Board approves school budget, barely

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MANCHESTER >> School directors approved an $11.8 million budget proposal to present to voters at March town meeting at the end of a special school board meeting last Thursday, but only by a narrow 3-2 margin, with the board chairman casting one of the two "nay" votes.

The school board, faced with a steady decline in district-wide PreK-12 pupils projected to continue in coming years, struggled to find a balance of spending reductions to reduce pressure on the property tax rate, while protecting educational programs deemed essential.

The budget the school board will put before the voters and which they will decide on by an Australian ballot vote will reflect about $423,000 in cost reductions from their starting point. That amount includes not replacing a retiring teacher, cutting a custodial/transportation position, and a further $100,000 in instructional supplies, equipment and professional development. A technology teaching position will be eliminated, but will be offset by creating a new technology position that will be shared with other school districts in the supervisory union.

Even with those reductions in spending however, the tax rate Manchester residents will pay in education-related taxes will rise by more than 10 cents, from the current "equalized" rate of $1.52 per $100 of assessed property value to slightly more than $1.64. Between seven and eight cents of the increase is attributable to penalties imposed by state law under Act 46, legislation designed to push school districts towards more consolidation and efficiency and to curb statewide spending increases which were seen as getting out of hand,

Under Act 46, school districts have been assigned "allowable growth increases" based on previous year's per-pupil education spending. When districts exceed that threshold, a punitive tax penalty is applied on every dollar of spending above the threshold. "Our responsibility is to put forward the best suggestion (budget) that we can, and then the town can tell us whether or not they agree," said school board Chairman Brian Vogel as the more than two-hour-long meeting drew to a close and the board was preparing to vote the budget proposal up or down.

But Vogel joined board member Stephen Murphy in declining to support the final proposal considered by the board. Mary Beth O'Donnell, Mark Kaplan and Jon Wilson formed the narrow majority, but the combination of tax increases and spending cuts left none of the board members visibly enthusiastic about the final package.

Vogel said he would not support the budget in the run-up to town meeting either. The tax increase contained in the budget was hard to justify in the current economic climate as wages have stagnated and the school district's pupil count — which includes all students across the spectrum from pre-Kindergarten through secondary school — is declining, he stated after the meeting in an email.

The primary driver behind the budgetary woes faced by the Manchester school board is a projected long-term decline in the number of students. Last year, the school district crafted a budget for 625 "equalized pupils" that totalled $9.108 million in "education spending," or total expenditures less local revenues, such as tuition for non-resident students attending MEMS or special education reimbursement.

Equalized pupils are based on the actual number of students, but some count for more than others. Extra weight is given to secondary school students, and less to those in pre-kindergarten, for example. Students who are deemed more expensive to educate, such as those from poverty backgrounds or for whom English is not their first language, are weighted more than others. The number is calculated on a two-year average.

But in the coming year, only slightly more than 604 equalized students are anticipated, pushing the per-pupil cost ratio from $14,555 in the budget adopted last year to $15,583 in the one the board approved last Thursday. That missed the cut-off for the penalty threshold by $765 per equalized pupil. Despite the cuts the board made to earlier drafts of the budget, the total amount of educational spending in the new budget grew $310,000, to $9.418 million.

The decline in the numbers of students is not expected to be a short-term blip. The board saw a 10-year enrollment projection which forecast the number of equalized pupils dropping steadily, before settling around 500 in 2024 or 2025.

Unless the decline is reversed, the board is likely to be facing the same difficult decisions around cutting staff, supplies and programs in coming years, Vogel said at several points during Thursday's meeting.

Little help can be expected this year from the Legislature in terms of tweaking Act 46 to alleviate the penalty taxes in time to make a substantial difference, School Superintendent Dan French told the school directors and the approximately 30 people in the audience. Most of the audience members who spoke urged the school board to keep the education program as robust as possible.

Meanwhile, in Montpelier, both the House and state Senate education committees are considering ways of modifying the spending caps as the current session of the Legislature gets underway. But even if they did act relatively quickly, it wouldn't meet the deadline the board faced with adopting a budget in time to be sent to the printer and for distribution to voters. That deadline was effectively the following day, Friday Jan. 15. French said.

"My perception is that they're not likely to solve this issue any time soon," French said.

Even if the Act 46 penalties were not in place, he would have urged the school board to support the budget proposal and the spending reductions it contained because of the long-term pupil count question. A cut of more than $400,000 would have been needed to avoid penalties altogether, but none of the board members felt a budget decrease of that size was realistic, he said.

"If we don't make these reductions now, next year will be even worse," he said.

French said he considered the spending caps to be poor legislative policy during the meeting, and followed up in an email afterwards.

"The Act 46 spending caps are an ill-conceived policy approach to restrain education spending," French wrote. "They were developed in a hurry during the waning hours of the last legislative session, and were not well thought out. School boards were not given ample time to adjust this policy change. I think these caps should be repealed immediately in favor of going back to the original penalty threshold mechanism included in Act 68 which has proven to be effective in the past."

Board members were faced with a dilemma: either cut programming or raise taxes. Approving a budget that would cut education spending too aggressively risked creating a downward spiral of furthering the enrollment decline as families sought other educational options for their students, which would continue to feed the already existing problem and force even more cuts, locking enrollment pressures and cuts to education programs in a vicious cycle, said school director Jon Wilson in an email.

Act 46 offered school districts like Manchester's a chance to search for regional solutions, He also thought it was time for a further analysis of the enrollment outlook.

"Based on my enrollment analysis of all the public schools around us, no one is losing students like MEMS is," he wrote. "Most of our neighbors seem to be staying level or actually gaining students. So, while the statewide trend may that there is a declining student population in Vermont, I am not sure this is true for Manchester or our area. Local census data actually suggests that our youth population could be growing. For us to cut programming would make us less able to compete with the schools around us, and Manchester cannot afford the long-term impacts of this."


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