Introduced by Representatives Allaire of Rutland City, Branagan of Georgia, DePoy of Rutland City and Flory of Pittsford
Subject: Taxation; education; education finance; education property tax rates; common level of appraisal cap on volatility; income sensitivity limits; current use; education property tax exemption for enrolled farm and forest land; publication of school budget data; school best practices manual; collective bargaining strategic planning and dispute resolution; supermajority vote required for excessive education spending growth
Statement of purpose: This bill proposes to make amendments to education property tax and education laws which would keep school spending and property tax burdens at sustainable levels.
AN ACT RELATING TO SUSTAINABLE SCHOOL SPENDING AND PROPERTY TAX BURDENS
It is hereby enacted by the General Assembly of the State of Vermont:
* * * Taxation of Land Enrolled in Current Use by Farmers * * *
Sec. 1. 32 V.S.A. § 5401(6) is amended to read:
(6) “Equalized education property tax
grand list” means one percent of the aggregate fair market value of all
nonresidential and homestead property that is required to be listed at fair
market value as certified during that year by the director of property
valuation and review under section 5406 of this title, plus one percent of the
aggregate value of property required to be listed at a value established under
a stabilization agreement described under section 5404a of this title, plus one
percent of the aggregate use value established under chapter 124 of this title
nonresidential property that is enrolled in the use value
appraisal program, but excluding agricultural land and managed forest land which
in at least two of the preceding five years was owned by a person who qualified
as a farmer, as defined in subdivision 3752(7) of this title, and enrolled in
the use value appraisal program.
Sec. 2. 32 V.S.A. § 5404(a) is amended to read:
(a) Municipalities shall determine the education property tax grand list by calculating one percent of the listed value of nonresidential and homestead real property as provided in this section. The listed value of all nonresidential and homestead real property in a municipality shall be its fair market value, its value established under a stabilization agreement described in section 5404a of this title, or the use value of property enrolled in a use value program under chapter 124 of this title, but excluding agricultural land and managed forest land which in at least two of the preceding five years was owned by a person who qualified as a farmer, as defined in subdivision 3752(7) of this title, and enrolled in the use value appraisal program. If a homestead is located on a parcel of greater than two acres, the entire parcel shall be appraised at fair market value; the housesite shall then be appraised as if it were situated on a separate parcel and the value of the housesite shall be subtracted from the value of the total parcel to determine the value of the remainder of the parcel.
* * * Education Tax Rates * * *
Sec. 3. FISCAL YEAR 2007 REDUCTION OF EDUCATION PROPERTY
For fiscal year 2007 only, the education property tax imposed under subsection 5402(a) of Title 32 shall be reduced from the rates of $1.59 and $1.10 and shall instead be at the following rates:
(1) the tax rate for nonresidential property shall be $1.47 per $100.00; and
(2) the tax rate for homestead property shall be $0.98 multiplied by the district spending adjustment for the municipality, per $100.00, of equalized education property value as most recently determined under section 5405 of Title 32.
Sec. 4. 32 V.S.A. § 5402(b)(1) is amended to read:
(b) Calculation of education tax.
(1) The commissioner of taxes shall determine for each municipality the education tax rates under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal. For purposes of this calculation, the “most recent common level of appraisal” of a town that has not been certified under subsection 5406(c) of this title as having completed a reappraisal for current grand list, shall not be lower than its prior-year unadjusted common level of appraisal reduced by the decrease in common level of appraisal points experienced by the town at the 90th percentile when the common levels of appraisal of all municipalities are arrayed by percentage of decrease from their respective prior-year levels of appraisal. The legislative body in each municipality shall then bill each property taxpayer at the homestead or nonresidential rate determined by the commissioner under this subdivision, multiplied by the education property tax grand list value of the property, properly classified as homestead or nonresidential property and without regard to any other tax classification of the property. Each homestead property tax bill shall include notice of the education spending per equalized pupil in the taxpayer’s district and its relation to the base education payment; and the effect of the education spending in the district upon the homestead tax rate and the applicable percentage for income sensitivity; and shall also include an insert supplied by the commissioner of taxes which explains the relationship of district education spending and the common level of appraisal to property tax rates. Tax bills shall show the tax due and the calculation of the rate determined under subsection (a) of this section, divided by the municipality’s most recent common level of appraisal, multiplied by the current grand list value of the property to be taxed.
