1. School Finance Presented By: Vermont School Boards Association

2. Key Assumptions • Connection between per pupil expenditure and homestead tax rate • Taxes will be paid on the lesser of either income or property value for 75% of residents

3. Getting Started • Board clarifies expectations for education programs • Board identifies increase taxpayers may support and states this to administrators • Administrators develop budget to deliver programs within board parameters • Leadership team decides financial implications of the budget

4. ORGANIZATIONAL FILTERS ETHICS/VALUES ROLES/RESPONSIBILITIES VISION/MISSION DECISION MAKING POLICY/PROCEDURE STRATEGIC PLAN ACCOUNTABILITY

5. CORE VALUES • Adults and students will take responsibility for their actions. • All members of the school district will behave and be treated in a professional and respectful manner. • All members of the district must learn and understand their respective roles and responsibilities.

6. CORE VALUES • The district will clearly define and communicate its vision, mission, and objectives. • The district will focus on outcomes and the achievement of its intended goals.

7. ROLES & RESPONSIBILITIES Effective boards focus time in 6 areas: • Represent community: • Two-way communication • Listen and reflect • Advocates for public education • Establish the expected results: the district exists to make a difference- board determines what that difference looks like for students

8. ROLES & RESPONSIBILITIES Effective boards focus time in 6 areas (con’t): • Establishing limits for district operation • Hires superintendent to achieve results • Governs own process as board • Monitors and is accountable to community

9. VISION & MISSION Must make Vision & Mission living documents: • Identify Measurable Outcomes • Identify Indicators of Progress • Agree Upon Targeted Timelines • Require Appropriate Feedback

10. POLICY & PROCEDURES • Clearly articulate policies and procedures • Establish a renewal cycle • Review VSBA model policies on the web site – www.vtvsba.org

11. STRATEGIC PLAN

12. ACCOUNTABILITY • There is no substitute for achieving results • Explicit feedback mechanisms to outline how the school district is achieving its mission and vision and whether or not its performance is satisfactory

13. Connecting Strands • Link from budget to: • Core Values • Vision and Mission - Active • Strategic Plan • Accountability Feedback • Target Activities • Monitoring Process

14. Act 68 Overview

15. Money In HomesteadProperty Tax Non-Resident/ BusinessProperty Tax General Fund Lottery Sales Tax Education Fund

16. Money Out Bristol Bennington Barre Brattleboro Bethel Education Fund

17. Homestead Tax Money In Bristol voters Act 68 Legislature Per PupilCost BaseAmount BaseRates Grand List and CLA OtherSources Education Fund

18. Sources of Vermont School Revenues

19. Cost Drivers • Programs • Regular, SPED, Tech. Ed. • Functions • Processes and Activities • Student and Staff Support • Objects • Salaries, Benefits, Materials

20. Annual Health Insurance Increases

21. Annual Special Education Increases(K-12 Service Plans)

22. School Spending Patterns Change(Personal Income Growth 4.7%)

23. Education Fact Sheet Demonstrates Equity Between High and Low Spending Districts

24. 75% of Budget is Fixed by the Negotiated Contract Options for Substantial Cost Reduction: Eliminate Programs Increase Student/Teacher Ratio

25. VSBA Negotiations Resources

27. Password Information UserID: “VSBA8” Password: “2008”

28. Northern Vermont • Base Salaries • Bachelor Highest Salaries • Master Base Salaries (This is base salaries)

30. Per Pupil Spending & Equalized Tax Rates

31. Movement in Tax Amounts

32. Equalized Pupil Weights

33. Student Enrollment Trends

35. Excess Spending Threshold FY 2008 - $12,594 FY 2009 - $13,200(est.) (Statewide avg. of $10,660 increased by 25%)

36. Interactive Budget Spreadsheet

38. 2008 State Tax Rates • Homestead tax rate = $0.87 • Non-resident & business tax rate = $1.36 • School budgets do not impact non-resident and business tax bills

39. Non-resident Tax Rate • CLA impact same as homestead tax rate • Fund raising doesn’t help any more – No financial advantage for benefactor

40. Non-Resident CLA Impact $1.36 Non-Resident & Business (No income sensitivity provisions) Town A (90% CLA) adjusted tax rate $1.36/0.90 = $1.51 Town B (80% CLA) adjusted tax rate $1.36/0.80 = $1.70

41. Eligibility for Income Adjustment • 2007 tax return $90,000 or less based on entire house site value • Income over $90,000 eligibility based on first $200,000 of house site value

42. Income Sensitivity • Homestead income less than $90,000 - • Tax credit subtracted from school tax bill • Based on 2007 income and FY 2009 school budget • Homestead income less than $47,000 of total tax bill • Combined municipal and adjusted school tax must not exceed 5% of income

43. Example 1 - $10,404

46. Town Rebates and Prebates http://www.state.vt.us/tax/pdf.word.excel/pvr/reports/2007/TaxAdjustmentSummary_PrebatesAndRebates.pdf Income Sensitivity Web Resources

47. What is CLA?

48. Common Level of Appraisal • Common Level of Appraisal • Town grand list divided by the state equalized grand list • Used to equalize property values and resulting tax burdens throughout the state • Statewide average CLA 82.39%

49. Effect of CLA on Tax Rates

50. Under Act 130 • Homestead tax collected by town • Elem. & secondary districts each have own tax rates (don’t avg. rates) • Districts determine ed. spending per pupil • Based on grade range of district • Prek -12, K-6, 7- 12, 9-12, etc.