Windsor School

WINDSOR, Vt. — The Windsor school board this week tied itself in knots over an expected tax rate increase for the 2019-20 budget year, first approving and then rescinding a plan to use $300,000 in capital reserve funds to help mitigate an expected property tax increase for Windsor voters of about 24 cents on a home of average value.

The board’s dilemma was that on July 1 all its assets and obligations will go to the new Mount Ascutney school board that combines the Windsor and West Windsor school districts. While that may be fine for normal operating expenses, the capital reserve fund was approved by Windsor voters only for use on Windsor school capital projects. The new board might not even have the legal authority to touch that fund, board members thought.

Superintendent David Baker recommended that a legal opinion be solicited on that point, and whether the Windsor-only fund could even continue in that manner. Even if it did, once the transition is completed to the new two-town district, no new funds could be added just for Windsor’s benefit.

Baker, along with business manager Ed Connors, has been going around to the school boards within the Windsor Southeast Supervisory Union to advise them about their budget requests for 2019-20. Although the Windsor and West Windsor districts are putting up individual budgets to their voters this year, the funds and districts will be formally combined into the Mount Ascutney single board on July 1. The board has already been meeting as a transitional board.

The latest estimates, according to Baker, showed a tax rate increase for Windsor voters of about 24 cents, based on a rate of $1.4295 per $100 of property value. (The rate for West Windsor is $1.4833, a decrease of 37 cents, and both figures may be modified by the state figure called a common level of appraisal, or CLA.)

“That is a significant tax increase,” board member Sherrie Greeley said Monday.

Baker told the board to figure that about $45,000 to $50,000 equaled one cent on the tax rate. “To influence the tax rate by, say, five or six pennies, you’d have to move about $300,000,” he said.  

The board then discussed whether it was good idea to use $300,000 from the capital reserve fund for that purpose, considering that it would not only drain down the fund, but create a bigger differential the following year, creating a “roller-coaster” effect.

Eventually, the board voted unanimously to add an article to Windsor’s annual school meeting warrant, asking only Windsor voters to create this “tax stabilization fund” of $300,000 from the capital reserve fund.

By Thursday, however, somebody apparently had a change of heart, and the board suddenly met again in a special meeting (characterized by the town as an “emergency meeting.”)

This meeting was attended by Connors as well as Baker. According to the draft minutes of this meeting, “Ed Connors’ concern is this is money we put aside and built up over the years. If we give the $300,000 to the town, it will only provide about a 4-percent savings on the tax rate. You will not be able to replicate it again next year. If schools do not run a surplus they are looking at a 10-11 percent tax increase each year.”

The capital reserve fund has more than $800,000 in it, according to Baker. Much of it is already earmarked, however. At a previous meeting the board apparently added $293,000 to the budget for a new athletic track, and at Monday’s meeting school facilities employee Jim Taft told the board it needed to upgrade the fire alarm and sprinkler system at a cost of $65,000 to meet state standards. Taft also explained that some building roofs will need repairs in the future.

The board voted to use $65,000 from the capital reserve fund for the fire system project.

At Thursday’s meeting, board chair Amy McMullen mentioned she spoke with Town Manager Tom Marsh “who received information that the prebate for the Windsor grand list increases by the amount of the budget increase and will not feel the impact of the tax increase,” according to the draft minutes.

Towns have two different tax rates, one for residents (“homestead”) which account for 63.75 percent of Windsor taxpayers, and one for nonresidents, which are 36.25 percent. Homestead payers get the “prebate”, and nonresidents do not.

Connors said, according to the draft minutes, “over 60 percent of Windsor taxpayers will not be affected by the tax increase.”

McMullen asked for a motion to remove the tax-stabilization article from the Windsor meeting warning. Board member Carl Malikowski made that motion, which was seconded by Greeley. The motion passed.

The town will hold a final budget hearing on Jan. 16 at 5 p.m. 

Windsor’s annual school meeting is scheduled for Mon., March 4, prior to the town meeting for the municipal budget. Voters then go to the polls the following day to consider the budget items that require a ballot vote.

(2) comments

Silas

In regard to the statement "At Thursday’s meeting, board chair Amy McMullen mentioned she spoke with Town Manager Tom Marsh “who received information that the prebate for the Windsor grand list increases by the amount of the budget increase and will not feel the impact of the tax increase,” according to the draft minutes." does this mean the prebate won't feel the impact of the tax increase, or imply the taxpayers won't feel the impact?

Editor Staff
Editor

First of all, the remark by Amy McMullen reported in the draft minutes of the meeting reflects second hand information and may be imprecise. What Marsh is said to be referring to, however, is an education property tax adjustment for homesteads with less than $75,000 of annual income, called a prebate. The name refers to the fact that the checks from the tax department generally arrive about a month before the property taxes are due. The concept is to make school property taxes more income sensitive. (This is separate from state rebates for household incomes under $47,000.) What Marsh appears to be stating to McMullen is that enough taxpayers in Windsor receive the prebate that the actual impact of any school tax rate increase is less than it might seem.

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