As Mascenic Regional School District voters consider the Nov. 3 ballot question regarding HB 1300, it is important to understand not only what the proposed tax cap would do, but how its formula would interact with Mascenic’s unique financial circumstances. The legislation’s timing and mechanics create what can only be described as a perfect storm.
Based on current estimates, the FY27 school tax levy is approximately $12.56 million, including approximately $1.51 million in bonded costs. Under the tax cap formula, the tax levy removes that $1.51 million before calculating the cap, reducing the starting point to about $11.04 million. After applying an estimated 3.6% inflation and property-growth factor, the resulting FY28 maximum tax levy would be approximately $11.44 million.
The timing of Mascenic’s bond retirement compounds the issue. The bond will be paid off at the end of FY27 – a positive development for the district and taxpayers. However, under the proposed formula, the bond payment is excluded from the levy calculation while the revenue associated with that debt, including state building aid and the IRS interest rebate, will also disappear once the bond is retired. In effect, Mascenic feels a negative impact from the bond on both sides of the equation.
At the same time, responsible fiscal management has allowed the district to return a larger-than-usual fund balance to the towns this year. Returning unspent taxpayer money is generally seen as sound financial stewardship. Under the proposed formula, however, those funds cannot simply be carried forward as part of the tax levy. The larger fund balance returned to taxpayers therefore lowers the starting point for the tax-cap calculation in future years.
Additionally, Mascenic has operated under three consecutive years of default budgets and has already made difficult decisions to manage within available resources. Those decisions have already reduced middle school extracurricular programming, increased class sizes at HHES and BMS due to reduced teaching staff, cut administrative costs at the SAU, and eliminated the three-year-old preschool program.
Taken together, three years of default budgets, a larger-than-usual fund balance returned to taxpayers, the treatment and retirement of the bond, and the loss of associated revenue create an unusually restrictive starting point for Mascenic.
Mascenic’s current estimate puts the FY27 default budget at approximately $23.83 million. Under the proposed tax-cap calculation, the district estimates a maximum FY28 budget of approximately $20.49 million – a difference of approximately $3.35 million. While the bond principal and interest can be removed from that difference, the remaining gap still does not cover student needs, contractual obligations, inflation, enrollment changes, or other costs that may arise in FY28.
A reduction of this magnitude cannot be achieved through small efficiencies or by simply asking departments to “tighten their belts.” It could fundamentally change what Mascenic can provide. It could mean significant reductions in teaching staff and larger class sizes, the elimination of academic and curricular programming that is not legally mandated, closure of buildings, and potentially reaching a point where keeping all students in our own community becomes increasingly difficult or where tuitioning students out of district actually provides them with more opportunity than keeping them within district.
These are not outcomes the district wants to pursue, nor are they the result of Mascenic suddenly increasing spending. They are the potential consequence of applying a new formula to a district entering that formula under the perfect storm of financial circumstances.
The numbers are estimates, and the actual impact will depend on exact revenues, expenditures, state funding, property growth, and the final implementation of the law. Under the proposed HB 1300 formula, Mascenic could face a reduction of more than $3 million dollars simply to remain within the allowable tax levy. It would fundamentally change the educational opportunities and services Mascenic can provide to students and families – now and in the future.
Liz Pogorzelski is the superintendent of the Mascenic Regional School District. Melissa Gray is the assistant superintendent of the Mascenic Regional School District. Rachel Anderson is the business administrator for the Mascenic Regional School District.