HomeMy WebLinkAboutAgenda - Steering Committee - 12/05/2011 AGENDA
SOUTH BURLINGTON STEERING COMMITTEE MEETING
MONDAY, DECEMBER 5, 2011
6:00 — 7:00 P.M.
CITY HALL CONFERENCE ROOM
575 Dorset Street
South Burlington, VT
1. Approval September 21, 2011 Steering Committee Meeting Minutes
2. Special Election — Charter Changes
3. Budget Discussion FY2013
4. Audit Update
5. Other items to come before the Committee
6. Adjournment
If you are interested in having an item placed on a future agenda, please contact the
superintendent.
Any person requiring special accommodations to attend this meeting should contact the
superintendent's office at 652-7252 at least 72 hours before the meeting.
South Burlington
Steering Committee Meeting 12/5/11
Attached is a budget development worksheet that highlights in
the major factors that are used to determine the South
Burlington education tax rate.
Items determined by the State:
1 . State base education amount - $8,544 in FY 2012 —
recommended adjustment provided by Mary Peterson,
Commissioner, Department of Taxes on 12/1/2011 . This is
to be finalized in the State legislature in the 2012 session.
2. Common level of appraisal — currently 96.23% & is to be
available by December 31 , 2011 from the Vermont
Department of Property, Valuation and Review.
3. Vermont residential tax rate — currently 87 cents-
0/1
recommendation provided by Mary Peterson ,
4. Equalized pupils — 2412 — to be updated by December 15.
$3g8tp
Item determined by the district:
5. Total budget amount — A preliminary budget will be
presented to the School Board on December 21 , with a
proposal to be approved by the Board in January, and
presented to the voters in March.
Letters from Governor Shumlin and Commissioner Peterson are
attached.
(The tax that an individual pays is also subject to income sensitivity)
SBSD Budget Development
1/15/2011
FY11 Budget FY12 Budget Change
Proposed Budget 40,296,044 40,587,607 291,563 State Level Factors
State Base Rate $ 8,544
CLA 96.23%
Total Budget $ 40,296,044 $ 40,587,607 $ 291 ,563 VT Residential rate $ 0.870
Revenue 8,665,504 9,289,863 $ 624,359
Residential Property Tax Impact
Act 68 draw from Ed Fund 31,630,540 31 ,297,744 $ (332,796) Before income sensitivity and with the
Equalized Pupils 2,407 2,412 $ 5 CLA the residential property tax per
$100,000 homestead value is:
Act 68 Per Pupil Cost 13,143 12,978 $ (165) Budget
Total $ 1,373
Change from FY11 $ (10)
S.B. Residential Tax Rate $ 1.323 $ 1.322 $ (0.001)
Residential Tax Rate w/CLA $ 1.383 $ 1.373 $ (0.010)
PETER SHUMLIN
Governor '
State of Vermont
OFFICE OF THE GOVERNOR
November 21,2011
Dear Local Education Official,
Thank you for devoting your time and energy to providing quality educational opportunities for Vermont
students. Recognizing that you and your colleagues are in the process of developing a budget for the next
school year,I have asked the Department of Education to provide you with a number of spending
indicators by school district that may be helpful in that process. The fact that overall school spending
increases have been basically zero over the past two years proves that school boards,administrators, and
voters have been diligent in keeping costs in line. That is important because the primary driver
determining whether local and statewide education tax rates go up or down is local spending decisions.
With the statewide grand list used in determining the statewide education tax rate for next year continuing
to decline, that rate would be expected to increase somewhat. If overall school spending can be held level
for another year,that could help keep tax rates and taxes paid level as well. I realize that the data provided
may not be perfect, but keep in mind it is just meant to spur questions and dialogue at the local level. I
hope you will use this information to carefully scrub your budgets in the coming weeks. The indicators
were compiled using existing reports found on the department of education's web site at this address:
http://education.vermont.gov/new/html/maindata.html . If you have questions about the data or
suggestions for other indicators that should be shared in the future,please feel free to share them with your
contacts at the Department of Education.
Together we must ensure our children have access to first class educational opportunities in a manner that
is affordable for our citizens. Keep up the great work.
Sincerely,
Peter Shumlin
Governor
109 STATE STREET • THE PAVILION • MONTPELIER,VT o5609-0101 • WWW.VERMONT.GOV
TELEPHONE:802.828.3333 • FAx:802.828.3339 • TDD:8°2.828.3345
it
of
State of Vermont Agency ofAdministration
Department of Taxes
133 State Street
Montpelier,VT o5633-i4oi
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December 1, 2011
Rep. Shap Smith, Speaker of the House
Sen. John Campbell,President Pro Tempore •
Vermont State House
115 State Street
Montpelier, VT 05633-0004
Dear Speaker Smith and President Pro Tempore Campbell,
As you know, 32 V.S.A. Section 5402b(1)and(2) requires the Commissioner of Taxes, after
consultation with the Department of Education, the Secretary of Administration and the Joint
Fiscal Office, to recommend adjustments to the statewide education tax rates by December 1st, if
the balance in the education fund stabilization reserve is projected to exceed five percent or fall
• short of three and one-half percent.
The Governor has asked me to make clear his goal and expectation that, working together with
local education officials and the Legislature, we,will maintain the statewide education tax rates
for next year at the same level as this year, while aiming to fully fund the stabilization reserve at
five percent. Later in this letter, I will"explain the two steps necessary for this to take place:
As usual, staff from the Department of Taxes, Department of Finance and Management,
Department of Education, and Joint Fiscal Office have prepared consensus forecasts on various
components of the Education Fund Outlook for FY13,and note the following pressures:
m Grand List: The statewide grand list is projected to decline in value from FY12.
