MONTPELIER, Vt. — The Act 46 lawsuit officially reached the Vermont Supreme Court last week when attorneys representing 33 Vermont school districts — including Athens, Grafton and Westminster — filed their appeal.

Filed on Thursday, Aug. 15 by attorneys David Kelley and Stephen Coteus, who represent the school districts, the appellants’ brief argues on multiple grounds that Act 46 is unconstitutional legislation and that the Vermont Agency of Education and Board of Education acted without authority when forcing school districts to merge.

The arguments in the briefing mirror those heard by Vermont Superior Court Judge Robert Mello, who in June upheld the constitutionality of Act 46.

The appellants’ brief, along with the printed case from the Superior Court docket, detail the argument made by the school districts to date and Judge Mello’s reasons for dismissing them.

‘A reversible error’

Kelly and Coteus focus on a particular section of language in Act 46 that directs the Agency of Education to create a plan that “would move districts into the more sustainable, preferred mode of government,” which Act 46 defines as school districts comprised of at least 900 students and a single school board.

That section also includes three words of importance to Kelley and Coteus: “Necessary,” “possible” and “practical.”

The actual language of Act 46, Section 10 directs the agency to present “a plan, to the extent necessary to promote [Act 46’s] purpose ... ”

The school districts’ argument interprets “necessary” as what is “necessary” for the school districts.

“This plan must propose forcibly merging districts only where it is ‘necessary,’ ‘possible’ and ‘practical,’” the brief to the state Supreme Court states. “The Agency explicitly stated it was proposing merger when ‘possible’ and ‘practical,’ and its plan included no analysis of whether merger was ‘necessary’ for any district.”

When this was argued in Superior Court, however, Mello dismissed it, saying that the attorneys took the language out of proper context.

“Properly understood, one overarching objective of Act 46 is to merge the school districts,” wrote Judge Mello, “The Legislature already has made the determination that such mergers are necessary to achieve, among its stated Goals, economies of scale and quality of education for Vermont’s student population.”

The Superior Court’s interpretation served as a foundation to dismiss related arguments by the school districts, including their assertion that Act 46 required the Board of Education to consider school districts’ proposals for an “alternative structure,” which Act 46 defines as a supervisory union with member districts each retaining their own school board. For the districts in the Windham Northeast Supervisory School Union, this alternative plan, which they proposed in November 2017, would have kept their structure essentially the same, though the districts would work to increase efficiency and effectiveness through increased collaboration between their school teams.

In the Superior Court’s finding, Mello wrote that Act 46 did not hold the Board of Education to approve alternative proposals. Rather the intent of “alternative structures” was only to give the Board flexibility should there be a district for which merging was not possible or practical.

According to Kelley and Coteus, should the Supreme Court find that the Agency and Board wrongly interpreted Act 46, then it is a “reversible error” and that any merged school districts should be allowed to revert to their previous structure.

Assets and debt

There are several different arguments in the appellant’s brief in regards to financial unfairness. One in particular argues the unconstitutionality of districts assuming the debt of other districts through merger. In their introduction Kelley and Coteus cite the merger of East Montpelier, Berlin, Calais and Worcester. In that merger, they say, the towns of Berlin, Calais and Worcester had to assume 50% of a $7 million bond debt from East Montpelier, which would have to be paid off over the next 20 years.

Kelley and Coteus said that this was not just a matter of unfairness, but a constitutional violation, because this money was passed onto the other school districts without the ability of those district voters to vote whether to approve that money.

The Superior Court, however, ruled this premise as a “mischaracterization of the merger transaction.”

“School district mergers do not result in the direct imposition of one municipality’s debts on another municipality,” the finding stated. “Existing debt is transferred to the newly created trustee school district.”

The Superior Court’s ruling stated two points. One was that a merged district is a new entity, and the former individual district entities no longer exist. Additionally, the ruling stated that in actuality, assets and properties are owned by the state, not the school districts. The districts are not owners but trustees of the state’s holdings.

For this reason the Superior Court said that the transfer of debt did not violate the constitution, because it was not a transfer between municipalities, but to a new school district.

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