Introduced by Representatives Hube of Londonderry and Quaid of Williston

BILL AS INTRODUCEDH.480

2001Page 1

H.480

Referred to Committee on

Date:

Subject:Education; taxation; state aid; equality in education finance

Statement of purpose: This bill proposes to eliminate the statewide education property tax, the equalized yield system of local property taxation, and the Act60 block grant; to establish a local property tax for funding of education and a new formula for distribution of state aid which is based on the income level of the school district residents and the level of spending voted by the electorate; to restore the property tax rebate program, but with an increase in the benefit to taxes in excess of 3.0 to 6.0 percent of household income, a household income limit of $75,000.00, a benefit cap of $2,000.00, and no distinction in benefits for those over or under age 62; to create full reimbursement to towns for current use losses on municipal and education property taxes; to eliminate all categorical state aid other than extraordinary special education aid; and to revise the formula for extraordinary special education aid so that the state pays 100 percent of expenditures which exceed $20,000.00.

AN ACT RELATING TO EQUALITY IN EDUCATION

It is hereby enacted by the General Assembly of the State of Vermont:

Sec. 1. 16 V.S.A. § 428 is amended to read:

§ 428. AMOUNT OF MONEY TO BE VOTED AND COLLECTED

(a) At each annual town school district meeting, the electorate shall vote such sums of money as it deems necessary for the support of schoolsa budget which shows expected income and expenditures for the coming year. If such sums are not approved or acted upon at the annual meeting, the electorate shall vote such questions at a duly warned special school district meeting. A district may vote money necessary for the support of schools therein to the end of the full school year next ensuing.

(b) Following adoption of a budget by the electorate and calculation of the yield amount pursuant to section 4027 of this title, if the district has voted a budget with local education spending in excess of the general state support grant amount, the commissioner of education shall determine the district's local share property tax percentage. The selectboard shall then bill each property taxpayer for the local share property tax amount, and may use tax classifications if authorized. Homesteads shall be billed without regard to the income sensitivity calculation under chapter 154 of Title 32after the grand list book has been completed and lodged in the office of the town clerk, the selectboard shall set a tax necessary to raise the specific amounts voted.

(c) Local share property tax amount is the education property tax liability due under section 5402 of Title 32, times the local share property tax percentage, minus any amount of education property tax assessed for that year on an electric generating plant subject to tax under chapter 213 of Title 32. Local share property tax percentage means the percentage of the liability under chapter 135 of Title 32 necessary to raise per equalized pupil local education spending in excess of general state support amount, divided by the yield amount. Local education spending shall have the same meaning that it has in subdivision 4001(6) of this title.

(d) The treasurer of each school district which has voted a budget with local education spending in excess of the general state support grant and which can raise more than the equalized yield amount shall, on December 1 in the year in which the tax is levied and on June 1 of the following year, pay to the state treasurer for deposit into the education fund one-half of the municipality’s education property tax liability net payment, as determined by the commissioner of education. Payment shall be accompanied by a return prescribed by the state treasurer in consultation with the commissioner of education. Any portion of local share property tax liability due to the treasurer and paid before the due date shall be discounted on a per diem basis at an annual rate of six percent. A district which has not voted a budget and for which the commissioner has used the most recently adopted budget in calculating the yield amount under section 4027 of this title, shall be subject to this subsection, based on its most recently adopted budget and shall borrow the funds necessary to make payments to the state treasurer.

(e) The payment provisions of section 5403 of Title 32, and the administrative provisions of section 5409 of Title 32 shall apply to the local share property tax. Taxes assessed and collected by a municipality shall be assessed and collected in accordance with chapter 133 of Title 32.

(f)(d) If the electorate of a school district votes for its budget by Australian ballot, it shall do so using ballot language jointly developed by the commissioner and secretary of state and adopted by the commissioner by ruleadopted by the secretary of state under chapter 25 of Title 3.

Sec. 2. 16 V.S.A. § 511 is amended to read:

§ 511. BUDGET

(a) At a meeting legally warned for that purpose, an incorporated school district shall vote such sums of money as it deems necessary for the support of schoolsa budget which shows income and expenditure for the coming year. If such sums are not approved or acted upon at the annual meeting, the electorate shall vote such questions at a duly warned special school district meeting. A district may vote money necessary for the support of schools therein to the end of the full school year next ensuing.

