Money for classroom supplies is tight in schools across Vermont. But nowhere are teachers, parents and students more aware of the strictures than at Walden Elementary School, which has been operating without a budget since the current fiscal year began in July.

For months, a group of frustrated taxpayers in Walden, a Caledonia County town with just under 1000 residents, has been engaged in a high-stakes game of chicken with their school district and the Vermont Agency of Education. Three weeks ago, voters rejected a proposed $2.62 million 2013-2014 school year budget, the fourth budget considered and shot down since the original $2.75 million budget was put to a revote in May.

Since that last failed vote, teachers have let it be known that they would welcome donations of pencils, markers, art supplies, copier paper, even Kleenex. A recent note sent home requested that each child in a joint fifth- and sixth-grade class bring in his or her own vinegar, baking soda and paper towels for a science experiment.

“My kids don’t have basic school supplies,” said parent Angela Apicelli at a November 5 Walden School District meeting that drew around 30 residents. “That seems kind of crazy.”

Teachers at the school — which last year served 106 students in grades pre-K through 8 — are doing their best to continue on as normal, Principal Liz Benoit said at the meeting. But she has had to advise staff to make do with the minimum of supplies until uncertainty around the school’s funding is resolved.

That may not be any time soon.

Under Vermont law, property owners in a district without a voter-approved budget still pay the base statewide education tax rate and, in return, their district still receives some money to continue educating its students.

But state education funds can only be tapped for funds equal to three-quarters of the base education amount per pupil, a number set every year by the legislature. For the Walden district, that will equal less than half of the total anticipated in the district budget.

The law also allows the district to borrow, but only enough to fill the coffers to 87 percent of the previous year’s budget. Caledonia Central Supervisory Union staff calculates that amount will see the school through March or April, several months before the end of the fiscal year in June, superintendent Martha Tucker explained at the meeting.

What is not at all clear is what happens then.

“Schools are required to educate students at the public’s expense. What happens if there is not enough money to do that?” Tucker said. “No one knows what happens, because it has never happened before.”

“This is uncharted water,” concurred Vermont Agency of Education finance manager Brad James in an interview. “We don’t know.”

Stiff Opposition

For all the concern about the growing burden of education costs on taxpayers, a revolt like the one going on in Walden is still rare.

In recent years, more than 90 percent of all school district budgets were approved at the March annual meeting, said Steve Dale, executive director of the Vermont School Boards Association. In 2013, the percentage was closer to 95 percent.

“This is an anomaly,” Dale said of the impasse in Walden. “Big time.”

There are notable exceptions. Milton and Williston voters took two tries this year to approve their school budgets. In Bennington, there were three rounds of balloting. For Rutland Town, five special district votes were held before residents gave their OK to a level-funded budget in September.

Generally, though, a consensus is reached within a few months. In fact, it has been 20 years since a Vermont district has gone past mid-November without an approved budget. The Benson school district in Rutland County operated for an entire year without voter approval in 1993-1994, paying its way with a bank loan. That misadventure prompted the legislature to set the 87 percent borrowing limit in 1995.

“It’s intended to put pressure on both sides,” said Bill Talbott, deputy commissioner of the Agency of Education. Unless school district officials and voters find a compromise, he said, “they won’t make it through the whole year.”

Yet after four rounds of voting in Walden, the opposition, despite getting off to a late start, remains stiff.

Budget opponents joined forces after the district’s $2.75 million school budget — representing a 20 percent increase in spending — was approved by just four votes, 84-80, at the March meeting. A signature drive resulted in a successful petition for a rescission vote by ballot in May, when the budget first went down in a stinging defeat, 197-66.

Since then, that core of about 200 opponents has shown up again and again to keep a budget from passing. The latest round was much closer, with the naysayers prevailing 200-149.

“All of the board feels a little bit blindsided,” said Ray Lewis, one of three members of the Walden School Board. The district has had its budgets approved with relative ease over the past five years. “During that time, we have been really careful with finances,” he said.

In fact, recently Walden has been among the most conservative Vermont districts in terms of spending. Per-pupil spending in fiscal year 2013 was just under $11,600, a figure that landed the district in the bottom quarter of all 286 statewide, according to an analysis by the Agency of Education.

“Here we have been spending the bare minimum to educate the kids who show up at our door,” Lewis said. The board has shared those facts with the public at informational meetings and a website, but it hasn’t seemed to make a difference. “People don’t want to listen or don’t believe me,” he said.

