A Real-Life Act 46 Experience

Last night I attended a public forum at Saint Albans City School about the Franklin Central Supervisory Union’s consolidation plan. It was the first time I had seen one of the proposed plans in any detail and I have to say it was reassuring on a number of levels. Saint Albans City School board chair James Farr and Fairfield board member Michael L’Esperance did much of the presentation, along with other board members and Supervisory Union Superintendent Kevin Dirth.

1. The Boards and Administrators Get It

Act 46 has a lot more to do with achieving equity between towns, than it does dramatically decreasing property tax rates or school costs. While the Act 46 Committee did estimate nearly $250,000 in efficiency savings by consolidating into one districts, they were quick to point out that this is a conservative figure and that they don’t anticipate big savings from consolidation in the first year.

2.  The Smallest Town Has A Lot to Gain, But…

Fairfield has about 230 students and the proposed district will be about 2700 students. Saint Albans Messenger reporter Michelle Monroe pointed out that Fairfield has struggled the most with the current relationship between property tax rates and per pupil spending. The loss of a handful of students two years ago caused a 20 cent tax increase even though the school budget didn’t go up at all. The new district would spread the impact of population over all three communities (Saint Albans City, Saint Albans Town and Fairfield).

There will have to be equity in programming, class offerings and educational opportunity among the three elementary schools- and that’s the biggest opportunity for Fairfield in the new district. The hard part is that there will be 9 votes on the new consolidated School Board: 4 Town residents, 4 City residents and 2 Fairfield residents with 1/2 vote each. All members will be elected at-large, which means the two big towns will be able to elect the two Board members from the small town. That was a bit unnerving to some Fairfield residents, but Jim Farr was quick to say- “Every town has 9 votes representing them, we’re going to be one district.” Still, if voters in Fairfield choose to keep riding the tax roller coaster in order to maintain local control, then the plan will fall apart because all three towns must approve the plan for the merged district to be approved on Town Meeting Day.

The Act 46 Committee for Franklin Central S.U. presents their plan for a consolidated district to the public at a forum 12/02/2015

3. The Tax Savings Are Real…

… and those districts who don’t get the benefits by consolidating will end up paying for those benefits to other districts. For a Saint Albans City resident with a $200,000 home the 10 cent break on the penny rate in the first year will be worth about $200, and the projected savings over five incentivized years would be about $1000 for the owner of a $200,000 property in the City or Fairfield and over $1400 for the owner of a similar property in the Town. However given the fact that most homeowners pay based on income I don’t think that the majority of people will see a huge difference in their taxes because of this plan.

Act 46 is going to give the new district’s school board members flexibility and options they never have had  in our one-building-per-district model. We have four school districts and five boards that will now become one unit, with one budget- assuming that the plan is passed in March by all three towns. The transition is going to be tough, but as one City School board member told me after the meeting “we have actually already been working on this for years but none of the prior initiatives passed by the state had enough carrot or stick to work. The only part of act 46 I don’t like is the spending caps.”I imagine we’re not the only Supervisory Union in Vermont where that’s the case.

About Mike McCarthy

I'm a guitar-playing Democrat living in Saint Albans, VT with my wife Steph and my daughter Molly. I represented Saint Albans in the VT House in 2013-2014. I care about good government, and a safe, healthier world for all of us. I work for an awesome solar company and love helping Vermonters re-power our communities.

7 thoughts on “A Real-Life Act 46 Experience

  1. Mike, I have a couple of questions for you based on statements you made.

    “There will have to be equity in programming, class offerings and educational opportunity among the three elementary schools.”

    Q. Could you give an example of what will be done differently under a unified school board? My understanding is that Vermont’s schools have been implementing Common Core and the supervisory unions have hired curriculum coordinators to ensure that all students entering high school with the same skills and experiences.

    “… the 10 cent break on the penny rate in the first year will be worth about $200, and the projected savings over five incentivized years would be about $1000 for the owner of a $200,000 property in the City or Fairfield and over $1400 for the owner of a similar property in the Town.”