This is a continuation of the downward trend related to the residential and
commercial real estate market that likely will impact the fund for two more years.
All else being equal, falling values create an upward pressure on property tax
rates in order to fund education spending at the same level.
® Tropical Storm Irene: Damage and rebuilding from Tropical Storm Irene are
expected to balance out without any additional negative effect on the overall
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®V ERMOl V 1
http://tax.vermont.gov
statewide grand list value for FY13. Legislation that would give the
Commissioner authority to reimburse towns for abatements of FY12 education
taxes currently is estimated to cost in the range of$2-4M,which would be
covered by the FY12 surplus. Given that the bill has not passed the General
Assembly, reimbursements are not factored into current law projections at this
time.
® Property Tax Adjustments: Adjustments for income sensitized taxpayers in
FY11 ended up below forecast. Staff analysis suggests that this was the result of
the new provision that disallowed certain federal adjustments to income on Line
Q when calculating Household Income. The data indicate that the change both •
disqualified some homeowners from eligibility and lowered the adjustment for- •
others. However, for FY13 taxpayers will be allowed the federal deduction for
self- employment health insurance, which is believed to have comprised a
significant share of the Line Q impact. Therefore, the total for FY13 adjustments
is forecast to rise slightly over the FY12 adjustment estimate. (It also should be
noted for FY14 the provisions which increase the effect of interest and dividend
income on overall Household Income and which limit adjustments to the first
$500,000 in home value are set to sunset).
• School Spending: Based on DOE's preliminary inquiries to school districts,the
education spending growth rate is projected at 1.7%for FY13. This follows a
reduction in education spending for FY11 and FY12, although school districts had
access to American Recovery and Reinvestment Act("ARRA") federal monies in
those years.
• Base Education Amount(16 VSA P4011(b)): The base education amount per
pupil has been frozen at $8544 for three years through FY12. Using the State and
Local Government("S&LG") Price Index,the base amount is set to increase to
$8891 for FY13.
• General Fund Transfer: After several years in which the General Fund transfer
was impacted by several factors, including the availability of ARRA funds,the
base was reset for FY12. Using the S&LG price index,the general fund transfer
is set to increase slightly over$6M.
Reflecting these and other factors,the consensus forecast is that the balance in the stabilization
reserve would fall below three and one half percent under current law without an increase in the
statewide education tax rates, and therefore 32 V.S.A. Section 5402b(2)requires a
recommendation that the base homestead property tax rate be increased. Although a$0.01
increase might satisfy the minimum requirements of that section by meeting the minimum
reserve,to fill the maximum reserve at 5% requires a$0.02 increase in the homestead base rate
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to $0.89,and a like increase in the uniform non-homestead property tax rate to $1.38. The 1.8%
base homestead income rate remains at its floor pursuant to Section 5402b(b). It must be noted
that both the $0.89 and 1.8%base homestead rates would be subject to adjustment based on local
spending decisions. In FY12 the average equalized homestead property rate is $1.25.
Although Section 5402b is prescriptive with respect to the recommendation of the Commissioner
of Taxes undercurrent law and forecasts, it is entirely possible to avoid any increase in the base
• rates for FY13: The Governor recommends the following two steps to ensure that will be the
case:
1) School spending should be held level next year. That is important because local spending
decisions are a primary driver determining whether local and statewide education taxes
go up or down. The Governor is most appreciative of the time and energy local,leaders
have devoted to providing quality educational opportunities in a cost constrained
environment. The fact that, overall, school spending has been relatively level for the past
two years demonstrates that school boards, educators, and voters have been diligent in
keeping costs in line. With student enrollments continuing to decline and a new trend
showing the number of educators in our schools declining, Vermont should be able to
hold overall spending level for the next school year.
According to the most recent elementary and secondary public school enrollment report
from the Vermont Department of Education, school year 2010/11 was the fourteenth
consecutive year of declining enrollment. Vermont has experienced a 15% decrease in
enrollment, since hitting a peak of 106,341 students in school year 1996/97. School year
2010/11 saw a further decrease of 950 students in elementary/secondary public school
enrollment. This trend is projected to continue, albeit at a slower pace. More
importantly, the number of educators has now begun to decline as well. This is a trend
that has been predicted for many years and appears to be taking hold now. According to
the most recent Vermont Department of Education staff/salary report,the full time
equivalent(FTE)teacher and support staff totals for school year 2010/11 decreased by
more than 300 from school year 2009/10. According to actuarial reports provided by the
Office of the State Treasurer,between school year 2008/09 and 2010/11,the number of
educators in our public schools dropped by over 650, from 10,799 to 10,123.
2) Increase the base education amount by 2.1%, representing one year of inflation. Since •
this factor has been frozen for three years; 16 VSA §4011(b), if not amended, will require
the base education amount to jump by three years of inflation. The Governor believes
increasing the base education amount by one year of inflation, 2.1%,would be prudent,
appropriate, and consistent with the intent of prior actions by the General Assembly.
If these two steps are realized,there will be no increase in statewide education tax rates next
year. The Administration looks forward to working with local educational leaders and the
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Legislature to ensure that result. Together we can continue to deliver first class•educational
opportunities for Vermont students in a manner that is affordable for our citizens.
Sincerely yours, • '
Mary Peters,n
Commi•.'c er, Department of Taxes
cc: Jeb Spaulding, Secretary,Agency of Administration
Jim Reardon, Commissioner, Department of Finance and Management
Bill Talbott, Chief Financial Officer, Department of Education •
Rep. Janet Ancel•
Sen. Ann Cummings
Stephen Klein, Joint Fiscal Office
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