State's woes affect school budget
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By Cristina Kumka STAFF WRITER - Published: November 2, 2009
The state's revenue shortage will affect all state taxpayers and an attempt by the Rutland School Board to keep its budget increase to a minimum this coming fiscal year may not translate into a low tax increase, a top school administrator said.
The Rutland School Board raised concerns at a meeting last week on the state's gloomy fiscal picture and how it will trickle down locally following a presentation on state education finance laws Act 60 and Act 68 by Rutland Chief Financial Officer Peter Amons.
A more than $900,000 budget surplus the board used to offset the school budget this year may or may not happen again for use in the fiscal year 2011 budget.
Property taxpayers statewide are having to take a larger and larger share of paying for education.
And, according to Amons, Rutland isn't immune.
The city's minimal tax rate increase of about 2 percent this fiscal year is unlikely to happen again due to declining state revenue and its effect on the state's pool of education money that supports the budgets of all 270 school districts, according to Amons.
"This past year - last year - you were able to architect a 2 percent tax increase on a budget that I think we increased an overall 3 percent," Amons told the board.
"It was because of that surplus … you won't be able to do that again," Amons said, referring to the tax increase.
Normally, if a school budget goes up 3 percent, taxes go up double – to about 6 percent or 7 percent, Amons told the board.
Last year, Rutland skirted that norm - special education reimbursements and fewer expenses amounted to $925,000 in unused money that was applied to the budget.
Amons said there would be a surplus the board could apply to its fiscal year 2011 budget but he had yet to determine how much.
Board Chairman Peter Mello said a large surplus can't be counted on each year.
"If it's not what it was, the surplus won't be able to offset the taxes needed to come in," Mello said after the meeting.
School Board member Dick Courcelle said he was struggling with the way the state funds education - especially this year, considering the surplus Rutland may or may not have, a reduction in Rutland property values, unemployed residents and the state's fiscal problems.
"We could level-fund a budget and find out that property taxes are going up 10 percent," Courcelle said at the meeting.
"It's really hard, at least for me, to reconcile how the state does it and what we are expected, as a board, to be responsible over taxpayers' money, from a fiduciary standpoint."
But according to Amons, Rutland benefits the most from the way education is funded to cover the cost of its students.
The Rutland district is the largest beneficiary of the state's pool of education money out of any community in Vermont - collecting $26 million from the state Education Fund but putting only $12 million of residential and nonresidential taxpayer money into the pool.
Rutland's budget this fiscal year is $44.5 million.
Statewide in fiscal year 2010, all Vermont residents paid about $350 million in homestead property taxes that went directly into the state's Education Fund, the $1.3 billion pool of money for K through 12 education, according to September 2009 figures from the Vermont Joint Legislative Fiscal Office.
Roughly $141 million wasn't collected in property taxes due to income sensitivity or property tax adjustments for residents with a lower income, according to the fiscal office.
If not for income sensitivity, the state could have collected more than 25 percent more money in homestead property taxes, according to Amons.
Rutland Board member Collin Fingon questioned the effectiveness of the funding formula with income sensitivity as a factor.
"You put that (income sensitivity) into a property tax on a sliding income scale and we have a lot less funds collected and doled out to the Education Fund," Fingon said at the meeting.
Later, Fingon said he saw a "huge statewide deficit problem" with state revenue decreasing and the inability of people living in Vermont to pay more.
"We know that incomes in the state are decreasing thus more rebates will be made," Fingon wrote in an e-mail.
And while state revenue flowing into the state's General Fund from other sources has decreased 18 percent in two years, the amount transferred from it to the Education Fund remains unchanged – roughly $240 million, according to the fiscal office.
The Rutland fiscal year 2011 school budget is expected to be introduced Nov. 24.
cristina.kumka@rutlandherald.com
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