By Guy Page

Many centrist voices in the Vermont State House – including the Campaign for Vermont, former Vermont Commissioner of Finance Tom Pelham, and Gov. Phil Scott – say voting no on local school budgets is understandable this year, given the looming 15-20% increase in the 2024 statewide property tax.

Inflation, increasing staff costs, universal school lunch funding, loss of federal Covid-era funding, and (now repealed) tax cap that encouraged heavy spending without significant penalty all contributed to an unprecedented statewide property tax hike, taking effect in July. The severity, if not the cause, of the statewide property tax crisis is relatively well understood. What is less well understood is what happens next if voters reject a school budget.

VDC powwowed with lawmakers on education and tax committees this morning. We think we have an answer to the question of ‘what next?’

A school board experiencing a rejected budget must prepare a new budget –  presumably but not required to seek less money than the original. This budget must be warned for a vote. If voters reject the budget a second time, another cycle of budget revisitation, warning and voting will take place. The cycle will continue until the voters say ‘yes.,’ assuming they ever do.

However, as of July 1 a new fiscal year begins. School districts will need funds to operate. Against the possibility of having no approved budget by then, Vermont law allows school districts to borrow up to 87% of the current year’s school funding. Districts would borrow these funds a month at a time, for as long as necessary. 

Historically, very few Vermont school districts have repeatedly rejected school budgets. Should 2024 prove an exception to the rule, voters and elected officials may be learning more about the ins and outs of the 87% Solution.