Senate plan: school districts without 2021 budgets may level-fund

by Guy Page

April 29, 2020 – Many Vermonters have been wondering how towns that voted down school budgets, or had votes scheduled before social-distancing was required, will set their budgets for the coming year. The Legislature is working on that – and (as often happens) the House and the Senate have different solutions for the same problem, Rep. Maxine Grad (D-Moretown) reported April 28:

Nineteen Vermont school districts are in limbo, without a budget in place for FY21 (nine were defeated, ten had yet to vote when the pandemic put ballot plans on hold). As of today, the House and Senate Education Committees have two different ideas in play.

The Senate would establish a default budget based on current FY20 levels, while allowing districts to seek voter approval for new budgets after June 30.

The House would give the district boards three options: 1. Use the FY20 amount; 2. If the budget was defeated, adopt an FY21 budget at an amount that’s lower; or 3. If the budget was warned but not yet voted upon, adopt an FY21 budget at an amount that doesn’t exceed. In any of these three cases, the board could simply make the call, or take the budget to voters via one of the methods allowed by the Secretary of State.

According to Grad, “there is support for the more-flexible House version from superintendents and board chairs in these districts, as well as from the Vermont NEA, and the Vermont School Boards Association. It’s our belief that it puts these districts on a more-level playing field with districts that were able to vote their budgets pre-pandemic.”

2020 education revenue down $40 million, shortfall expected next year

On April 9 the Joint Fiscal Office outlined the expected Education Fund shortfalls for this year and 2021: “The EF is now projected to close FY2020 with a $39.5 million deficit. Moreover, if $53.5 million in deferred consumption taxes are not fully remitted to the State at the end of June, this fund deficit could grow even larger. In FY2021, COVID-19 related loss of consumption tax revenues is expected to be even more severe. In addition, the collection of property tax revenues is uncertain because many property taxpayers may be unable to make timely payments.”

“Voters have already approved a $73 million increase in education spending in FY2021. Even if it were possible to reduce education spending next year, those efforts could be constrained by existing teachers’ contracts since salaries and benefits alone account for nearly 80% of education spending.”

A JFO update on projected revenue is expected soon, and will provide a basis for legislative spending decisions, lawmakers soon.

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