* * * Income Sensitivity * * *
Sec. 5. 32 V.S.A. § 5402b is amended to read:
§ 5402b. Statewide education tax rate adjustments
(a) Annually, by December 1, the commissioner of taxes shall
recommend to the general assembly, after consultation with the department of
education, the secretary of administration and the joint fiscal office, the
following adjustments in the statewide education tax rates under subdivisions
5402(a)(1) and (2) of this title:
* * *
(b) If the commissioner makes a
recommendation to the general assembly to adjust the education tax rates under
section 5402 of this title, the commissioner shall also recommend a
proportional adjustment to the applicable percentage base for homestead income
based adjustments under section 6066 of this title.
Sec. 6. 32 V.S.A. § 6066(a)(1)(E) is added to read:
(E) Any claim to be paid under subdivision (A) or (B) of this subdivision (1) shall first be reduced for the school district’s spending in excess of the statewide average spending per pupil, by multiplying the amount by a fraction not to exceed 1, the numerator of which is the prior-year statewide average education spending per equalized pupil and the denominator of which is the prior-year school district education spending in which the homestead is located, minus capital costs for the prior fiscal year, per equalized pupil.
Sec. 7. REPEAL
Secs. 25 (raising household income ceiling and housesite maximum to $85,000.00 and $200,000.00 respectively), 26 (raising household income ceiling to $90,000.00) and 27 (effective dates relating to Secs. 25 and 26) of No. 38 of the Acts of 2005 are repealed.
Sec. 8. 32 V.S.A. § 6067 is amended to read:
§ 6067. Credit limitations
Only one individual per household per taxable year shall be entitled to a benefit under this chapter. Payments received under subdivision (a)(1)(A) or (B) of this title with respect to any annual tax levy shall not exceed $4,000.00, and payments received under this chapter shall not exceed a total of $6,000.00, unless the claimant demonstrates to the satisfaction of the commissioner that the assets of the household members, excluding the housesite, do not exceed $300,000.00.
* * * Education Proposals * * *
Sec. 9. PURPOSE
It is the purpose of this act to enhance the knowledge and authority of voters in Vermont communities with respect to the collective bargaining processes that affect school budgets and operations. This act is designed to provide critical information to Vermont communities regarding the context in which collective bargaining between teachers and school boards takes place and to enable the parties to collective bargaining negotiations voluntarily to submit matters in dispute to the voters of the school district for resolution thereof.
Sec. 10. 16 V.S.A. § 1984 is added to read:
§ 1984. Publication of comparative data
On or before September 1 of each year, the commissioner shall publish comparative data, to the extent it is reasonably available, which shall be furnished on request and shall be displayed on the department of education website. Before publishing the data, the commissioner shall consult with the commissioners of finance and management and of taxes. The data shall, except as otherwise specified, include the national average, a state‑by‑state listing, the Vermont average, and a Vermont school-district-by-school-district listing:
(1) Pupil-to-teacher ratio;
(2) Education spending per pupil;
(3) Education spending per capita;
(4) Education spending per income level at the Vermont and national levels; and
(5) At the Vermont state and school-district levels, the comparison of outcomes on the student assessments described in subdivision 164(9) of this title to both pupil-to-teacher ratios and per-pupil education spending.
Sec. 11. 16 V.S.A. § 1985 is added to read:
§ 1985. Publication of best practices
On or before July 1, 2007, the commissioner, after consultation with school boards, teacher and administrator representatives, labor relations counsel, the Vermont labor board, and other appropriate resources shall publish a manual for use by school boards on best practices and related contract language for collective bargaining negotiations. The manual shall be updated every four years thereafter. The manual shall address at least the following areas:
(1) Performance-based evaluation systems;
(2) Performance-based reduction in force;
(3) Health care benefits and management;
(4) Teacher-pupil ratios and class size;
(5) Time in class in relation to other duties; and
(6) Grievance and arbitration procedures.
Sec. 12. 16 V.S.A. § 1986 is added to read:
§ 1986. Strategic information and desired outcome plan
In any year in which the previous collective bargaining agreement expires, or in the year in which collective bargaining will commence for the first time, a school board shall adopt a strategic information and desired outcome plan no later than 120 days prior to the next annual school district meeting. A school board may contract with its member supervisory union pursuant to section 267 of this title for the development and presentation of the plan, which the school board may then ratify. Prior to adoption or ratification, the school board shall offer the opportunity for public comment on the plan. The plan shall include:
(1) Income growth of district residents by low, middle, and upper income cohorts;
(2) Current pupil-to-teacher ratio and desired ratio over the projected term of the upcoming contract;
(3) Current spending per pupil and desired spending per pupil over the projected term of the upcoming contract; and
(4) Identification of existing contract provisions where improvement is desired in order to conform the contract to best practices.
