Editor’s note: This article by Chris Mays was published in the Brattleboro Reformer on Nov. 30, 2016.
[B]RATTLEBORO — School districts around the state are making plans to merge and comply with Act 46.
The whole idea behind merged structures, Vermont Education Finance Manager Brad James said, is to simplify governance.
“It is far simpler and effective to have a larger district that can best enhance the opportunities for students by moving teachers and resources from school to school where they are needed,” he told the Reformer.
“That cannot easily be done currently, as each district is its own legal entity with its own contracts, finances, etc.”
Under merged structures, budgets will come from a fewer number of school districts. Funding will still be allocated from the state education fund.
James said if school districts vote to form a unified union-school district, there would be one unified union budget and one unified union homestead tax rate. The towns will still have different common level of appraisals, meaning tax rates would be adjusted according to those rates. But the single district would receive the allocation from the education fund.
People like to say they live in a “sending” town, James said, because the town raises more in homestead and nonresidential education taxes than is needed to run their school district. Not a single town in Vermont raises enough through the homestead tax and homestead education grand list “to fully fund its obligation to its school district or school districts,” he said.
“All towns are sending towns and all school districts are receiving districts,” James said, adding that education taxes are state money not town money; roughly two-thirds of homestead owners pay education taxes based on income and not house-site value alone; and the nonresidential tax rate is the same for every non-residential property owner in the state and it’s adjusted by the CLA. “Folks need to move past the idea of so-called ‘sending’ and ‘receiving’ towns. Education funding doesn’t work that way and the terms are red herrings. All towns pay in to the education fund and all districts receive from the education fund.”
He said the CLA is a mechanism that adjusts the tax rate so all taxpayers pay taxes on the fair market value of their property, not the listed value.
“With very few exceptions, school districts do not levy or raise taxes,” said James.
Exceptions, of which there are about nine or 10, are incorporated districts. They include the incorporated districts of Bennington and North Bennington.
“Folks need to move past the idea of so-called ‘sending’ and ‘receiving’ towns. Education funding doesn’t work that way and the terms are red herrings. All towns pay in to the education fund and all districts receive from the education fund,” said Brad James.
“While homestead education taxes are generated by the school districts, those rates go to the towns which levy and raise taxes,” James said. “But the education taxes are state money and are a part of the education fund, both homestead and non-residential taxes. Technically, the towns should send all the state education taxes to the Treasury and from there, I would allocate them back to the school districts where they are spent.”
Statute shortcuts that process, James said. People tend to equate school districts with towns and that is not the case, he added.
“Towns and districts quite often share borders,” he said, “But towns can belong to more than one school district — the union school districts which have borders that encompass more than one town.”
Windham Southeast Supervisory Union Business Administrator Frank Rucker said budgets are always driven by goals and state parameters.
One goal of Act 46, which involves providing “substantive equity” and a variety of educational opportunities to students, was what Rucker thought the AOE was “primarily promoting” Act 46 out to achieve.
Under the current supervisory union, there are separate employers in the single districts. They are governed by separate school boards.
A more regional focus will “substantially change the way we plan for program development,” Rucker said, noting an inequity in programming among Windham Southeast elementary schools. “We all know that variation in program offerings to students has an impact on their learning outcome.”
WSESU Superintendent Ron Stahley has seen results from a previous consolidation effort. The supervisory union was required by the state to change its special education services, going from one teacher for seven-and-a-half students to one teacher for 12 students.
While their case loads were increased “a little bit,” Stahley said those teachers’ services could be shared in schools that could not afford the staffing needed.
“What it has allowed us to do is train our paraeducators as behavior technicians because they’re the ones who work with the most challenging students day to day,” he said. “We felt, through the savings we obtained through the consolidation, we were able to invest that in paraeducator training.”
Not intended in the effort was a savings of about $300,000.
“Our intent was to maximize our staff resources and I know we’re doing that better than we were two years ago,” Stahley said. “We see that as a broader implication through the rest of the district through a merger.”
