40 listen as state ed experts explain education funding formula

By Shawn Cunningham
©The Chester Telegraph – 2014

The first two hours of the Chester Select Board meeting for Wednesday, Aug. 20 was devoted to a seminar on how the state education tax rate is calculated and why Chester’s tax rate took such a jump this year. The program was led by Steven Jeffrey, executive director of the Vermont League of Cities and Towns, Jim Knapp, interim director of Property Valuation & Review for the Vermont Department of Taxes, and Doug Lay, field supervisor of Property Valuation & Review.

Photo by Shawn Cunningham

Doug Lay of the Department of Taxes explains the process for calculating the CLA. Photos by Shawn Cunningham

Jeffrey began the session with an overview of the $1.5 billion state education fund and an historical look at Acts 60 and 68, which are the laws that set down a statewide school funding system. He then performed what he called an “autopsy” on Chester’s education property tax increases of 2014. When Jeffrey had finished Knapp and Lay explained how they perform equalization studies to arrive at a Common Level of Appraisal — CLA — that is calculated to create a level playing field among municipalities so the state can set its education tax rates.

The 40 residents in attendance squinted to see two Power Point presentations that appeared too small on a folding screen, but they hung in and seemed to grasp a topic that was once said to be understood by fewer than a dozen people in Vermont. The topic was complex and there are many variables that go into a tax rate calculation, but Jeffrey said that a simple system would not be fair to everyone, while a fair system tends toward being complex.

While the first presentation garnered very few questions, the discussion of the CLA triggered a more active response, including some questioning the statistical methodology of the “equalization studies.” These studies look at recent sales, then average those sales over three years to come up with a market value and next compare that to the town’s appraisal. Lay explained that some sales are disqualified as being distressed and others – like sales within a family – are not “at arms length.”  The method for disqualifying sales came in for some comments by those attending.

“This is not rocket science,” commented Bill Dakin. “You’re doing a lot of rounding.”

Lay defended the process saying that the reviews include as many “arms length” sales as possible to come up with a reliable sample.

“People don’t feel (the CLA) reflects market value,” said Select Board member Bill Lindsay. “There are a lot of houses for sale in town.” Lindsay noted that sellers were sitting on houses for a long time but that is not reflected in the appraisal.

“Where do towns have control over taxes?” asked lister Wanda Purdy, “Somebody is not doing their job in Montpelier … It’s inexcusable.”

Board member Derek Suursoo agreed with Purdy saying, “Taxes are going up and understanding the process doesn’t change that.”

State Sen. Alice Nitka attends the meeting on school funding.

State Sen. Alice Nitka attends the meeting on school funding.

State Sen. Dick McCormack rose to say that he was paying attention. “I hear (Purdy) loud and clear … I came with the expectation of getting reamed out.” McCormack said that the underlying problem is that education is expensive and that to get taxes down, spending has to come down.

As chairman of the Senate Education Committee, he noted that consolidation has been considered by the Vermont House, but by the time they were done with a bill, it was too late in the session for the Senate to take it up. McCormack also said that it’s a good idea to take a little time to consider when you are looking at replacing a system that has worked for 200 years.

“We’re not done with consolidation,”  McCormack said, referring to the state’s push to consolidate school and supervisory unions to save money.  Area schools recently underwent consolidation under a new supervisory union, now known as Two Rivers, “I’m not sure that’s going to save enough, but I do not have a glib answer for you – no one does.”

Green Mountain school board chair Alison DesLauriers pointed out that in many instances, “Consolidating governance leads to consolidation of schools, closing smaller schools.”

One of the effects of Act 60 calculations is that a decline in school population raises the per pupil cost and triggers tax increases as if overall spending was going up, “We have 30 more kids in the school this year,” said DesLauriers,“but our number of students has dropped by two. I was stunned by that.” DesLauriers was referring to the lag in calculations that results from working with the previous year’s numbers in calculating the current year’s tax rate.

McCormack agreed that the law has “the perverse effect” of raising taxes on a school district where student population is going down.  DesLauriers noted that per pupil spending goes up in such a case, not because the school is spending more, but because the cost of the infrastructure is being spread over fewer students. “The high school doesn’t get any smaller when you lose a few kids. Those are fixed costs that the formula doesn’t take into account,” said DesLauriers.

Jeffrey also noted that education in Vermont suffers — or benefits — from “mission creep.”  “What was expected of the schools in the ’60s and ’7os is not what is expected now,” said Jeffrey. “Dual enrollment and pre-kindergarten are now mandated.” Dual enrollment is a program that allows high school students to take courses at Vermont state colleges at no charge.

Responding to this, Suursoo said the legislature should “stop it. Choose to say ‘no’ once in a while. It’s not that hard.”

Next week, The Telegraph will have an in-depth look at the laws, systems and formulas that calculates the education tax.

After a break, the Select Board reconvened with an audience of 37 fewer people. The board postponed its look at financials, noted that other agenda items would be taken up at the first meeting in September. Due to a conflicting meeting on Aug. 27, the warned Select Board meeting for that day – to take up the question of applying for a Community Development Block Grant to repair the Cavendish Gulf, would take place with a three member board, but that the the examination of new development bylaws recessed to that day would not. The special hearing on the Cavendish Gulf  is set for 6 p.m. at Town Hall, 556 Elm St.

Chairman John DeBenedetti thanked the surrounding towns including Rockingham and Springfield as well as the Red Cross for their assistance during the recent flooding.

The board had not scheduled old business on its agenda, but town manager David Pisha handed out a packet of old business to the board. Included in this were notes that the Popple Dungeon project “will not be undertaken this year” and a presentation on ambulance service restructuring will be presented at the Sept. 3 Select Board meeting.

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  1. Mary Jane Miles says:

    Great questions. Why does this municipality not put a job such as this out to bid? Why do we not involve the residents and business owners to have a say? Do we not pay the taxes in this town? You bet we do! Does our town manager, David Pisha not have experience in this type of management? Or do we ask the non-resident town lawyer what we should do and that is what we go with? Maybe not because I would at least hope he would have drawn out a better business contract for this website.
    MJ Miles

  2. Just one short sentence ‘the Popple Dungeon road project will not be undertaken this year’dooms those of us who make our way across this increasingly treacherous stretch of ‘road’ to yet another winter & spring of misery. Where oh where did the money go we voted to appropriate so many years ago?