    Q. How did you arrive at the $1,000 figure? Does this take into account the stepped down deduction over the 5-year period?

    Q. Since the base education rate is set by the state, and the merger tax incentives are taken from the Education Fund, which would create a deficit in the Education Fund, isn’t it entirely possible that the base rate will be raised in Years 2-5, effectively balancing out the 8/6/4/2 cent deductions?

    Lastly, does the makeup of the proposed new board, dominated by St. Albans, increase the likelihood that the Fairfield school will be closed in the near future?

    1. Hi Daniel. Great questions. I’d encourage you to follow up with Kevin Dirth, the Superintendent or Jim Farr who is chairing the committee. I’ll do my best to answer though.

      Equity: Lots of examples given on how things could be done differently. By sharing foreign language, music and other programs with the bigger schools there could be a lot more educational offerings throughout the new district. Kevin Dirth gave the example that if one school building has a master plumber in their custodial staff, that person could go do work in the multiple buildings and reduce the need to hire out.

      Tax Incentive: The $1000 figure does take into account the phase-out, according to the committee’s presentation but it does not take into account the vast majority of savings that could be achieved under a unified district. They only estimate $250,000 over 5 years would come from direct “low-hanging fruit” efficiencies (without the tax credits). I bet there will be more.

      Faifield; There is NO indication that Fairfield would ever remotely be considered for closure. That is a non-starter for this conversation and I think the articles of agreement forbid it, but I’d have to check.

      1. The Statewide Piece: Yes, it’s true that if every S.U. consolidated the base rate would have to go up. However, I think a lot of districts will choose to hang on to their small governance structure and end up paying for the incentive in new merged districts like the one I live in.

      2. In my district (ARSU – I live in Orwell), we share foreign language, art, music, and gym teachers between Orwell and Benson. These are the daily specials among the base classes of math, English language arts, humanities, and science. As these are offered only one period per day on a rotating schedule, it makes sense to share these resources between two schools. Surely, this must be a similar situation between schools in other supervisory unions. As this is already occurring, I see no way this can be used to justify dissolving local school boards.

        I also do not see plumbing (or other maintenance type) staff as a reason to consolidate school boards. Large schools, with their substantial infrastructure, may require a full-time plumber, but small schools simply hire plumbers as needed.

      3. Well Mike McCarthy the reality is that Mr. Redondo is correct that when our State agreed to adopt Common Core back in 2010 verbatim, the Federal Government requires 85% implementation. The fundamental purpose of Common Core is to insure all students will arrive on the same page. Now despite the fact that Common Core is proving to be a disaster in our schools, given the fact that due to copyrights teachers are not allowed to make changes. Consequently there is neither the opportunity nor the time to augment these educational opportunities you speak of. Furthermore, schools are intimidated by the fact that the smarter balance assessments are now the driving force behind a schools adopted curriculum resulting with teachers teaching to the test whether they like it or not. Now, regarding your Act 46 claims of savings. Currently the lowest per pupil cost for the FCSU is St. Albans Town at $12,401.00 and the highest is BFA at $15,174.00. The new consolidated weighted average per pupil cost will become $13,508.00, which will be an increase of $1005.00 for St. Albans City, and $1107.00 for St. Albans Town respectively. Now it is facetious to ignore the fact that the tax reductions will sunset in five short years while the co-mingled budget is guaranteed to grow at an average rate of 2.5% each year, and will out pace the tax savings. Apart from an Act written so as to be almost unintelligible, Act 46 is quite deceptive because the tax rate reduction “bribe” will not help anyone who pays a Town education tax based on income sensitivity through the property tax rebate system, because if they pay less tax based on the “bribe” they will get back less from the State. Furthermore, the issue of closure will not be addressed by any articles of agreement due to the fact that said articles must comply with Title 16 chapter 11 which states the Articles may be amended by a simple majority vote of the new board after the fact. The issue of closure of the State’s small schools is the holy grail of act 46, and this is how it will be done to schools like Fairfield. Upon voting to merge the municipalities will surrender their schools to the new Regional Board for $1.00, and all local budgets will be co-mingled. The new Board will have the authority to relocate Fairfield students to fill classrooms in St. Albans schools which have room due to declining enrollment. Then the new Board will simply return the empty building to the Town of Fairfield for $1.00. The payment of $1.00 is to verify the legality of the transaction. Consequently, the Town of Fairfield will be forced to deal with closing the school, how to pay ongoing debt service, the refunding of hundreds of thousands of dollars in State construction aid, and a percentage of the selling price should Fairfield choose to sell the building. The new board will then re-allocate the operational funds of the no longer used Fairfield school to the remaining schools in St. Albans. Nice, neat, and simple, and of course the board representatives from Fairfield will not be able to prevent it. Does this continue to sound like a good deal??? Watch out Fairfield!!!!!!

