South Burlington voters reject school budget

A second try at passing a South Burlington school budget failed by 150 votes last week.

The final tally for the trimmed-down $69.5 million budget was 1,577 to 1,427. The school district’s March Town Meeting Day budget failed 2,856 to 2,072.

In what has been a challenging year for officials crafting school budgets after the Legislature implemented a new education funding formula known as Act 127 — then altered it just weeks before town meeting — South Burlington school officials will now have to grapple with even greater budget cuts as the community demands leaner spending.

“We have to be responsive to what the community needs and can afford, and we’ve had a great deal of conversation about the significant impacts of the legislative changes on our budget, and how a lot of these pieces are out of our control,” superintendent Violet Nichols said at a public hearing on April 3. “I think that dialogue has really changed as we came together as a community to look at what we’re presenting for the second vote.”

The second budget was cut by nearly $1.7 million from the district’s initial $71 million proposal, which saw an associated tax-rate increase of 23 percent drop to 14.5 percent. Of that $1.7 million decrease in spending, the board cut $848,186 in staff and programs, including a net reduction of 4.4 full-time equivalent positions, and a reduction of $814,705 to the district’s capital reserve fund, down from the $1.9 million previously allocated in the original budget.

“It’s 11.2 percent higher than the fiscal year 2024 budget,” Nichols said at the hearing. “You won’t be surprised to know that most of the cuts are associated with staff, which is about 80 percent of the district’s expenditures annually. We’re in a business of people supporting people with people.”

The $1.9 million of extra capital reserve money was made possible by Act 127, the new law that adjusted the state’s previous equalized pupil weighting system and caused headaches for school officials this year.

As districts with new low pupil weights saw dramatic tax rate increases due to the new formula, the law granted a 5 percent tax increase cap meant to soften the blow to districts that were affected negatively. The law also allowed districts a 10 percent per-pupil spending limit — meaning that the South Burlington school district could have spent anywhere from $63 to $71.5 million with the same exact effect on tax bills.

To maximize that spending cap, the board opted in January for that additional $1.9 million to be allocated for its capital reserve fund, which at the time did not negatively affect tax rates.

But the new law fast-tracked through the Legislature just weeks before Town Meeting Day removed that spending cap and instituted a different percentage discount that increased the city’s expected tax rate even more.

Additionally, the second budget also applied the $2.27 million surplus that the community voted to allocate to the district’s capital reserve fund on Town Meeting Day as revenue to offset spending.

“The only way that we could lower the tax rate increase impact was really to use the lever of using the fiscal year 2022 surplus allocated to revenue,” Tim Jarvis, the district’s senior director of operations and finance, said at a meeting in March.

Although town meeting voters approved allocating those surplus funds to the capital reserve fund, Jarvis said that the language on the ballot didn’t technically bind the board to that decision.

“What the voters approved was for the board to authorize using the surplus to put in a capital reserve fund. They didn’t mandate you to do that. They authorized you to do that,” he said.

Should a budget not pass before the start of the new fiscal year on July 1, the district is only approved to borrow, with interest, up to 65 percent of the current operating budget, said Nichols. The school board has warned a special meeting for Wednesday, April 10, after The Other Paper goes to press, to give guidance to the superintendent on the next budget vote, said district communication coordinator Julia Maguire.

“Once that meeting occurs, the district will have a better sense of what the budget will look like,” she said.