(b) Following adoption of a budget by the electorate and calculation of the yield amount pursuant to section 4027 of this title, if the incorporated district has voted a budget with local education spending in excess of the general state support grant amount, the commissioner of education shall determine thedistrict's local share property tax percentage. The, the prudential committee shall then bill each property taxpayer for the local share property tax amount, and may use tax classifications if authorized. Homesteads shall be billed without regard to the income sensitivity calculation under chapter 154 of Title32. The prudential committee shall have the same authority to enforcecollection and payment of this tax, including the collection of interest on overdue taxes, as selectmen have in enforcing collection and payment of town taxesset a tax rate necessary to raise the amount voted, and the tax shall be levied on the taxable estate within the territorial limits of the district for the lawful purposes of the corporation. The prudential committee shall make out and deliver to the district collector a tax bill with a warrant for its collection. The district collector shall have the same powers to collect the tax as a collector of town taxes. The prudential committee shall have the same authority to enforce collection and payment of this tax, including the collection of interest on overdue taxes, as selectmen have in enforcing collection and payment of town taxes.

(c) Local share property tax amount is the education property tax liability due under section 5402 of Title 32, times the local share property tax percentage, minus any amount of education property tax assessed for that year on an electric generating plant subject to tax under chapter 213 of Title 32. Local share property tax percentage means the percentage of the liability under chapter 135 of Title 32 necessary to raise per equalized pupil local education spending in excess of general state support amount, divided by the equalized yield amount. Local education spending shall have the same meaning that it has in subdivision 4001(6) of this title.

(d) The treasurer of an incorporated district which has voted a budget with local education spending in excess of the general state support grant and which can raise more than the equalized yield amount shall, on December 1 in the year in which the tax is levied and on June 1 of the following year, pay to the state treasurer for deposit into the education fund one-half of the municipality’s education property tax liability net payment, as determined by the commissioner of education. Payment shall be accompanied by a return prescribed by the state treasurer in consultation with the commissioner of education. Any portion of local share property tax liability due to the treasurer and paid before the due date shall be discounted on a per diem basis at an annual rate of six percent. An incorporated district which has not voted a budget and for which the commissioner has used the most recently adoptedbudget in calculating the yield amount under section 4027 of this title, shall be subject to this subsection, based on its most recently adopted budget and shall borrow the funds necessary to make payments to the state treasurer.

(f)(d) If the electorate of an incorporated school district votes for its budget by Australian ballot, it shall do so using ballot language jointly developed by the commissioner and secretary of state and adopted by the commissioner by ruleadopted by the secretary of state under chapter 25 of Title 3.

Sec. 3. 16 V.S.A. § 2962 is amended to read:

§ 2962. EXTRAORDINARY SERVICES REIMBURSEMENT

(a) Except as otherwise provided in this subchapter, extraordinary services reimbursement shall be payable to each town school district, unified union school district and incorporated district.

(b) The amount of extraordinary services reimbursement provided to each district shall be equal to 90100 percent of its extraordinary special education expenditures.

(c) As used in this subchapter, “extraordinary special education expenditures” means a school district’s allowable expenditures which for any one child exceed $50,000.00$20,000.00 for a fiscal year. In this subsection, child means a pupil with disabilities who is three years of age or older in the current school year. The state board shall define allowable expenditures which shall include any expenditures required under federal law, and any costs of mediation conducted by a mediator who is approved by the commissioner.

Sec. 4. 16 V.S.A. chapter 135 is added to read:

CHAPTER 135. EDUCATION REVENUE SHARING

§ 5000. POLICY STATEMENT

The intent of this chapter is to make educational opportunity available to each pupil in each town on substantially equal terms, in accordance with the Vermont Constitution and the Vermont supreme court decision of February 5, 1997, Brigham v. State of Vermont.

