The Brattleboro Town Finance Committee has come out with a report that says we’re spending too much on schools in Brattleboro, and this “confluence of taxes and fee increases will make Brattleboro an unaffordable town to live in and do business in.” They recommend the school budget be reduced by Representative Town Meeting.

The full report and reasoning is below. (Emphasis was added by the committee.)

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Brattleboro Town Finance Committee
Synopsis of Proposed FY2014 BUHS District #6 Budget

For the ANNUAL MEETING of BRATTLEBORO UNION HIGH SCHOOL DISTRICT #6
February 12, 2013, 7pm, BUHS Gymnasium

For Brattleboro voters: While we recognize that the BUHS district has taken good steps to contain costs in a difficult budget year, we point out the following:

1. The Brattleboro portion of the proposed BUHS D#6 budget would be about 34% of total Brattleboro property taxes.

2. The proposed BUHS budget is increasing 1.32%.

3. The actual tax rate increase required to offset Brattleboro’s portion is estimated to be about 3.5 cents.

This will be in addition to a similar tax increase for the Brattleboro Town School District. Both of these will be added to the municipal tax increase.

4. Enrollment is declining.

5. By one measure (education spending per equalized pupil) BUHS D#6 had the highest cost of all VT union high school districts for 4 of the last 5 years.

6. Brattleboro's Grand List is not growing.

7. Except for the possibility of middle school students from Guilford, there are no new sources of revenue on the horizon.

8. Payments on Brattleboro's waste water treatment plant bonds have recently begun. Interest payments on its police/fire facilities begin next year (FY2014) and principal payments the year after. Going forward there will be continuing 7% scheduled increases in water/sewer rates and a 10 cent increase for police/fire in the municipal portion of taxes.

In the context of the Town of Brattleboro's overall picture, we strongly recommend a level funded budget.

The Town Finance Committee, an adjunct of Representative Town Meeting, appreciates and is grateful for the opportunity to serve our community.

Michael Bosworth (Vice Chair)
Bob Rottenberg (on leave)
Tim Cuthbertson
Kathryn Turnas II
Lisa (Lorimer) Donahue
John Wilmerding
Spoon Agave (Chair)

Brattleboro Union High School District #6

A. Quick overview of the district

Brattleboro Union High School District 6 (BUHS D#6) is a regional school district that also includes the towns of Dummerston, Guilford, Putney and Vernon. It oversees the Brattleboro Area Middle School (BAMS - 7th and 8th grades), Brattleboro Union High School (BUHS - grades 9-12) and the Windham Regional Career Center (WRCC). It falls within the Windham Southeast Supervisory Union.

B. The BUHS D#6 budget within a state-wide context

It is a very tough year to control school budgets, a primary reason being the increase in health care costs. The projected 14% increase for health coverage translates into an additional $186,182 in expenses for BUHS D#6. Also, there may be a large increase in the state's education property tax rate but a comparatively smaller increase in the state's base spending amount per pupil. If so, the combination of those factors will translate into higher property tax rates for Brattleboro.

The Vermont League of Cities and Towns (VLCT) predicts that school budget expenditures throughout the state will rise an average of 4.8% this coming year. The proposed BUHS D#6 increase of 1.32% is well below this. However, this does not change the fact that the local tax base is flat and even modest increases like this are not sustainable.

The school board and supervisory union personnel negotiated modest increases in the bargaining unit agreements with faculty and staff. For BUHS D#6 the increase for FY2014 is only 0.55% because of the early retirement program of the last several years as well as attrition and some reductions. Compare this to the predicted 2.5% average rise in salaries throughout the state. (Source: VLCT)

As in the past several years, there is an early retirement plan out for this year, with a limit of ten certified staff. The schools are still seeing savings from the retirements of senior faculty during the last several years. They were replaced by younger teachers who are at lower pay scales and yet have enough experience to be good teachers.

Special education expenses are actually dropping, not rising, for BUHS D#6. This is compared to an expected 7% average rise in special education costs throughout the state. (Source: VLCT) The school system decided to put more resources into this function, and special ed students formerly studying outside the district came back into the district. This resulted in the overall decrease, an initiative which thus saved money while also offering a better education in-house for this population. Special education programs are overseen by the Supervisory Union as well as the administration of the schools.

Much of the evidence above points out that BUHS D#6 has been very careful about expenditures and has found creative ways to save money in an educationally balanced way. The Finance Committee has studied this closely for the last two years and notes that this continues to be the case.

Over the years, however, BUHS D#6 became among the very highest cost public secondary school systems in the state. On the basis of one measure -- education spending per equalized pupil -- BUHS D#6 had the highest costs of any of Vermont's 28 union high school districts for 4 out of the last 5 years. On another measure, budget per equalized pupil, BUHS D#6 has been 4th, 5th and 2nd out of that pool of union high school districts during the last 5 years. (Source: VT DOE)

Public school enrollments throughout the state are declining, down 0.7% this year and projected to go down by 6% by 2018. (Source: VLCT) The drop in Brattleboro equalized pupils for grades 7 through 12 for BUHS D#6 from FY09 to FY14 is expected to be a steep 13.8%. (Another enrollment measure is headcount, but available on-line records end in FY2011. They show a decrease of 12.4% from FY2004 to FY2011.) (Source: VT DOE)

C. Other district factors

The BUHS D#6 school board is proposing a 1.32% higher budget in FY2014. This figure is attained after a proposed transfer of $1,150,000 from the BUHS reserve fund. Of this transfer amount $150,000 is proposed as a set aside for year one of a dedicated fund to cover maintenance needs.