        1. Jay, there is some cause for Fairfield to be concerned in the long run, but the Fairfield board chair Michael Malone was on the Study Committee and he and others from Fairfield must feel that the Saint Albans folks were not trying to pull one over on them when they committed to keeping all of the elementary schools in the S.U. open for the foreseeable future. It wouldn’t make financial or political sense to close Fairfield’s school. Two points I think you’re wrong on: 1) Your math about per pupil spending doesn’t make sense. BFA is a separate district under the current Supervisory union, but Saint Albans Town and City each pay apportioned school taxes to fund their union high school already. Fairfield pays tuition to BFA for 80% of it’s students. Merging the systems won’t increase the average per pupil cost- in fact bringing all of Fairfield’s students over time will help lower per pupil cost at BFA for everyone. 2) Debt service: If I understand it correctly, once the new district “buys” Fairfield’s school for $1 the debt service as well as the facility goes on the balance sheet for the new consolidated district. Rather than have something to fear, Fairfield has two bigger municipalities sharing their debt obligation. Spreading it out over a much larger number of tax payers should reduce the anxiety of Fairfield voters.

          1. Well Mike I’m afraid it is you that might not understand the risk. Let’s consider the possibility that the good citizens of Fairfield vote NOT to merge their school (out of fear that such a merger might cause the closing of their local school), and the State forces a merger some time after July 1 2017. There will no longer be any type of individual districts or budgets, Act 46 will dispense with all individual district configurations. There will be just one new “Regional Educational District” which will include all the schools of the FCSU, and will be represented by just one Board of Directors. The members of this new Board will be elected consistent with proportional representation requirements, giving St. Albans City, and Town four members each, and Fairfield two members. Needless to say all future decisions of the new Board will be dominated by St. Albans City and Town. All the previous school operational budgets of Fairfield, St. Albans City, and St. Albans Town will be co-mingled. As a result, there will be just one operational budget which meets the needs of all the schools. The effects on per pupil cost is calculated by making simple math computations in consideration of the total combined budget cost and total child count. You are correct that all indebtedness of the previous individual schools will become the shared obligation of the three municipalities that make up the new Regional Education District. However, the Regional Education District Board may at any time by majority vote relocate all the students of the Fairfield School to fill classrooms in St. Albans City, and St. Albans Town which have room due to reported declining enrollment. If Fairfield objects to this decision they will be powerless to stop it. This is where it becomes problematic Mike because the empty Fairfield school building will be returned to the Town of Fairfield. The citizens of Fairfield will have very few options and will be under tremendous financial pressure to sell the empty school building to pay off any outstanding debt. As I mentioned earlier, if the citizens of Fairfield choose not to merge due to concerns for the continued existence of their school the Town will incur the financial penalties of having to refund hundreds of thousands of dollars in construction State aid, and a percentage of the selling price. The fear of possible school closing is being trivialized by the recommendation of creating “articles of agreement” to prevent a closure. However, section 706n states any “article of agreement” can be amended at any time, by the majority vote of the new Regional Educational District Board. Act 46 is not the answer to lower taxes and in the end will destroy the future existence of several of the best performing schools in our State, with this one size fits all approach. Act 46 unfairly places Towns like Fairfield in a damned if they do and a damned if they don’t situation, with children paying the price.

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