This year's Town Meeting Day saw a potentially unprecedented number of school budgets fail across Vermont, in districts small and large alike.
As of this report, 15 schools have held second votes on amended budgets, nearly all of which have failed. And now some have scheduled third votes.
But what happens if budgets don't pass before summer vacation? And what do these failures mean for public education in Vermont, in both the short and long term?
Host Jenn Jarecki sat down with Vermont Public's education and youth reporter, Lola Duffort. This interview was produced for the ear. We highly recommend listening to the audio. We’ve also provided a transcript, which has been edited for length and clarity.
Jenn Jarecki: Let's start big picture. Broadly speaking, when it comes to school budgets, what happened on Town Meeting Day? And where are we now?
Lola Duffort: Well, on Town Meeting Day, we saw roughly one in three budgets fail at the ballot box. Now, not every school district votes on Town Meeting Day, and some school districts that have since voted have been able to pass budgets. But by and large, the school districts that have had to go for a second revote to try and pass a budget have failed to do so. And so we are in a pretty bad place for school budgets in Vermont right now.
Jenn Jarecki: So of those schools that have had subsequent votes which failed — I mean, what do they do now?
Lola Duffort: Well, in Vermont, you don't really get a school budget until your local electorate agrees to one. And so what school districts have to do is revise their school budget, put a new plan before voters and hope that they say yes. So basically, they have to keep going with this process until they get to yes.
There is a growing concern this year, though, given this environment, this anxiety about taxes, that a not insignificant number of school districts might not get a voter-approved budget before they have to reopen their doors next fall.
Jenn Jarecki: What happens if a district still doesn't have an approved budget by the end of this school year?
Lola Duffort: According to current law, what happens in that case is that a district is allowed to borrow up to 87% of its prior year's budget. So you don't get, you know, a complete government shutdown. There's a way for the school district to kind of continue basic operations. Of course, in this inflationary environment, 87% of your prior budget would be pretty catastrophic. And we're also talking about borrowing that money. So you have the added problem of having to pay interest.
School officials are asking lawmakers to create a new backstop, because they're worried that in some cases, they might not ever get to yes. It's likely that lawmakers are going to take them up on that request and kind of come up with a new default. But we don't yet know what that alternative might look like.
Jenn Jarecki: We also mentioned earlier that the amount of failures this year are potentially unprecedented. Lola, can you provide some more context on what voters across the state are thinking? I mean, is it too simple to say this is just a matter of folks not wanting double-digit tax increases?
Lola Duffort: I think it's definitely a little bit more complicated than that. And it's also basically that, right? Vermonters are operating in an incredibly inflationary environment. Health care costs are up, housing costs are up. So in general, people are feeling incredibly squeezed. And a school budget is an expense that you might feel like you have some measure of control over. So I think you're more likely to say no to increases in a school budget in that environment.
Of course, that inflationary environment is also what is creating, in large part, this growth in education spending. So school districts are really struggling to respond to that because they don't feel like they have much that is within their control.
Another kind of interesting wrinkle is that some of the school districts where we are seeing repeated budget failures are not necessarily the higher spenders. And, you know, what you have is a lot of, I'll call them usual suspects — districts that have historically had trouble passing budgets — this year having even more trouble. And that's concerning to lawmakers and also to school officials, who worry that voters who are trying to kind of instill some fiscal discipline might be taking it out on actually some of the most frugal districts.
Jenn Jarecki: Despite the differences between districts in size and geography, are you starting to see some patterns emerge with these failures?
Lola Duffort: Yeah, it definitely both seems random and not. Like I said, there are a lot of the school districts that you would expect to have trouble passing budgets, who are having a lot of trouble passing budgets this year. And you're also seeing a lot of places that almost always pass their budgets. I'm thinking of Montpelier, for example — I can't remember the last time Montpelier said no to a school budget. And also something that I think is maybe potentially counterintuitive is we're seeing a lot of merged districts, a lot of larger districts, say no to their school budgets, while a lot of smaller districts are saying yes.
Jenn Jarecki: Vermont has stood up some new tax revenue streams in recent years. What about the education revenue generated from taxing online sports betting and retail cannabis? I mean, does that factor into this conversation at all?
Lola Duffort: Thank you so much for asking that. Everyone seems to think that pot and gambling revenues can fix this. They can't. Those pots of money are spoken for. They're also just not that big, even if they're exceeding expectations.
Lawmakers are advancing a proposal that would tax cloud software, which is currently exempt from the sales tax — think about like TurboTax, that's an example. And they're also thinking about adding a modest surcharge, 1.5%, to short term rentals. Both of those things would vary slightly buy down property taxes. But they're not going to make a huge difference. Those two things together are going to raise a little over $26 million.
Statewide, we're looking at now a roughly $200 million increase in education spending, which is driving these tax increases. So it doesn't take a math whiz to see that there's a pretty large gulf between those two things.
And in general, you know, lawmakers have really emphasized that there's not much they feel they can do to bring down property taxes. There are no easy pots of money that are not spoken for at this point in the game. And also, you know, even while some lawmakers are trying to raise new revenues, they would rather create new initiatives and provide new services for that. They're a little bit worried about buying down property taxes, and trying to avoid the kind of cost containment conversation that they increasingly feel Vermont needs to have.
Jenn Jarecki: Lola, you've reported for Vermont Public on Vermont's teacher shortage, which has only gotten worse since the pandemic. And compensation is partly to blame for that. Is there a chance these budget failures will exacerbate that problem? And also, I hate to ask, but are we going to see layoffs?
Lola Duffort: I'm not sure how much this will depress wages, because a lot of those are just kind of baked into contracts at this point. And because of the market, you sort of can't pay people less. However, yes, we will absolutely see layoffs. There's kind of no way around that.
The executive director of the Vermont NEA — that's the teachers union — has already testified that, you know, hundreds of educators have already received reduction in force notices. Now, that's not a layoff yet — you get a RIF notice when there's a potential for layoffs. But it's the first step in that process.
And, you know, at least one school district, the Montpelier Roxbury School District, is also reacting by just shutting down an elementary school in Roxbury, which is obviously extremely controversial in Roxbury. The town hasfiled suit against the school district to try and block this. So, you know, I think we can expect a lot of disruptive and difficult change to come out of this budget cycle and season.
Jenn Jarecki: Before we go, Lola, what are you watching closely in the coming days and weeks?
Lola Duffort: Well, school budget votes will keep happening until school districts can get to yes, so I will be following that closely. And I will also be following the conversation in Montpelier, particularly as it regards whether or not lawmakers come up with a new backstop for school districts that can't get to yes.
But in general, what I'm really curious about is the conversation that's going to unfold in the months and years to come. I think everyone can agree that this year is an inflection point, and people are starting to ask really big, really difficult questions about what Vermont's education system should look like, how we should pay for it, who should decide, right?, how we operate our schools? And I think that will be the conversation to follow.
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