The Vt. Agency of Education says the Essex Westford School District can expect $815,000 less in state funding over the next two years as part of the state’s pursuit to save millions in school employee health insurance costs, offering a clear target amid contract negotiations.
School board and union reps told The Reporter last month they were at impasse and waiting to see how Gov. Phil Scott’s deal with the legislature — requiring districts reduce budgets by $13 million over the next two years — would shake out locally.
Released last week, the AOE’s projections now show EWSD must contribute $530,000 in the current fiscal year and $285,000 in FY19 toward that total.
The numbers represent the AOE’s estimates for what the district could save by requiring teachers to pay 20 percent of their health care premiums, a significant change for teachers from both former districts: CCSU teachers paid 16 percent, and ETSD teachers paid 15 percent.
School board chairwoman Martha Heath said she believes the board must try to achieve the savings through negotiations, though she stressed this is her own view, as the board hasn’t had a chance to discuss the numbers as a group.
“If we can’t, then we’ll have to look for other places in the budget to save money,” she said.
In a statement emailed to The Reporter, Essex Westford Educational Association presidents Jennifer Letourneau and Jessica Psaros said the projections were larger than they had expected.
“We are still digesting the information, but we look forward to settling fair, equitable teacher and support staff contracts,” the statement reads.
Act 85, the legislature’s budget, requires school districts statewide to reduce their budgets by $8.4 million in the current fiscal year and $4.5 million next. The state will achieve those savings regardless of whether districts hit the premium split by withholding education fund payments and forcing local districts to make up the difference.
The AOE says its projections are the difference between districts’ FY17 health care costs and an estimate of its FY18 costs based on employees as of April 1, at which time EWSD led the state in employee health care costs at $9.15 million, AOE numbers show.
Heath criticized the methodology because it fails to account for merging districts’ staff reductions, like EWSD now employing a single superintendent. The formula also punishes those that budgeted responsibly, she said, referring to stipulations in the federal Affordable Care Act that mean virtually all Vermont public school employees will be covered by new health plans by Jan. 1, 2018.
“Districts that were irresponsible and just budgeted healthcare as if nothing was going to change are going to have a fairly easy time coming up with their recapture amount,” she said.
EWSD chief operating officer Brian Donahue seconded Heath’s disapproval. He said the state’s formula uses a static number to calculate a dynamic cost that accounts for changes in people’s lives. Plus, he said, the state is seeking savings the district “may have already delivered” to taxpayers.
“But Montpelier now wants their share of the savings,” he said.
Heath said she expects district administration to share recommendations on filling the revenue hole by the board’s Sept. 5 meeting, though she anticipates the only solution is to lower expenses.
A possible fix may be found in the board’s decision to postpone transportation in Essex Jct., which will save the district about $600,000 in FY17. Donahue acknowledged that while those funds may provide a “situational answer” to filling the gap, their use would have consequences: The district has already planned to transfer that money into a fund balance to offset future tax rates.
Heath said using the one-time savings for a two-year cost would be shortsighted and result in a tax hike the following year, when the board is now hoping to implement busing.
“I’m not saying that we absolutely can’t or won’t go there,” she said, “but I think it would be irresponsible to count on or use that money for this purpose.”
Though EWSD needs to recapture the highest amount in Vermont, its total savings compared to overall education spending — .87 percent — places the district at 45th in the state. Meanwhile, each of the top 24 districts whose recapture totals represent the largest percentage of their budgets spend less than $8 million.
About $110,000 in savings will also be required from the Center for Technology, Essex. The center is operating on an FY18 budget that already reflects a $217,000 decrease, or 2.57 percent, from the previous fiscal year, forcing director Bob Travers to cut program budgets and staff.