School districts ask Legislature for changes

School district officials are calling on the Legislature to take immediate action to help alleviate potentially devastating school tax rate increases expected for South Burlington and towns that make up the Champlain Valley School District, driven largely by the state’s newest common level of appraisal estimates that are compounding the implications of Act 127.

In a letter to the state delegation, school district members and city councilors in South Burlington say that the impact of Act 127 “paired with a drastic decrease in the CLA this year has resulted in an unprecedented proposed homestead tax rate increase of more than 18 percent in South Burlington.”

“With budgets finalized in the next week and voters considering their options on Town Meeting Day, state relief is needed now,” the letter reads.

The top brass with the Champlain Valley School District is drafting a similar letter, expected to be sent this week, that will ask for assistance from the state, according to Gary Marckres, the chief operations officer with the district. Board chair and House Rep. Angela Arsenault also says she has been involved in several conversations with other lawmakers on the new CLA impacts.

Like South Burlington, taxpayers in the five towns composing the Champlain Valley district — Hinesburg, Charlotte, Shelburne, Williston, and St. George — are staring down an 18 percent school rate tax increase. Thirteen percent of that would result directly from the state’s newest common level of appraisal, or CLA, estimates, Marckres said.

“It certainly has bigger implications statewide from an affordability standpoint,” he said.

Without a change, the districts are left with few options. With the new spending formula and dramatic decrease in the CLA, even if the school district had presented a 0 percent increase in spending this year, residents would still see a nearly 13 percent tax increase.

The two districts are among a handful in Vermont that are facing daunting financial realities over the next five years in the wake of Act 127, Vermont’s new education formula signed into law in 2022.

Because of that legislation, districts that have historically benefitted from the state’s pupil weighting system — Champlain Valley, South Burlington, Essex and Mount Mansfield Unified Union among them — are now facing dwindling funding based on revised weighting counts.

The state implemented measurements to give districts leeway to right size their budgets. A 10 percent per-pupil spending limit and a 5 percent pre-CLA tax increase discount until fiscal year 2030 was supposed to help prevent double-digit increases to their tax rates.

But the new CLA figures are a gut punch to districts that expected to only add that 5 percent tax increase to their budgets.

“Although there’s nothing we can do, it’s certainly impacting all of the taxpayers in our district,” Marckres said.

The common level of appraisal compares the assessed value of properties on the grand list to the actual property sale prices considered to represent fair market value. If the two are the same, the CLA ratio is exactly 100 percent. If the properties are sold at a price higher than what it is assessed for, then the ratio drops below 100 percent.

The housing market has skyrocketed in years since the pandemic, with home sale data continuing to rise by high single or low double digit percentage points for years. Because of this, towns’ CLA figures have seen dramatic decreases, even after conducting town- or city-wide reappraisals.

“The CLA negatively impacted roughly 90 percent of school districts in Vermont,” said South Burlington School Board chair Kate Bailey. “Right now, as we’re discussing fiscal year 2025, we need to focus on the CLA. I do think we need to talk about Act 127 because we’re getting the double whammy of both, but I think that our ask for this letter that we really need to get out as soon as possible should be very focused.”

South Burlington, which conducted a full reappraisal in 2021, saw its CLA drop by 11 percent from 92.97 last year to 82.54 — meaning South Burlington properties are considered undervalued by 17.46 percent.

One of the factors for this is the lack of adequate housing inventory in South Burlington, explained Tim Jarvis, the district’s senior director of finance and operations.

CLA changes in the Champlain Valley are even more dramatic. Hinesburg’s CLA dropped from 78.23 percent to 67.65 percent, and Shelburne’s from 77.23 to 68.70 percent.

Charlotte properties are overvalued, according to the state. Their figures last were 119.26 percent after conducting a reappraisal. That dropped to 104.49 percent.

The tax implications of Champlain Valley’s budget would have residents in Hinesburg paying $356 more in school taxes per $100,000 of assessed value. Shelburne taxpayers would pay $304 more, while Charlotte residents would pay $216 more, according to school officials.

“Although we support the spirit of Act 127 and appreciate the temporary 5 percent cap on the pre-CLA tax rate, it is difficult to celebrate a tax rate that could have been 28 percent lowered only to 18 percent as neither are popular nor feasible increases for our community to support,” South Burlington’s letter reads.

South Burlington approved its budget for town meeting day at its last meeting. Champlain Valley is expected to approve its budget at a meeting later this month.

Education

Sizeable tax increase anticipated for South Burlington

• Liberty Darr | Staff Writer

In their letter, South Burlington officials are asking the state to consider a CLA impact cap to prevent further dramatic increases to the tax rate.

“This will provide more predictable budgeting and tax rates that our community can support,” South Burlington officials said.

If the South Burlington district were to roll over the fiscal year 24 budget of $62 million, they would be forced to cut or reduce nearly $6.6 million in critical programming within the district: transportation, world language programs, arts and AP courses, athletic programs, and a pause in proposed advances in literacy programs.

Through conversation with representatives, superintendent Violet Nichols said the CLA has been a factor that’s isolated as a lever for potential change.

“Act 127 is an extremely complicated formula, and it took over a year to develop and the agency of education hired numerous staff members to craft it,” she said at a council meeting last week. “We’re not expecting any overnight shift on any of these factors for fiscal year 25 but am I hopeful that there could be a CLA cap for fiscal year 26? Absolutely.”

“Would that have serious positive impacts on our schools and our ability to maintain programming? Yes,” she added.

Officials with the Champlain Valley district say they appreciate the theory of Act 127: “We think that resources should go where they’re most needed,” Marckres said.

Still, the impacts are beginning to be felt. The district in its budget includes five teacher reductions based on enrollment projections.

“There will be a process where those reduced positions will have placement options, and they may not be in the exact level or even sometimes the exact school that they have taught in the past,” he said. “But we anticipate having enough attrition in retirement to be able to place those positions.”

Arsenault said the school board has “worked very hard with our administrators to craft a responsible budget that delivers the programming and support our kids and employees need, in the face of an extreme set of external factors.”