With a merged structure, Rucker said, “You’re going to be looking at regional programs that affect learning in a way that you simply do not do when you’re dealing with a single school district entity as a separate employer.”
Art, music and enrichment programs tend to get cut first because core subjects are required. Student outcomes are measured by literacy, math and science testing. Those subjects are a fixed cost for districts, Rucker said, comparing them to school buildings and information systems.
“As enrollment declines, you can’t cut all of your costs proportionately to changes in enrollment,” he said, noting that a phantom student provision helps to address districts with a sudden drop in enrollment. “That’s going to be removed in districts that do not merge.”
With a broader focus and collection of resources drawn from a larger region, Rucker said, “You’re able to equalize opportunities.”
Achieving state quality standards will involve examining gaps between student outcomes and how they relate to poverty. Another issue is college. That’s a benchmark Vermont students have fared poorly in recent years.
“The state’s recognizing even though we have a high cost system and things to be proud of, there are some serious issues we are not doing well with,” said Rucker, who expects a merged structure would allow for a focus on coordination of teacher development and curriculum in WSESU elementary schools, “synchronizing” student readiness for middle school and high school. “Under the current system, there’s no requirement for individual school districts, boards or administration to be looking at the coordinated system. Under a merged system, that’s available. That’s fundamental. That’s where you start.”
Currently, there is coordination among the schools from the supervisory union’s central office. But, Rucker said, it’s “being administered over six entirely separate autonomous” employers and school boards.
Maximizing operational efficiencies, another goal of Act 46, is “very much at the heart of a budget process,” Rucker said of the goal that aims to increase flexibility around managing, sharing and transferring resources. “That’s where there’s such a dramatic difference in not only the process but focus and results under a merged system.”
While not the priority or purpose of the merged structure, he said, this goal will present a radical shift from a budget development standpoint. Handling health insurance and Internal Revenue Service requirements as one entity will change the game.
“The ability to share or match up an employer to another is seriously constrained by those regulatory agencies,” Rucker said. “We all must operate within the rules that are given to us.”
Teachers could be shared throughout the merged district.
Currently, teachers could be disqualified from a health insurance benefit if they were to work in different school districts. And the health insurance industry “does not want to see employees who are working less than 17 hours a week being on their plan,” Rucker said.
“You can’t just get an eraser out because you feel like it and say, ‘We’re just going to pretend they’re not separate employers,’” he said. “They’re going to require a W2 to be issued by their employer.”
Another obstacle is the proof mandated by federal law that employers are offering affordable health care to their employees.
The expenses of a school are also accounted for in the state’s funding formula. The cost per student is turned into a tax rate. By sharing employees across different school districts, Rucker said, “It obviously gets to the core of what schools spend, your benefits. You will dramatically affect cost per student.”
“Most of our schools and boards are worried about triggering a cost-per-student penalty,” he said. “When you start sharing employees and not associating the cost of that sharing at the district level, you run into problems in your own ability to cover the costs of your own programs. The result is school districts don’t often share employees. Over the last 20 years, Vermont has dropped enrollment by 20 percent or a little more than that yet our employment is about the same. Actually, it’s a little higher.”
The final goals of Act 46 — promoting transparency and accountability, and delivering education at a cost valued by parents, voters and taxpayers — work hand-in-hand in Rucker’s view. He sees information being more readily available in a unified system, where tax rates won’t be so prone to fluctuation.
“When you’re recording things in seven separate systems as we do now, there’s an inherent inconsistency because the separate entities don’t collaborate,” Rucker said. “They don’t compare notes. Many times, they don’t know each other. They don’t know their systems. It makes it difficult to provide an overview of what do we get for the program investments we’ve made?”
A drop in enrollment of 10 students would be negligible in a district made up of 2,300 students, he said, citing the approximate number of students in the WSESU school districts proposed for a merger. Residents in Brattleboro, Dummerston, Guilford and Putney are voting on whether to allow Vernon to leave the Brattleboro Union High School district on Dec. 13. A vote on school-district unification is then scheduled for March 7.