Budget adjustments likey mean a tax freeze for BASD residents

Some of its additional state aid will be applied to keep tax rate steady

By Ed Nadolski

Editor in Chief

Higher than anticipated state aid will likely result in a tax rate freeze for Burlington Area School District taxpayers under a recommendation advanced by the district’s Finance Committee Monday.

Superintendent Peter Smet proposed the district use roughly half of the extra state aid – which totals about $290,000 – to reduce the district’s tax levy. The other half would be used to cover a $40,000 decrease in transportation aid and reduce the amount of the district’s fund balance tapped for next year’s budget.

The proposal reduces the tax levy increase to .60 percent (it was originally 1 percent). Smet said that increase would effectively be offset by the added value of new construction in the district – meaning residents would pay the same tax rate as last school year.

“The actual impact would be no change in the equalized (tax) rate,” Smet told the members of the committee and the School Board present at the meeting. “The increase in the tax levy would be picked up by new construction.”

He said the increase in the tax base is a projection derived from valuation estimates provided by the area’s municipal treasurers.

If those projections hold true, taxpayers will face the same equalized rate they did last school year – $10.83 per $1,000 of property value.

The administration’s proposal was recommended by the committee on a 2-1 vote, with David Thompson and William Campbell voting in favor of the plan and Larry Anderson voting against it.

Anderson, who is chairman of the committee, argued that a portion of the state aid increase be reserved for future teacher salary hikes and to cover $25,000 in losses from students opting out of the district through open enrollment.

“With that in mind, I feel we shouldn’t change the original levy,” he said.

Anderson said his calculations showed school districts throughout the state are planning to increase their levies by an average of 1.5 percent and he hinted that he didn’t want to see BASD fall behind when it came to staff compensation.

The proposed budget allows for a teacher pay increase up to 1 percent, but Anderson pointed out, state guidelines allow the district to increase compensation up to slightly more than 2 percent without having to go to voters for approval in the form of a referendum.

However, School Board member Roger Koldeway, who was sitting in on the committee meeting, said he questions the wisdom of announcing any budgeted amount for teacher salaries before negotiations are complete.

“I disagree with putting any money in the budget ahead of time,” he said. “You don’t put a number out there before negotiations.”

According to Smet, the district is still negotiating with members of the Burlington Education Association – the local teachers union – for base salary for the 2012-13 school year. Once that is settled, officials can move on to negotiations for base compensation for the 2013-14 school year.

Koldeway, instead, urged the district to use the full amount of additional state aid to reduce the tax levy further and perhaps even reduce the tax rate compared to last year.

“We certainly could apply all of that (state aid) and decrease the levy even more,” he said. “That was the intention of that money.”

Committee member and School Board President David Thompson said he supports the administration’s proposal because it effectively freezes the tax rate and trims the amount of the district’s fund balance applied to the budget.

Smet said the district’s fund balance currently represents about 8 percent of its budget and most advisors recommend a fund balance of 10 to 20 percent.

“I’m not a strong supporter of raising the tax levy this year,” Thompson said. “I think we would be wise to accept the district recommendation to only increase the tax (levy) by the amount of new construction.”

Thompson added that he sees “some light on the horizon” when it comes to the economy and the district will be better able to address teacher pay in accordance with the economy and private sector performance in coming years.

The full School Board will vote on the committee’s recommendation in a meeting that begins at 6 p.m. on Monday at the school district office.

Once the budget is finalized it will be prepared for publication prior to the district’s annual meeting in late August. That meeting gives district residents a chance to vote on the proposed tax levy needed to support the budget.