As in most communities, some Walden voters consistently vote against the school budget. For some, it stems from long-standing anger over the loss of the town’s one-room schoolhouses decades ago, Lewis said. Others oppose the very idea of public education.

This year, that group is joined by people who feel they are doing the only thing they can to stem the growth in education spending — and its impact on their tax bills.

As much as 75 percent of the Walden budget this year is set by contract or regulation and can’t be scaled back by district officials or voters.

“We are being asked to vote on a budget and then being told that we can’t impact three-quarters of it. We don’t have any control over our spending,” said resident Lee Johnson at the board meeting. “Walden can’t afford to support this on their own, and neither can any other town in this state.”

Another resident, Pam Montgomery, responded by saying she agrees that rising property taxes are a big problem, but continuing to vote “no” is not the way to address it. “Punishing the children of Walden is not the way to go about it.”

The fact remains that even the stripped-down $2.6 million budget presented in October would bring a 16 percent spending increase.

Tucker, the superintendent, told residents at the meeting that district officials had shaved off about as much as they legally could.

Small school districts across the state are all grappling with similar challenges: an unpredictably fluctuating student population and a lack of in-house capacity to respond to students with costly special needs. Unfortunately, in Walden, both have popped up during the same budget year. Several students now require expensive support services. And additional students added to an already large combined fifth- and sixth-grade class made the group too large for one teacher to handle, Tucker said.

At the same time, the district is carrying a lot of fixed expenses. There are the staff and bussing contracts and, most significantly, high school tuition.

The Walden district does not currently have a designated high school, which means families can decide where to send their teens. In recent years, almost half of the high-school-age students have gone to the private St. Johnsbury Academy. Other popular choices are Hazen Union High School in Hardwick and Cabot High School. In total, tuition for the town’s 54 high school students costs almost $800,000 — more than one-third of the total budget and a line item with zero flexibility.

Another less obvious factor is that high school choice draws families to the area — specifically to take advantage of it. Several residents there said it seems that parents who are in town for a discrete period of time are less personally invested in the success of the elementary school.

“It does drain away resources for the elementary school, and it drains away allegiance to the elementary school,” Tucker said at the meeting.

“You can’t overstate this vicious circle around high school choice,” added Gene Podhurst.

“I feel really concerned for the future of this town right now,” Bill Half said.

However, administrators say they know that most of the community wants to support the schools. “These are people who care and are struggling to educate their kids,” Tucker said. “All of the issues that are going on in Vermont are nestled here in this community.”

Seeking Outside Help

Walden’s latest budget cut both the librarian and the world language teacher positions. One of the few potential savings left to consider that was discussed at the meeting would be to entirely close down the modular classroom that now houses a library, designed to serve both the school and the community. That idea did not sit well with library board secretary Marie Batchelder. “I really want you to understand that we as a board have good rights to sue the school” if that happens, she said.

“So we should keep the library open to the detriment of the children if it comes to that?” asked school board chair Judith Clifford.

The obvious way to end the looming financial crisis at Walden Elementary School would be to get a budget approved before the funds run out next year. The district’s weary board members know they will soon be scheduling another day of voting.

But before they do, they want to spend more time trying to engage middle-of-the-road voters who may have not yet participated. There are 655 registered voters in town. Budget supporters suspect a significant number of parents of schoolchildren are not coming out to vote.

The board also wants officials at the Agency of Education to come to a meeting to explain what lies ahead for the district. And it’s looking into professional mediation services.

“We’ve done everything we can do to pass this budget — even more than that,” Lewis said at the meeting. “It’s time to bring in outside help.”

Another road leads to the state legislature, which has left unclear what should happen if the district runs out of cash. If there is no budget by January, agency and school district officials expect to be soliciting help in defining the next steps.

But at least one of the politicians representing Walden believes the time has come for an even broader discussion of state education financing.

“I think there is a growing consensus that the funding mechanism is in the process of breaking down for a number of towns,” said State Senator Joe Benning (R-Caledonia). “It is probably past the time that we should have this brought back for discussion.”

Either way, Lewis fears that Walden’s recent history will end up being a cautionary tale for other school districts. He sees voters focusing more and more only on the cost side of education and not on its results and overall benefit to society. He won’t be surprised if new budgets stall in several districts in Vermont next year.

“The idea of education [costs] being out of control is not going away,” Lewis said.