Vermonters’ property tax bills are projected to rise yet again next year, but both the Republican governor and Democratic lawmakers say they’ll take action during the next legislative session to minimize the financial strain on residents and businesses.
An analysis published by the Vermont Department of Taxes on Monday found that property taxes will likely need to go up by 5.9% next year in order to keep pace with rising school budgets. That jump would come on the heels of a nearly 14% average increase that Vermonters are seeing in their property tax bills this year.
While next year’s forecast isn’t as dire as some elected officials had feared, House Speaker Jill Krowinski said the projected increase is more than many homeowners can bear.
“Continued growth in our property taxes is unaffordable for Vermonters across the state,” Krowinski said in a written statement. “The House of Representatives is committed to taking action with short- and long-term strategies to reduce costs while ensuring our kids have a great education.”
Republican Gov. Phil Scott has been pushing for more aggressive cost-containment measures in the education system since he was elected in 2016. After losing a historic number of seats in the Legislature last month, Democrats say that property taxes have become a top priority.
Taxes are just a derivative of spending, and unless we’re willing to do the hard work to force a change in that trajectory, then it’s not going to get better for taxpayers.Caledonia County Senator-elect Scott Beck
Brattleboro Rep. