by Joe Iadarola
District voters will be asked to approve the FY26 SVUUSD budget, that again includes an increase in spending. While the District claims prudent management to mitigate expense increases, taxpayers are frustrated with upward trends in spending. Prior to casting your votes, consider the following regarding District spending on education:
- Between FY23 and FY25 Total Spending on education increased from $26.2MM to $30.5MM or 16.4%; Education Spendingincreased from $21.6MM to $26.3MM or 21.8%.
In FY25 Education Spending increased 13.2% over FY24, resulting in an increase of 12% in our District’s education taxes. To mitigate the actual increase, $400,000 of surplus funds were used to offset declines in Local Revenues, without which Education Spending (and taxes) would have increased by a greater amount. Note: The FY26 budget uses $700K of surplus to offset spending and tax rate increases.
- FY25 per pupil Total Spending was $24,754 (based on actual pupils not the State’s LTWADM formula which understates cost per actual pupil). The FY26 budget includes an additional 7% increase, resulting in a 29%+ increase between FY23 and FY26.
- From FY23 to FY25, Homestead Taxes increased from $4.75MM to $6.0MM (26.4%). Non-Homestead Taxes increased from $8.3MM to $9.6MM (15.7%) (combined increase 19.1%). Furthermore, the State’s contribution to District Education Spending, increased from $8.3MM to $10.4MM (25.3%). The State has been funding an increasing percentage of Education Spending (35.3%-FY22 vs 40%-FY25), offsetting the need for even greater education property tax rate increases.
Regarding the FY26 budget and comparison to prior years: - Administrative Expenses: The budget includes $4.9MM of administrative expenses, a 9.8% increase over FY25. Between FY24 and FY26, administrative expenses increased from $4.1MM to $4.9MM, or 19%. These expenses comprise 15.3% of the budget. The main drivers of these increases include:
- The Office of the Principal expenses total $2.5MM, increases of 6.2% over FY25 and 15% over FY24.
- District Executive office expenses total $451K, increases of 6.2% over FY25 and 14.6% over FY24.
- Fiscal and Personnel Service expenses total $756K, increases of 7.9% over FY25 and 18% over FY24.
- Instructional Curriculum Development & Instructional Staff Training expenses total $461.4K, increases of 22.2% over FY25 and 31.2% over FY24.
- Public Info Services expenses total $119.5K, increases of 13% over FY25 and 39.5% over FY26. One clearly needs to question if this is an essential service.
Salary and benefit costs (including health insurance) are driving these increases. However, over the past two years many expenses above have grown faster than the 14.2% growth in Direct Instruction, Special Education and Vocational Education spending. The District asserts they lack control over many of these costs and they are not excessive relative to other districts. If that’s the case reductions across all budget areas including staffing, need to be weighed against these increases.
- Support Services: The budget includes $1.24MM for support services (Nursing, Psychological Service, Speech Pathology, PT, OT, etc.), an increase of 5.8% over FY25 and 23.5% over FY24. Large notable items include:
- Nursing Services total $658K, an increase of 11.9% over FY25 and 35.4% over FY24.
- Speech Pathology total $395K, an increase of 6.1% over FY25 and 18.6% over FY24.
The cost of internally staffing these functions is very high. Nursing Services salaries total $425K, with benefits and other cost totaling $233K. Speech Pathology salaries total $263K, with benefits and other cost totaling $132K. These are clear areas for consolidation and/or outsourcing yet it’s unclear if any of these alternatives have been seriously explored to reduce expenses.
- Other Support Services-Students: This expense is budgeted at $1.4MM, an increase of 48% over FY25. Between FY24 and FY26, expenses increased from $714K or 97%! This is certainly an area where expense growth has been extraordinary and needs to be further evaluated. If this level of service is essential, staffing levels or other areas in the budget need to be considered for reductions.
- Health Insurance Costs: Health insurance will increase 21.2% to $4.462MM in FY26. Since FY24 health insurance costs are up 48%, and now represents 14% of the budget. The District currently pays 80% of premiums for teachers and administrators (along with an HRA). These metrics are extraordinary and unsustainable. Voters are justifiably upset with having to fund generous benefits while paying significantly more for their own health care costs.
- Other Areas for Consideration:
- Programs that don’t meet the mandate of fundamental education services need to consider alternative funding sources. For example, athletic and co-curricular programs including transportation are budgeted at $759K (20% increase the past 2 years). We should consider requiring extracurricular programs to be fully participant funded, outside the budget. Restructuring funding for these activities will be unpopular, funding within the school budget may no longer be viable.
- Are there options within teacher contracts for cost savings? These contracts are significant drivers of expense increases and need to be more prudently negotiated and approved. Future teacher contracts need to have provisions for flexibility in managing expenses. Contracts need to rein in items like fixed salary increases, generous benefit coverages, and uncapped increases in benefits, to provide greater fiscal flexibility.
Finally, the real cost of spending increases on real estate tax rates needs to be better explained to voters. While preliminary tax rate communication from the District indicates the FY26 budget will not materially change towns’ education tax rates, the reason for this result is less transparent.
The State’s FY 26 homestead education tax rate actually increased 22% (1.1283-FY25 to 1.3776-FY26). If town Common Level Appraisal (CLA) factors alone were applied to the State’s rate, towns education tax rates would be significantly higher. For example, applying Castleton’s 0.6144 CLA to the State homestead rate, results in a town homestead tax rate of 2.2422.
To offset this potential increase, for FY26 Vermont is “buying down” the effect of the State homestead tax rate by applying a 0.7236 adjustment (SACLA) to each town CLA. For Castleton, this lowers the homestead tax rate to 1.6225, only marginally higher than FY25. Without this adjustment, all District town homestead education tax rates would be 38% higher.
The District’s tax rate message leaves voters to believe expenses have been effectively managed to mitigate tax rate increases. The truth is increased education spending in our District and throughout Vermont is driving underlying tax rate increases that should concern all taxpayers.
Education spending is clearly excessive in the District and State. Many in our District and districts across the State, feel it’s again time to say, “enough is enough”. Ask yourself if the District is prudently managing our tax dollar? Since local control still resides with District voters, taxpayers are encouraged to carefully consider all the facts prior to casting their votes for the FY26 Budget.
Finally, we should applaud and support the Governor’s proposal to dramatically alter the education funding model in Vermont. The current model is inefficient and unsustainable. There are clear areas for significant saving that will make Vermont more affordable for all residents and taxpayers!