‘Three-by-One’ merger committee folds

Andrew McKeever Photo

A merger study committee consisting of representatives from Stratton, Winhall and Sandgate meeting last month at the Manchester Elementary Middle School. The merger committee has decided to put further efforts on hold for the time being.

Andrew McKeever

GNAT TV News Project

MANCHESTER — A committee formed to explore a merger of the school districts of Winhall, Sandgate and Stratton into one Act 46 unified district has concluded that the implications for the tax rates for each of the three communities make such a combination undesirable at this time.

The merger committee voted to dissolve itself during its meeting Tuesday, Sept. 19 and file a report to the Agency of Education stating that it was inadvisable to merge, said Dean Gianotti of Winhall, who was serving as the chairman of the four member merger study committee.

The possibility that Winhall’s tax rate could increase by as much as 35 cents  – it is currently about $1.84 – largely  driven by an increase of 29 students in the school district, was a key factor in killing the interest among the three towns about moving forward towards a merged district, he said, adding that Sandgate and Stratton would have also seen their tax rates rise as a result of Winhall’s projected tax increase, as things stand at present.

“What it boiled down to was the preliminary numbers on the merged tax rate were on the low side,” he said, noting that they felt it was necessary and appropriate for each of the existing school boards to discuss the implications of these tax increases.

That may have been difficult, given that the merger committee would have had to present their articles of agreement under which the three school districts would have merged, along with information on the projected tax rates, to voters for approval by November 30. None of the three school districts operates its own schools within their town boundaries and pays tuitions for all their Kindergarten – 12th grade students.

Initially, the merger committee was hoping to form a “3×1” side-by-side  merger with the Arlington School District, under Act 49, successor legislation passed this year by the state Legislature. Act 49 followed the landmark Act 46 school consolidation statute passed in 2015 and amended slightly in 2016, and was designed to give school districts which so far have been unable to form alliances with other neighboring school districts. Arlington has also been unable to find an Act 46 “dance partner,” and had the four districts found a path forward to work together on a consolidation, the three non-operating towns would have been in line to receive the tax breaks originally included in Act 153, earlier legislation which authorized the formation of regional education districts, or REDs. Those would have been paid out over the next four years and are part of the package of incentives intended to encourage school districts to merge. Under this “3×1” formula, however, Arlington would not have qualified for the four years of tax breaks, which start at 8 cents off the local education property tax rate and decline by 2 cents each year for the following three years. This may have played a role in the tepid enthusiasm of the Arlington School District for the merger, which reported, through its school superintendent, William Basyk, that there was a real possibility it would not participate, during the merger committee’s previous meeting on September 5. Arlington’s own Act 46  study committee was also meeting Tuesday, Sept. 19, and it was his understanding that they were not recommending moving forward with their side of the proposed merger, Gianotti said Wednesday, Sept. 20.

The Arlington school district is holding a board meeting next week, on Wednesday, Sept. 27.

However, the three non-operating towns could still have merged and put Act 46 behind them without Arlington’s participation. But without Arlington’s involvement, they would not qualify for the tax incentives either. Eventually, the  tax implications of the merger, given the possible drastic jump in Winhall, were too high a hurdle to overcome, Gianotti said.

“The merged tax rate would have been unacceptably high,” he said.

Tax issues were always problematic as the merger committee reviewed its options over the past several weeks, going back to early August when they formed their committee. They hired Daniel French, the former superintendent of the Bennington Rutland Supervisory Union as their consultant. French produced a report and a proposed set of Articles of Agreement under which the the three districts would merge which indicated that tax rate in Winhall could decline by about 7 cents, while the tax rates would rise by 8 cents in Sandgate and by 19 cents in Stratton. Those numbers were based on current fiscal year data with no significant changes in education spending in any of the districts. It would have created a merged tax rate of about $1.77, before the merger incentives, if those could have been applied.

However, that scenario apparently was upended when Winhall’s student population rose so dramatically, forcing a recalculation of their local tax rate.

Currently Winhall pays the state average tuition to all schools where its students attend, with the exception of Burr and Burton Academy, where it pays the full “in district” tuition. That means parents don’t have to make up a differential between a state average tuition number and a higher rate of tuition a receiving school might charge.

The Winhall School Board, of which Gianotti is also a member, will be reviewing options to present to voters in upcoming months and he anticipated a public information meeting, possibly as early as October, to see what they can do to reduce the projected tax rate, driven in large part by their enrollment increase and the added education spending associated with that, he said.

The district currently has an enrollment of about 180 students, including the 29 new students added since last year, he said.

One of the advantages of merging the three districts into one would have been that they would have retained school choice. Now, it will be back to the drawing board once they file the report with the Agency of Education on the non-advisability of the proposed merger.

The state education agency may well come back with a directive next year urging them to try again. Under Act 46, districts which have not consolidated into a smaller number of entities may be assigned merger partners by the education agency, a process intended to be completed by 2019.

Since the three districts will not be merging, they will be required to end self-study reports to the state to justify their current governance structures, Dan French, the consultant, stated in an email, adding he thought the variation in the tax rates was the biggest hurdle.

For its part, Arlington will continue with its study committee, and will also have to file a self-study report to the education agency by the end of the year, said William Basyk, the superintendent of the Battenkill Valley Supervisory Union, which includes Arlington and Sandgate. For the moment, the Arlington school district is “back to square one,” and “may wait until the (next) legislative session and see what shakes out,” he stated in an email.