Sec. 13. 16 V.S.A. chapter 57, subchapter 5 is added to read:
Subchapter 5. Submission of Outstanding
Collective Bargaining Disputes to Voters
§ 2031. Agreement to submit disputes to voters
(a) When a school board and a teacher organization holding exclusive negotiating rights have reached impasse in collective bargaining negotiations after mediation and fact-finding under sections 2006 and 2007 of this title, they may jointly agree in writing to submit the dispute to resolution by the voters of the school district. The written agreement shall specify whether the dispute being submitted to the voters is to resolve the package of issues under negotiation or any one or more particular issues under negotiation. Once agreed to and executed, the agreement may not be revoked.
(b) Upon execution of the agreement, the school board shall call and warn a meeting for not less than 30 nor more than 40 days before the meeting at which the vote on resolution of the dispute will be taken.
(c) The vote shall be by Australian ballot. The form of the ballot shall be as follows:
“Shall the voters of the School District vote to approve the last best offer of the school board or the recognized teacher organization with respect to [Include one of the following on the ballot: the collective bargaining agreement as a whole; or the particular issue or issues ]?
Vote for not more than one of the following:
1) The last best offer of the school board [checkbox]
2) The last best offer of the recognized teacher organization [checkbox ]”
(d) At the public informational hearing required by subsection 2680(g) of Title 17, the recognized teacher organization shall be given an opportunity along with the school board to present its position on any matter pending before the voters.
(e) Notwithstanding any other provision of law, the result of the vote shall be binding on the parties. A strike, which shall have the same meaning as provided in subdivision 1722(16) of Title 21, shall be prohibited if it occurs after both parties have voluntarily submitted a dispute to the voters under this section. A school board may petition for an injunction or other appropriate relief from the superior court in the county wherein such strike in violation of this section is occurring or is about to occur. A recognized teacher organization may also petition for an injunction or other appropriate relief from the superior court in the county wherein the school district is situated if the school board fails to adhere to the decision of the voters taken under this section.
Sec. 14. 16 V.S.A. § 562a is added to read:
§ 562a. School budget; supermajority
Any authorization by the electorate pursuant to subdivision 562(8) of this title or a municipal charter of an amount of money in excess of 104.5 percent of the prior-year authorization shall require approval by at least 60 percent of those voting.
Sec. 15. 16 V.S.A. § 562a is amended to read:
§ 562e. SCHOOL BUDGET; SUPERMAJORITY
Any authorization by the electorate
pursuant to subdivision 562(8) of this title or a municipal charter of an
amount of money in excess of
104.5 percent of the prior-year
authorization increased by the most recent New England Economic Project Cumulative
Price Index, as of November 15, for state and local government purchases of
goods and services from fiscal year 2008 through the upcoming fiscal year shall
require approval by at least 60 percent of those voting.
Sec. 16. EFFECTIVE DATES
This act shall take effect upon passage, except:
(1) Secs. 1 and 2 of this act (enrolled agricultural and forest land owned by a farmer, excluded for education tax purposes) shall be effective for grand lists of April 1, 2007 and after.
(2) Sec. 4 of this act (limit on volatility of common level of appraisal) shall be effective beginning with the equalization study of the 2005 grand lists that are certified in January 2006.
(3) Sec. 6 of this act (reduction of prebate amount for excess school spending) shall be effective for claims filed for 2006 property taxes and after.
(4) Sec. 8 of this act (cap on income sensitivity payments) shall be effective for claims filed for 2006 property taxes and after.
(5) Sec. 10 of this act (publication of school data) shall take effect on July 1, 2006.
(6) Sec. 13 of this act (submission of teacher contract disputes to voters) shall take effect on July 1, 2008.
(7) Sec. 14 (school budget supermajority provisions) shall apply to school budgets for fiscal year 2008.
(8) Sec. 15 (school budget supermajority provisions) shall apply to school budgets for fiscal years 2009 and after.
The Vermont General Assembly
115 State Street