Excess Spending Threshold

Under Act 68, a district with an education spending amount per equalized pupil (less approved construction costs and other specific exclusions) greater than the excess spending threshold incurs an additional tax for the amount over the threshold. The threshold amount is based on statewide data from the prior year.
   
OVERVIEW
   
   

With the passage of Act 68 in 2003, the Vermont Legislature included an excess spending provision to encourage districts with high per pupil costs to examine why costs were so high. This provision set a threshold over which any spending was deemed to be in excess. Districts spending over the annual threshold are taxed a second time on the excess spending amount. The threshold amount is calculated annually using statewide data from the prior fiscal year, multiplied by a given percentage.

The prior year data used for the threshold are the totals for statewide education spending, equalized pupils and approved exclusions:

Excess spending exclusions:

16 V.S.A. § 4001 (6)(B)

i.) Principal and interest payments for capital projects begun and paid for under the State construction aid suspension provided no reimbursement or aid from the State shall be received.

ii.) For capital projects begun before the suspension and that received state construction aid, P&I plus any interest on an anticipation note while awaiting State aid.

iii.) Principal and interest payments for approved capital construction spending, deposits into a reserve account for such future approved spending, and the portion of tuition to a designated independent high school attributable to such P&I costs that received preliminary State approval.

iv.) Planning costs for the merger of a small school (average grade size of 20 or less) with one or more schools.

v.) the district's share of special education spending in excess of $50,000 for any one student two years prior (FY2009 costs for FY2011 exclusions)

vi.) a deficit solely attributable to tuition paid for one or more students moving into the district after the budget was approved if the district tuitions all of its resident students to public schools or approved independent schools.

vii.) For a district that pays tuition for all of its resident students and which had students move in after the 20-day census period, the average tuition times the number of students that exceeds the most recent average daily membership count for which the district will pay tuition in the subsequent year.

viii.) Tuition paid by a district that does not operate a school and pays tuition for all resident students in grades K – 12 unless the electorate of the district has approved payment to an approved independent school of a higher tuition rate than the average announced tuition for union elementary or high schools.

2007, No. 66, § 12
Any excess spending attributable SOLELY to new special education spending in a district with 20 or fewer equalized pupils that does not maintain an elementary or high school.

These data are used to calculate the statewide average education spending number per equalized pupil, less approved exclusions. Approved construction costs are considered to be costs for projects eligible for state construction aid as defined in chapter 123 of Title 16 and also include eligible principal and interest payments.

A statutory percentage of 125% is used to increase the prior year education spending per equalized pupil (less approved exclusions) to determine the threshold amount. Act 68 provided a transition period, however, with the applicable percentage being 135% in FY 2005, 130% in FY 2006 and 125% in FY 2007 and thereafter.

   
FY 2014 EXCESS SPENDING THRESHOLD
 
 
FY2013 statewide education spending per equalized pupil less eligible costs
=
$12,365.09
       
 
Percentage for FY2014
=
125%
       
 
Excess Spending Threshold
=
$12,365.09 x 125%
       
 
Excess Spending Threshold FY2014
=
$15,456 (rounded to zero decimal places)
   
   
FY 2013 EXCESS SPENDING THRESHOLD
 
 
FY 2012 statewide education spending per equalized pupil less approved construction costs
=
$11,872.55
       
 
Percentage for FY 2013
=
125%
       
 
Excess Spending Threshold
=
$11,872.55 x 125%
       
 
Excess Spending Threshold FY 2013
=
$14,841 (rounded to zero decimal places)
   
   
FY 2012 EXCESS SPENDING THRESHOLD
 
 
FY 2011 statewide education spending per equalized pupil less approved construction costs
=
$11,786.63
       
 
Percentage for FY 2012
=
125%
       
 
Excess Spending Threshold
=
$11,786.63 x 125%
       
 
Excess Spending Threshold FY 2012
=
$14,733 (rounded to zero decimal places)
   
   
FY 2011 EXCESS SPENDING THRESHOLD
 
 
FY 2010 statewide education spending per equalized pupil less approved construction costs
=
$11,638.82
       
 
Percentage for FY 2011
=
125%
       
 
Excess Spending Threshold
=
$11,638.82 x 125%
       
 
Excess Spending Threshold FY 2011
=
$14,549 (rounded to zero decimal places)
   
FY 2010 EXCESS SPENDING THRESHOLD
 
 
FY 2009 statewide education spending per equalized pupil less approved construction costs
=
$11,186.99
       
 
Percentage for FY 2010
=
125%
       
 
Excess Spending Threshold
=
$11,186.99 x 125%
       
 
Excess Spending Threshold FY 2010
=
$13,984 (rounded to zero decimal places)
   
FY 2009 EXCESS SPENDING THRESHOLD
 
 
FY 2008 statewide education spending per equalized pupil less approved construction costs
=
$10,629.71
       
 
Percentage for FY 2009
=
125%
       
 
Excess Spending Threshold
=
$10,629.71 x 125%
       
 
Excess Spending Threshold FY 2009
=
$13,287 (rounded to zero decimal places)
   
FY 2008 EXCESS SPENDING THRESHOLD
 
 
FY 2007 statewide education spending per equalized pupil less approved construction costs
=
$10,075.34
       
 
Percentage for FY 2008
=
125%
       
 
Excess Spending Threshold
=
$10,075.34 x 125%
       
 
Excess Spending Threshold FY 2008
=
$12,594 (rounded to zero decimal places)
   
FY 2007 EXCESS SPENDING THRESHOLD
 
 
FY 2006 statewide education spending per equalized pupil less approved construction costs
=
$9,382.21
       
 
Percentage for FY 2007
=
125%
       
 
Excess Spending Threshold
=
$9,382.21 x 125%
       
 
Excess Spending Threshold FY 2007
=
$11,728 (rounded to zero decimal places)
   
FY 2006 EXCESS SPENDING THRESHOLD
 
 
FY 2005 statewide education spending per equalized pupil less approved construction costs
=
$8,728.64
       
 
Percentage for FY 2006
=
130%
       
 
Excess Spending Threshold
=
$8,728.64 x 130%
       
 
Excess Spending Threshold
FY 2006
=
$11,347 (rounded to zero decimal places)
   
FY 2005 EXCESS SPENDING THRESHOLD
 
 
FY 2004 statewide education spending per equalized pupil less approved construction costs
=
$8,066.05
       
 
Percentage for FY 2005
=
135%
       
 
Excess Spending Threshold
=
$8,066.05 x 130%
       
 
Excess Spending Threshold
FY 2005
=
$10,889 (rounded to zero decimal places)

Page Last Updated on December 4, 2014