The simplest, and not very satisfactory, answer to this question is because of the Town and School budgets passed at Town Meeting in March 2013 coupled with the increase in the base Education rate set by the Legislature. Your taxes are based on the total taxable value of your property multiplied by the Municipal Tax Rate (which results in the Housesite Municipal Tax) and the Education Tax Rate (which results in the Housesite Education Tax).
What is the Municipal Tax Rate?
The Municipal Tax Rate rate is set by the Selectboard based on the various Articles passed at Town Meeting. This year’s Municipal Tax Rate is 0.5238, or as it is sometimes referred to 52.38 cents. As an aside, tax rates are normally calculated based on $100 of assessed value – this makes the decimal place easier to work with. So at a rate of 52.38 cents you are charged 52.38 cents for every $100 of the assessed value of your property. This rate of 52.28 cents is a large increase over the 2012 rate of 36.96 cents – and increase of almost 16 cents. How did this happen?
There are a number of factors behind the increase but a large part is due to the Selectboard (of which I was a member) incorrectly setting the tax rate last year. The Selectboard miscalculated the tax revenues required by approximately $132,000. This resulted in a tax rate of 0.3696 instead of approximately 0.4439. The Selectboard was able to make up for this shortfall by accessing a surplus in the Highway Department and using the Town Stabilization Fund. Other factors were increases in legal fees (including monies for representing Monkton in Addison Natural Gas Project hearings), Highway spending and Salary and General Expenses.
While this rate is quite high and the Selectboard will work on decreasing it, historically speaking the Municipal Tax Rate has only increased by 3% over the rate declared in 2008 and 2009. Here is the historical data:
- 2008 – 0.5088
- 2009 – 0.5088
- 2010 – 0.4186
- 2011 – 0.4418
- 2012 – 0.3696 (should have been 0.4439)
- 2013 – 0.5238
When does the Selectboard set the budget for next year and when is it voted on? The Selectboard sets the budget during December and early January by asking for and reviewing budgets submitted by each Committee or other entity. These meetings are open and the public is encouraged to attend. The budget is completed in time for the publication of the Town Report which is then sent to every household in Monkton for review. The budget is voted on at Town Meeting (first Tuesday in March) in a series of Articles.
What about the Education Tax Rate?
The Education Tax Rate is slightly more complicated to calculate but Monkton’s Educational Tax Rate for residents went from 1.7220 (or 172.20 cents) in 2012 to 1.8420 (or 184.20 cents) in 2013. This is an increase of 0.12 (or 12 cents). Educational tax rates are controlled by 3 factors – the school budgets (spending), the number of students and the Base Education amount and rate which is set by the state. There is actually a tax rate for each of the schools attended by Monkton students, the Monkton Central School and Mount Abraham but the method by which the rates are calculated are the same regardless of the school.
Simply stated the school tax rate is proportional to the Base Education amount and rate, the school spending and the number of students. If the Base Education rate goes up, the school tax rate goes up. If the school spending goes up, the school tax rate goes up. Finally, if the number of students goes down in a school, the school tax rate goes up. Unfortunately for Monkton all three were true for both schools.
In 2012 the number of equalized pupils in the Monkton Central School was 157.46. In 2013, it was forecast to be 153.45. What is an equalized pupil and how can you have fractional students? An equalized pupil is an attempt to recognize that not all students are the same – some require more resources. Thus a student who needs ESL training would be assigned a higher equalized pupil number then one who does not.
In addition the spending for both schools went up. For the Monkton Central School the budget went from $2,163,203 in 2012 to $2,318,823 in 2013. If you divide the school budget by the equalized pupils for that school you get the education spending per equalized pupil. This is a figure that lets the state and community know how much is being spent on a per ‘pupil’ basis. In the case of Monkton School the enrollment when down, the spending went up and the spending per equalized pupil when from $13,738 in 2012 to $15,109 in 2013, an increase of just under 10%.
The Legislature creates a Base Education amount – the smallest amount they feel would be needed to educate a student, and a Base Education rate. In 2012 (FY 2012/2013) the Base Education amount was $8723 and the Base Education rate was 0.890. A school’s educational tax rate is determined by comparing the amount it spends per equalized pupil to the Base Education amount and then multiplying the the Base Education rate by that ratio. We already know that spending per equalized pupil went up but unfortunately the Base Education rate went up as well.
In 2012 the Base Education amount was $8723 and the rate was $0.89. To figure the Estimated Homestead Tax Rate for Monkton Central School we take the equalized per pupil spending ($13,738.13) and divide by the Base Education amount ($8723) which results in a ratio of 1.57. Multiply this ratio by the Base Education rate ($0.89) to get an Estimated Homestead Tax Rate for Monkton School of 1.4017.
In 2013 the Base Education amount was increased to $9151 (good news) but the Base Education rate was also increased to $0.94 (ouch). To see the results of this we take the Monkton equalized per pupil spending ($15,109) and divide it by the Base Education amount ($9151) to get a ratio of 1.65. We multiply this ratio by the Base Education rate (0.94) and get a Estimated Homestead Tax Rate for Monkton Central School of 1.551. Compare this to the rate of 1.4017 for 2012. There are several more calculations to reach the final rate that appears on your tax bill but this shows where the tax increases come from.
When does the School Board set the budget for next year and when is it voted on? The School Board sets the budget during December and early January. These meetings are open and the public is encouraged to attend. The budget is completed in time for the publication of the Town Report which is then sent to every household in Monkton for review. The budget is discussed in detail at the Annual Meeting of the Monkton Town School District which usually takes place on the Monday evening prior to Town Meeting. The school budget is voted on by Australian ballot on Town Meeting Day.
Stephen Pilcher on behalf of the Monkton Selectboard.