What would it take?

The following charts were presented at a recent meeting.

Education property tax is largely defined by total spending divided by number of pupils.

For the school, we can address the problem in several ways:

1)  Decrease the budget (short term solution)

2)  Increase the number of students (long term solution)

Spending cuts required to reach given estimated property tax changes

It is arguable that we cannot continue to cut our way to lower taxes.  We have reached diminishing returns as classes are full and staffing is reaching the minimum required to comply with student need and Vermont State Education Quality Standards.  Another drop in pupils next year will see the process repeat itself. 

 

Increase in student enrollment ("equalized pupils" in Vermont tax terms) to reach given estimated property tax changes

Stopping the drop in pupils has a much greater effect on tax rates.  The school has the capacity to accept more students without change in staffing.  As a town, have we been encouraging the type of growth, housing, and services that are required to attract families with young children? 

It may be unrealistic to believe that we can make changes to attract enough students in the short term to make a difference for tax rates.  It must, however, be integrated into Westford's long term development plans.

This analysis forms the basis for our board's decision to enter into a unification study with Essex Junction and Essex Town.  The larger pool of students could absorb our student decreases, and the property tax incentives for residents are an option that could not be ignored.  It presents a potential course to ride out the final years of decreasing enrollment before we start to see student population growth again.  The board is approaching the study without a predetermined outcome--the burden is on the data to prove out the findings. 

What are our options?

Our education property tax really comes down to one main thing:  Take how much we spend, then divide it by how many students use it.

If we don't like the number that comes from that equation, we have two choices:  1)  reduce how much we spend or 2) get more students to use it.

This doesn't make logical sense when compared to a household budget.  You decrease cost by reducing what you spend.  Adding an additional person to your home doesn't make it less expensive to run the house.  In this case, total cost matters.  I don't know of many folks who have extra children to lower their "cost per person" at home.

That is how it works for schools, though.  Total budget doesn't matter as much as how many students it serves.  For Westford, we have the extra capacity to accept more students with the same amount of staffing.  That 7th grade classroom with 19 students taught by one teacher could accept up to 6 more kids.  More importantly, since the total we spent didn't change, it gets divided by a higher number of students.  The end result is we lower our spending per student.  *This will lower your education property tax rate*.

Not only will more students lower the rate, but it does so surprisingly fast.

Westford is in the opposite situation.  We have been losing students every year (mostly high schoolers graduating).  So, for the same or even lower total spending, it gets divided by a lower number of students.  We see higher spending per student, and education property taxes go up.

What about that first option of lowering spending?  We have made tough choices year after year to tighten the budget, mostly through reducing our staffing.  But we are coming to the point that further cuts are going to hinder our ability to meet the Vermont Education Quality Standards and, more importantly, the quality that is going to attract and retain families in Westford.

It takes a large reduction in spending to overcome even a small drop in students.

If that classroom with 19 students and one teacher drops to 18 students...we're still going to need one teacher.  We've reached the point where further reductions to teaching staff don't track one for one with enrollment.

To put real numbers to it, we could see zero change in homestead property tax this year if...
1)  We lower the budget by $278,000 (-5.6%)
OR
2)  We have just three more students in the school system than last year (+1%)

This is a bit of a simplification, as there are other factors involved in determining tax rates (base tax rate, revenues, CLA).  However, our spending per pupil number accounts for 44% of the tax increase this year.