Burlington finance director says child-care payroll tax and retirement changes shifted costs onto districts

Nathan Lavery told the Ways & Means Committee the district has absorbed new costs from recent state policy changes that affect its budget calculations.

Lavery said Vermont's recently enacted child-care payroll tax created a new line-item expense for the district. "One of the new line item expenditures in our budget is...the childcare payroll tax," he said, and noted the law permitted passing a portion of the cost to employees but collective bargaining agreements limited Burlington's ability to do so.

He also described how a change in rules governing contributions to the state teachers' retirement fund has redirected funds the district previously spent on programming or staff. "When I started here, the contributions to the state teachers' retirement fund were all made by the state. And then the law changed...if you're paying any teacher with any federal dollars, you've got to make that contribution from your federal dollars," Lavery said, describing the fiscal impact on local budgets.

Committee members pressed the witnesses on how those policy changes affect the district's education-spending number — the figure that feeds state calculations and can affect tax yields. Lavery emphasized the distinction between total budget (which can rise due to federal grants) and education spending (the denominator for certain state calculations) and said the district provides voters with scenarios showing both assumed state buy-downs and the December 1 letter baseline.

Claire Wuhl and Lavery both urged caution before generalizing Burlington's experience to all districts; they said local staffing, collective bargaining and district size affect how policy changes translate to the classroom and tax bills.

No formal committee action followed; district officials provided information for legislators to consider as they weigh funding and policy choices.