2024 Report From the School Directors

January, 2025

As they say, it’s déjà vu all over again. It seems public discourse on Education Funding picked up this year where it left off. It remains a complex formula regardless of recent changes due to Act 127. For a refresher on how schools are funded, here is a concise video from Vermont Public.

There are further resources regarding education funding on the Lamoille North budget information page. This is an excellent resource to find all you need to know during this budget season.

Lamoille North FY26 Budget Information Page
It’s important to understand how different drivers beyond our own school budgets influence the tax rate. For example, there are several Tax Increment Financing development projects statewide. As an incentive for towns to invest in development to increase property values, they are allowed to keep 75% of the tax revenue from property within a TIF project (for a brief number of years). Only 25% of the TIF tax revenue then goes to the Education Fund. The difference must be made up by increasing tax revenue across the board to all towns. For FY25, the cost of TIF programs was $7.1 million, out of a total of $1.65 billion in property tax revenue. While the percentage impact is fairly small, only about 0.4%, it is still roughly equivalent in the expenses of a large elementary school like CES.

Another example of an outside driver are the capital improvement projects paid for through municipal bonds. Once a bond is passed and a capital project is completed, the repayment of that debt service becomes part of the budgeted expenses of a school district. For CES, our FY26 debt service expense will be $445K. The good news is that we are nearing the end of our debt repayment on our renovation bond. The bad news is that current capital projects in other school districts will continue to pressure the education fund going forward. At CES, we have several air conditioning units that will soon need replacement. To prepare for this, we’re proposing to fund our capital reserves with a higher percentage of our FY24 surplus than is typical (Article 6). We believe this is a responsible approach for us to avoid cumulative facilities costs that could lead to bonds down the road.

What is likely the largest influence on property tax rates is the fundamentally statewide nature of the education fund. We merely submit our relatively small locally controlled expense to a much larger statewide budget, the vast majority of which is beyond our control. The administrative team at CES does an excellent job proposing responsible spending for our consideration. If we inflate the budget so we “don’t leave money on the table”, our taxes will increase. If we slash the budget, our tax relief would be insignificant compared to the negative impact we would make on the school through lost programs and services. A responsible, balanced approach tends to net us the best value for our tax dollars.

The aforementioned drivers of the property tax rate are just part of the overall context that the Board considers when settling on a budget. We are pleased that regardless of inflationary costs, the FY26 estimated expenses for CES are only rising 2.4%. Similarly, at the Lamoille Union campus, estimated expenses are rising less than 1%. The resulting estimated post-CLA tax rate, as of this writing, is essentially flat (a 0.3% increase) year-to-year. We thank the community for its unwavering support for students at CES and the LU campus and ask for your approval on Town Meeting Day.

Respectfully Submitted,
Mark Stebbins, Chairperson