With school tax bomb looming in Norwich, Dresden district scrambles for solutions

By ALEX HANSON

Valley News Staff Writer

Published: 01-28-2023 11:28 PM

NORWICH — A change in how Vermont funds public education will lead to a big tax increase in Norwich.

Act 127, approved last year, assigns greater weight to students in poverty or who are learning English as a second language.

According to a study that informed the writing of Act 127, only 1.86% of Norwich students lived in poverty in 2020. That’s the smallest percentage in the state. Only the southern Vermont ski towns of Stratton (3.8%) and Winhall (8.3%), and neighboring Thetford (9.7%), were in the single digits.

Also in the 2020 data, now a bit musty, is the projected tax rate increase for Norwich: 32%, phased in over five years.

Perhaps because of the coronavirus pandemic and other pressing issues, this hasn’t dawned on Norwich yet. Neil Odell, the longest-serving member of the Norwich School Board, said he often runs into residents who are completely unaware of the new law’s effect on their town.

“At the state level, it was the right thing to do,” Odell said in an interview. The formula for determining state aid was wrong, he added, written in 1997 and long out of date.

But locally, officials in Norwich and Hanover, Norwich’s partner in the Dresden Interstate School District, are trying to figure out ways to soften the blow to Norwich taxpayers. A couple of ideas would change the fabric of the state’s wealthiest town, but in the short term, Norwich will lean harder on a long-standing economic advantage: tuition students at Hanover High School.

How pupil weighting works

When Vermont enacted its landmark school funding law, Act 60, in 1997, it put in place a way to pay schools a little more for students in poverty, students learning English as a second language and secondary school students. But those “weights” were a shot in the dark, and by the 2010s were well out of date. The state Legislature approved a study, completed in 2019, that found the weights were inadequate to provide sufficient funding for students in those categories. The new weights, approved last year, provide more funding for schools with more students in the three groups above and for small schools and districts.

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What this means is that the state will effectively consider Norwich to have fewer students because it has so few in the more heavily weighted groups. So where Norwich would once have had 580 “equalized pupils,” under the new weights it would have 475 (again, the figures are from 2020).

This has the effect of raising Norwich’s cost per equalized pupil, on which Vermont bases its school taxation.

By contrast, First Branch Unified District, comprising Chelsea and Tunbridge, which had nearly 35% of its students living in poverty in fiscal year 2020, would see an increase in its equalized pupil count and a resulting increase in funding of nearly $560,000.

In the long run, Odell said, Norwich could bring its equalized pupil count back up by building affordable housing for lower-income residents or welcoming families to town who are not native English speakers, refugees perhaps.

Norwich has struggled to come to a consensus on the need for affordable housing, though, much less on the locations and means for actually building it.

“I don’t hold out a lot of hope that that’s going to be a viable solution for Norwich,” said Odell, who’s also president of the Vermont School Boards Association. “But I hope people know that that is one way that we could address that possible tax rate increase.”

The tuition solution

A shorter-term solution involves recruiting and retaining more tuition students at Hanover High School.

“If we bring in more tuition revenue in Dresden, then that lowers the assessments to the two towns,” Odell said.

Hanover and Norwich have been partners for 60 years in the Dresden district, which oversees Richmond Middle School and Hanover High School.

The high school has for some time operated as a kind of magnet school for children from families outside the district who value academic achievement. Towns that don’t belong to a high school district or designate a high school, such as Cornish, Croydon and Lyme in New Hampshire, and Hartland, Weathersfield, Sharon, Strafford, Tunbridge and Chelsea in Vermont, can send students to any approved high school.

The decline in enrollment in the Twin States over the past 20 years has led to more jockeying among high schools for tuition students, and Hanover has seen its tuition figures decline. In the current year, officials budgeted for a little over $3 million in tuition revenue, but now expects to take in a little over $2.6 million.

The Hanover Finance Committee, which also tries to fulfill the role of the Dresden Finance Committee in the absence of members from Norwich, raised the idea at a meeting in September. (Norwich had an elected Finance Committee for many years but found that such a structure wasn’t supported by state law. The Norwich Selectboard appointed a new Finance Committee in 2018, but a majority of the board resigned en masse in January 2021 and hasn’t been replaced.)

The interstate compact that created Dresden requires a Dresden Finance Committee, said Kimberly Hartmann, the Hanover School Board’s representative to the Hanover Finance Committee.

“We always consider Norwich in our Dresden opinions,” she said.

Among the solutions to Norwich’s impending tax increase that the finance group considered in September were attracting more tuition students, raising athletic fees, looking for opportunities to consolidate some classrooms and studying existing tuition agreements, which have undercharged sending districts for many years, a pre-pandemic analysis found.

Hartmann also leads a recently formed Dresden Tuition Committee. So far it has met twice, both almost entirely in executive session to discuss tuition contracts.

Dresden has contracts with two New Hampshire districts that are soon to expire. A deal with Cornish ends June 30, and one with Lyme ends two years later, Hartmann said.

Sydney Leggett, interim superintendent for Cornish, said the district has tuition agreements to send students to three high schools: Stevens High, in Claremont, and Hartford and Windsor high schools. Parents also may send students to Lebanon and Hanover, “but we don’t have a district-to-district tuition agreement,” Leggett said.

Cornish will pay the highest tuition from among the three agreed-upon high schools toward Hanover High, but parents must make up the difference. This year, the Cornish payment amounts to $19,500 and parents must pay $3,055. There are eight Cornish students at Hanover this year, according to Dresden documents.

Hanover High School’s tuition has been artificially low for the past several years, Hartmann said, owing to a flaw in how the rate was first calculated and then reset each year. If it reflected the actual cost of a year at Hanover High, it would cost another $4,000 per student. The Dresden district is forgoing about $270,000 of revenue this year as a result, she said.

Exactly what the tuition committee is considering is unknown.

“I cannot speak to what we’re talking about in nonpublic” session, Hartmann said. “A lot of these things are part of negotiated agreements.”

Eventually, the committee will make recommendations to the full Dresden board.

“I think the most important thing is what should Dresden do for the next year,” Hartmann said. “It’s really just trying to figure out where Dresden should go in the future.”

Both Hartmann and Odell noted that the education funding landscape is changing in Vermont and up for debate in New Hampshire, where advocates for public school are pushing for better state funding even as the state expands the number of charter schools and eligibility for “education freedom accounts” that allow public money to go to private and religious schools or to home schooling.

In the wake of a U.S. Supreme Court ruling that requires districts paying tuition to include religious schools, Vermont could limit where tuition money goes, which could make it harder to use tuition money to defray Norwich’s higher taxes next year, Odell said.

In the meantime, Odell and his fellow Norwich board members are talking to townspeople about the tax increase.

“I still talk to people who have no idea this is coming,” Odell said.

Alex Hanson can be reached at ahanson@vnews.com or 603-727-3207.

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