School board discusses tax impact for proposed $29M budget

The Springfield School Board on Monday, Feb. 20 discussed the potential tax impact of the proposed $29,335,336 Fiscal Year 2018 school district budget.

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2017-02-22 / Front Page School board discusses tax impact for proposed $29M budget By TORY JONES toryb@eagletimes.com SPRINGFIELD — The Springfield School Board on Monday, Feb. 20 discussed the potential tax impact of the proposed $29,335,336 Fiscal Year 2018 school district budget. For the last few years, the school district has used four fictional taxpayers as examples to describe the differing tax rates, Finance Director Steve Hier said at the meeting. Hier used those characters, dubbed Larry the Landlord, Nancy the Nurse, Betsey the Bookkeeper and Ralph the Retiree, in a presentation on Monday about the potential tax impact. There are two tax rates, a residential and a non-residential rate, Hier said. For FY18 school taxes, the proposed residential tax rate would be $1.4933 per $100 of assessed value, based on the proposed budget, as opposed to the current residential tax rate is $1.5144, with a decrease of .0211, according to Hier. The non-residential tax rate, currently at $1.3895, would be $1.4091, with an increase of .0196. The income percentage, currently at 2.99 percent, would be a proposed 2.79 percent, with a decrease of .2 percent, all according to Hier. That tax rate is established by the state, and does not change based on spending, he said. It is possible that some people in Springfield would not pay their taxes based on the value of their property, but would be capped and based on income, he said. That rate would go from 2.99 to 2.79 percent next year, he said. In regard to the residential tax rate trend, “it is an arc, and we are on the decline of the arc,” with a decline of the tax rate over the past several years, Hier said. In FY12 the tax rate started to increase, and in FY15-FY16 the tax rate stayed the same. In FY17 the tax rate dropped, as it would again for FY18, he said. “These last three years have been a shift in the trend,” he said. The tax impacts in Springfield are divided between residential and non-residential property. The rates are not the same for all residents, he said. Thirty-seven percent are non-residential, and 63 percent are residential, paying a different tax rate, Hier said. The 63 percent is divided up into three sections as well — 817 households are property-based, 692 households are income-based, and 866 households with income of less than $47,000 have a “Super Circuit Breaker,” a capped, floating rate for town and school taxes combined, based on income. Hier offered examples using the four fictional characters in each tax rate example. The fictional Larry the Landlord, which makes up approximately 37 percent of the grand list, would for Hier’s example own three apartment buildings that the town values at $500,000, live out of town, have no homestead in Springfield and have a $100,000 annual income. Under the current proposed budget, Larry, a non-residential taxpayer, would have a 1.96 cent increase, which would be an additional $98 of school property tax. The Nancy the Nurse character, which represents 817 households, may have a household income $115,000 and a home value $280,000. Under the current proposed budget, Nancy, a resident, would pay the residential tax rate and have a 2.11 cent decrease, equalling a $59 total decrease. Betsey the Bookkeeper, representing 682 households, may have a household income $50,000 and a home value $150,000. Under the current proposed budget, this individual would see a 2.79 percent income cap, or $100 total decrease, or savings on school tax. The Ralph the Retiree character represents 866 households. If he had a household income $20,000 from social security and a home value of $100,000, he would under the current proposed budget fall into the Super Circuit Breaker category. He would have a .3 percent “cost of living” increase, equaling $27 total increase in combined taxes, but that would be substantially less than he would have paid based on the value of his property, all according to Hier. The budget review process began in early January, with a final date of Jan. 25 to adopt the proposed budget. An informational town meeting will take place at 6:30 p.m. on March 6 at the Springfield High School Library. The Annual Town and Town School District Meeting is scheduled for March 7, with polls open from 8 a.m. to 7 p.m. Hier also presented the FY16 Audit Report at the school board meeting. The 2016 audit is “a clean audit,” Hier said. Part of the audit is to verify that the Springfield School District has complied with the rules and regulations of these grants, which it has, he said. The information in the audit report will be published in the upcoming annual town report, he said. The next Springfield School Board meeting is scheduled for 6:30 p.m. Monday, March 20. The proposed FY2018 Springfield School District budget can be viewed at www.ssdvt.org.