rates
Monday, March 1 @ 6PM - Official informational meeting (also via Zoom) prior to the election
Tuesday, March 2 (or before, if requesting a mail-in ballot) - Voters will be asked to approve the budget and surplus allocations by Australian Ballot