§ 5001. DEFINITIONS

For the purpose of this chapter:

(1) “Average daily membership”, or “ADM”, of a school district in any year means:

(A) the full-time equivalent enrollment of pupils, as defined by the state board, by rule, who are legal residents of the district attending a school owned and operated by the district, attending a public school outside the district under an interdistrict agreement, or for whom the district pays union school assessment or tuition to one or more approved independent schools or public schools outside the district during the annual census period. The census period consists of the first 40 days of the school year in which school is actually in session; and

(B) the full-time equivalent enrollment in the year between the end of the last census period and the end of the current census period, of any

state-placed students as defined in subdivision 11(a)(28) of this title. The fulltime equivalent enrollment of state-placed students attending a union school shall be divided among the member districts in the same proportions that the members divide assessment. A school district which provides for the education of its students by paying tuition to an approved independent school or public school outside the district shall not count a state-placed student for whom it is paying tuition for purposes of determining average daily membership. A school district which is receiving the full amount, as defined by the state board by rule, of the student’s education costs under subsection 2950(a) of this title, shall not count the student for purposes of determining average daily membership.

(2) “Equalization factor” or “k” means the constant factor necessary to make the sum of state aid for education amounts to each school district equal the amount appropriated by the general assembly for state aid to education.

(3) “General state aid” means aid provided to a school district under this chapter.

(4) “Local education spending” for the coming school year means the school expenditure budget, less budgeted additions to general surplus, plus budgeted withdrawals from general surplus, and plus incoming tuition less outgoing tuition. For a year prior to a current fiscal year, “local education spending” means the audited actual total of such district expenditures for that year. Long-term local education spending is the average local education spending for the current year and the year preceding.

(5) “Localmiscellaneous revenues” or “LMR” means revenues from all sources other than property taxes levied under section 428 of this title and general state aid paid under this chapter. Local miscellaneous revenues include endowments,gifts, interest, rents, incoming tuition, federal funds, nongovernmental grants or other state funds such as special education funds paid under section 2962 of this title. Long-term local miscellaneous revenues are the average local miscellaneous revenues for the current year and the year preceding.

(6) “Longterm membership” of a school district in any school year means the average of the district's average daily membership, excluding fulltime equivalent enrollment of state-placed students, over two school years, plus full-time equivalent enrollment of state-placed students for the most recent of the two years.

(7) “Municipality” means a city, town, unorganized town, village, grant or gore; or, in the case of property located within the territorial limits of an incorporated school district, “municipality” means an incorporated school district.

(8) “Resident” of a school district means an individual person who:

(A) is domiciled in the school district;

(B) if required to file a Vermont income tax return, has filed or intends to file an individual or joint return identifying the school district as his or her residence; and

(9) “Resident ownership ratio” or “ROR” means the ratio obtained by dividing the grand list total of resident owned property by the grand list total of all property. The long-term resident ownership ratio of the district is the average resident ownership ratio for the current year and the year preceding.

(10) “School district” means a town school district, city school district, incorporated school district, interstate school district, joint contract school district, or an unorganized town or gore.

(11) “School district adjusted gross income”, or “SDAGI”, means the aggregate adjusted gross income reported to the United States government by taxpayers domiciled in that school district, as measured by personal income tax returns filed with the commissioner of taxes. The long-term school district adjusted gross income of the district is the two-year average SDAGI for the current year and the year preceding.

§ 5002. STATE AID TO SCHOOL DISTRICTS

(a) Annually, on or before August 1, each school district shall submit to the commissioner, audited reports of income and expenditure for the prior year.

(b) On or before February 1 of each year, the commissioner of education shall calculate and publish, using the most recent available data for each school district, the general state aid for education for each school district for the ensuing school year. That state aid for each district shall be calculated according to the following formula:

GSA = LES [1-K*SDAGI/(ROR*ADM)] - LMR

(1) “GSA” means general state aid for the coming fiscal year, always equal to or greater than zero.

(2) “LES” means long-term local education spending.

(3) “K” means the equalization factor as defined in subdivision 5001(3) of this title.

(4) “SDAGI” means long-term district SDAGI.

(5) “ROR” means long-term district ROR.

(6) “ADM” means long-term district ADM.

(7) “LMR” means long-term local miscellaneous revenue.

§ 5003. EDUCATION FUND

(a) An education fund is established to be comprised of the following:

(1) Funds appropriated or transferred by the general assembly.

(2) Revenues from state lotteries under chapter 14 of Title 31.

(3) Twenty percent of the revenues raised by the tax imposed by chapter225 of Title 32 on meals and rooms, and alcoholic beverages, less an annual amount equal to $1,560,000.00 which shall remain in the general fund dedicated to the purposes of promotion of tourism and marketing.

(4) Nineteen percent of the tax on income of corporations, including Scorporations, partnerships, and limited liability companies raised by chapter 151 of Title 32.