WHITE RIVER JUNCTION — The School Board is proposing an operating budget of $52.4 million next school year along with a $21 million bond to fund district-wide repairs and infrastructure improvements in school facilities, including roof replacements and heating and ventilation system upgrades.

At a meeting on Tuesday, the School Board voted unanimously in support of a budget that increases spending next year by approximately 3%, half of which is attributable to contractual increases in employee salaries and benefits.

The approved budget is $1.25 million less than a previous draft of the proposal. The board directed Superintendent Tom DeBalsi to create a list of recommended spending cuts, which the board will discuss at their next meeting on Jan. 25.

Board member Peter Merrill recommended suspending the search for a new superintendent to replace DeBalsi, who plans to retire at the end of the 2024-25 school year. The board had hoped to have the new hire work alongside DeBalsi next school year to facilitate the district’s transition in leadership — which meant budgeting an additional $218,000 for the second superintendent.

“If we’re trying to avoid costs, effectively having two superintendents is something that we can avoid,” Merrill said.

The tax impact of the budget proposal is also unclear at present, largely due to a new state law aimed to help communities avoid a large property tax increase in the span of a year.

Hartford is facing a dramatic spike in its property tax rate due to a drop in the town’s Common Level of Appraisal, or CLA, which is part of a formula used to ensure that each Vermont town is paying its fair share to the state education fund.

Surging property values in recent years have caused Hartford’s CLA to fall to 66%, which means that the town’s grand list — or total assessed values of its parcels — reflects only 66% of the actual market value of those properties.

Currently, the proposed budget would result in a 42% increase in the homestead tax rate, or an additional $2,250 on a $300,000.

But a new provision in Act 127, which dramatically adjusted Vermont’s school funding formulas to create more student equity, imposes a 5% cap on increases to a district’s homestead tax rate for the next five years.

Importantly, in the first year of this cap, the state education fund will cover any revenue shortfall that results from capping the tax rate — provided that the district’s budget keeps its increase in per-pupil spending under 10%.

In the first year of this cap, the state education fund will cover any revenue shortfall that results from capping the tax rate.

But only “for a year,” Jacob Vezina, the district’s finance director, said.

Due to the complexity of Vermont’s funding formula, Vezina said he could not calculate yet what the budget’s tax impact would be under the capped rate, though he will provide those estimates at the next board meeting.

With the $1.25 million in spending cuts, Hartford’s budget proposal increases per pupil spending by 9% — which would qualify the district for the tax cap and state funding assistance next year.

Merrill said relying on the tax cap could have repercussions in future school years should the district be hit with unanticipated costs that would require cutting spending elsewhere to keep future tax rate increases under 5%. But tapping the state funding in next year’s budget will enable the district to avoid having to make more severe cuts to minimize the tax impact.

DeBalsi estimated that he would need to cut spending by $5.5 million to shrink the tax impact to a 5% increase.

“It’s the only avenue we have that doesn’t involve immediate and very hard choices,” Merrill said of the tax cap.

Having a tax cap in subsequent years will place more urgency on getting voters to approve the $21 million bond, because $4.5 million of those funds are intended for projects that require completion as soon as possible, according to board members.

At a Dec. 13 meeting, Buildings and Grounds Director Jonathan Garthwaite presented a comprehensive list of over 70 targeted facility repairs or upgrades in the district’s six school buildings and its administrative building. Projects needing immediate attention include $210,000 in improvements to bring the high school auditorium into compliance with the state fire code and the Americans with Disabilities Act, $110,000 to correct stormwater drainage problems at Ottauquechee School and $75,000 to replace the elevator controls at Hartford Memorial Middle School.

Proposed projects also include roof replacements at Dothan Brook and Ottauquechee elementary schools, a $1.5 million stormwater drainage system at Hartford High School, an HVAC system replacement at the middle school and new paving at White River elementary school.

“If the bond does not pass, we still have to pay for all the structural work that we were going to have to do anyway because we don’t have a choice on those (projects),” Merrill noted.

The Selectboard and School Board will co-host an informational meeting on Thursday to discuss additional ballot questions on the town warning, including the school bond request. The meeting will take place in the Hartford High School auditorium at 6 p.m.

Presentations also will include an article seeking a $1.3 million bond to renovate and expand Fire Station 2 in Quechee and proposed revisions to the town charter.

A separate meeting to present the town and school budget proposals will be scheduled for the end of the month.

Patrick Adrian may be reached at padrian@vnews.com or 603-727-3216.