The budget and this use of reserves will be voted on at the BUHS D#6 annual meeting on February 12, 2013. While Brattleboro Town Meeting members have no special status at that meeting, they and all voters in Brattleboro are urged to attend because of its importance. Depending on state education rate setting decisions, this budget might translate into an additional 3 1/2 cents on the tax rate.

Future BUHS D#6 revenues and expenses will be affected by an upcoming decision by the Town of Guilford on whether to send its middle school students to BAMS. If Guilford decides to do so,the anticipated revenue to BUHS D#6 will be in excess of $200,000 against which additional expenses would be minimal. This group of students number approximately 21. The decision on this matter might be made by Guilford this winter/spring but will not be made in time to affect BTSD's proposed FY2014 budget.

D. Long-term debt

Part of the BUHS D#6 budget of course is used to pay off long term debt. The remaining principal on the BUHS renovation bond at the end of FY2013 will be $17,600,000. Another 11 years of debt service (principal and interest) payments of around $2,000,000 per year remain on this bond. Brattleboro, which makes up approximately two-thirds of the school population, is responsible for two-thirds of that debt. The track replacement note has another 3 years to go after FY2013 with debt service payments of more than $90,000 per year. The older equipment lease debt will be retired by the end of FY2013.

BUHS D#6 has a capital budget stretching out 5 years, too short a timeframe to be as useful as it should be for longer-term financial/budgetary planning.

If they are not already aware, voters in town and the Selectboard should become knowledgeable of the BUHS D#6 bond savings that are occurring through the Bond Bank refinancing arranged in late 2011. These savings are reflected in a just a few of the remaining 11 years on the bond, but FY2014 will see a refund check of $43,842 and FY2015 will see a substantially larger reduction of $800,000. In the latter case the savings will arrive through a reduction in the expected payment that year, not through a refund check.

Because Brattleboro students make up about two-thirds of the BUHS student population, then in one sense about $533,333 of the substantial one-time reduction in FY2015 "belongs to" the people of Brattleboro and its fate should be decided by them. In practice any decision on this total $800,000 amount will be made at the BUHS D#6 annual meeting in February of 2014. Should all of that money be used to reduce the BUHS D#6 budget in one year or spread over 3 years? The Finance Committee is concerned that future budgets be controlled in a careful way and that the use of such "windfall" funds do not serve to mask rises in the underlying budget.

E. Conclusions

The public education system means a great deal to the parents of students in the system, and having a good system in Brattleboro should be of high priority to the Town for economic development reasons as well as quality of life. The Finance Committee believes, however, that the schools need to live within the means of the Town. Growth in property values in Town has been negligible for several years and, absent new sources of revenue, any growth in budgets is not sustainable in an already very high tax community. For this reason the Finance Committee feels that even the 1.32% rise in the BUHS D#6 budget is too high. Voters need to be aware that we have the highest cost union high school district in the state.

The Finance Committee has tremendous respect for the administration and boards of the schools. We are convinced that they are focused on doing their jobs, ensuring an excellent education for the students of our town. With the exception in our minds of some high school sports-related capital items of recent years, lately the increases in the budgets have not been extravagant. The district has found creative ways to save money such as their early retirement incentive program.

Without new sources of revenue, however -- and (with the possible exception of the Guilford middle school students) it doesn't look like there are any major ones on the horizon for the schools -- in our opinion even a modest budgetary increase like the one proposed is not affordable. When combined with the direction the state is setting for the base homestead tax rate and the base spending amount per pupil, the proposed budgets are even more problematic. More importantly, when combined with other big ticket items the Town has needed to take on -- the waste water treatment plant, the police/fire station upgrades -- a confluence of taxes and fee increases will make Brattleboro an unaffordable town to live in and do business in.

It is not the Finance Committee's role to specify where the school board might cut if the voters ask them to do so. All the choices are tough ones. Can the school make do with fewer teachers or paraprofessionals, especially if long term trends indicate fewer students? Should extracurricular activities be fewer in number? Can we get along with fewer school-owned properties? And how can all this happen while maintaining a system that parents have confidence in and that ensures the future economic prosperity of the Town?

It is tough to confront choices of "fewer" or "fewer" or "fewer," however it looks like that is the world we now live in. If, as opposed to recent trends, the Town begins to experience healthy economic growth like it has in some past years, the Finance Committee would be happy to be wrong. For now, however, the logic and need for level or even reduced budgets are clear and compelling. We seriously question whether we can afford to have the highest cost union high school district in the state, and even more so in this period of declining enrollments.

Source: vermont.education.gov web site plus SD budget working documents. Note: Figures are for the union district, about 2/3 of which students are from Brattleboro. While based on a straight student count, the formula for “equalized pupils” gives less weight to pre-kindergarten pupils and extra weight to students in secondary school, those from economically deprived backgrounds, and those whose first language is not English.

*Please note: Property taxes cover most but not all of each budget. Other revenue includes the use of reserves and, on the schools side, state and federal special education money. Additionally, there are grants plus a wide array of minor income sources, such as fees and licenses.

**The increases in the tax rates are estimates and will not be finalized until later this winter and spring. Note: The police/fire station upgrades will have a more significant impact on the Municipal budget in FY2015, the first year when both principal and interest is due.

Note: The BUHS bond was refinanced within the last couple of years and there will be a one year reduction of $800,000 in FY2015. The use for those savings will get decided at the February, 2014 BUHS annual meeting.

Note: Two-thirds of Brattleboro homeowners receive some kind of property tax adjustment through Vermont's income sensitivity program and another 580 households receive renter rebates.