Budgets Rise Health costs hit Vt. schools
By JOSH O’GORMAN
Staff Writer | February 17,2013
Vermont school districts are facing a dilemma: Keep budget increases small while facing rising insurance costs, dwindling federal aid and the realities of deferred maintenance and equipment purchases.
But voters are facing an average school budget increase of 4.6 percent, based upon data from 250 of the 274 school districts in the state. The increases are driven in part by more expensive health insurance.
While insurance costs have been rising for most people in the public and private sectors, school districts have seen modest increases in recent years — until now.
“Right now, we’re predicting health costs will go up 10.7 percent starting July 1,” said Laura Soares, president of the Vermont School Boards Insurance Trust, which provides health insurance to all public schools in the state.
“This year is different on many fronts,” she said, pointing first to the uncertainties surrounding the federal Affordable Health Care Act, which goes into effect in 2014.
Schools are now proposing budgets for July 1 through June 30, 2014.
“Over the past decade, we have been able to offer (insurance) costs that were very favorable,” Soares said. “This year is an anomaly.”
Insurance rates through the Vermont School Boards Insurance Trust have risen 7.3 percent during the past 10 years, and 2.9 percent during the last five years.
“After looking at small (insurance) increases for so long, this is really hard,” said Ken Page, executive director of the Vermont Principals Association.
Also missing from the revenue side of school budgets will be federal dollars from the American Recovery and Reinvestment Act of 2009, which many districts used to stave off staff cuts or to keep their budgets low.
Keeping budgets flat has caught up to many districts, said Jeff Francis, executive director of the Vermont Superintendents Association.
“We are coming through a period of austerity, so we’re coming through a period of deferred maintenance,” Francis said. “Schools have put off making repairs, making improvements, purchasing new equipment for so long it’s come to a point where they can defer no longer.”
It is uncertain how much the statewide school budget increases will affect the education property tax rate.
When the state Legislature sets the tax rate, it looks at education spending, which is the total of school budgets minus revenue sources.
Education spending across the state is rising 5.5 percent, higher than Tax Commissioner Mary Peterson’s forecast of 4.8 percent in December.
Under this scenario, the base education amount per pupil — which has remained frozen at $8,723 for the past three years — would rise to $9,151.
The Vermont education tax rate would rise 5 cents — from 89 to 94 cents per $100 of assessed value for Vermont property owners and from $1.38 to $1.43 for nonresidents.
A bill before the Legislature, H.265, proposes most of these increases. However, the bill seeks to raise the nonresidential rate by an extra penny, to $1.44.
The bill passed the House Ways and Means Committee by an 8-3 vote last week and is now in the Appropriations Committee. The bill can be tracked online at www.leg.state.vt.us/database/status/status.cfm.
“It’s always a balancing act between a sound education and the interests of the taxpayers,” said Francis of the Vermont Superintendents Association.
“I was a principal for 21 years,” said Page of the Vermont Principals Association, “and I’ve learned there are many things you have no control over. Eighty-five to 90 percent of costs are fixed, and we try to find cuts in the remaining 10 to 15 percent.”