The Harwood Unified Union School District (HUUSD) Board heard a report from district director of finance and operations Michelle Baker about her formula for finding the district’s education spending per pupil.

The board directed the administration to prepare an updated education cost per equalized pupil and homestead tax projections to cover FY19 to FY2029. Baker presented that information on May 15.

The motion required that her report include information on the impact of a bond on the tax rate.


Education spending divided by equalized pupils (a student who has a two-year resident weighted average pupil count in the district that does not include tuition students) equals the education spending per pupil; education spending per equalized pupil divided by the yield (which is set by the Legislature annually) equals the equalized homestead tax rate.

The actual homestead tax rate is the equalized tax rate/common level of appraisal. The nonresidential tax rate is the rate set annually by the Legislature divided by the town’s common level of appraisal, not determined by the local school budget.

A pupil has specific weights for different grade levels, poverty, limited English proficiency and by a statewide weighting factor. Baker added that the board used the NESDEC projections they received and averaged enrollment projections over two years to project equalized pupils going forward. NESDEC was hired by the district to project enrollment over the next decade.

Baker went over expenditures, where the district will see an increase from FY2021 to FY2029 of 2.4 percent on average. Baker noted the range is a high of 2.7 percent to a low of 2.2 percent in FY2029. There is a dip in FY2028-29 due to Thatcher Brook Elementary School and Moretown Elementary School having existing debt being paid off.

Revenues decline an average 0.80 percent from FY2021 to FY2029 due to the state Act 173 implementation that moves special education funding from a reimbursement to a census-based model.

Act 173 moves from a reimbursement type that reimburses the district 57 percent of special education spending to a census model that takes into account the total amount of students the district has. Over its implementation phase, revenue will decline in special education for the HUUSD until FY2025.

Waterbury representative James Grace asked about special education costs moving forward with the new Act 173: "Are we accepting that we are going to be able to reduce other costs associated with special education as part of Act 173, or are we simply going to bear more of the burden for those programs as taxpayers?"


The yield is estimated annually by the Vermont tax commissioner. The final determination by the Legislature is based on the financial status of the education fund, change in property values and statewide increases in education spending based on school budgets.

The projected yield increase at 2.75 percent from FY2021 to FY2029 is consistent with the New England Education formula; the average yield over the four years in place is 2.9 percent.

Currently, HUUSD spends $17,968 per pupil, which is over the state average of $16,159. The cost per equalized pupil is expected to steadily rise and is projected at this time to be over $23,000 in FY2029 if there is no new bond debt.

The HUUSD's cost per pupil less exclusions for purposes of the Excess Spending Threshold in FY20 is $17,637. Certain expenses such as approved bond debt and special education costs are excluded for purposes of the Excess Spending Threshold. The FY20 Excess Spending Threshold is $18,311.

If HUUSD's cost per pupil (less exclusions) exceeds the Excess Spending Threshold the tax rate would be based on double the amount of the overage beyond the threshold. As an example, if the HUUSD's cost per pupil were $19,000 and the threshold were $18,500, the homestead tax rate would be based on an education spending per pupil of $20,000 ($19,000 plus $500 x 2).

The current homestead tax rate, not including CLA, is $1.64 this year. Looking ahead the tax rate will rise with no new debt and is projected to be $1.77 in 2028 and will drop down by a penny after. A penny on the tax rate is equivalent to $250,000 in spending per year.

After reviewing new bond debt over a span of 20 to 30 years, Baker advised the board to consider the useful life of improvements when determining a payoff period.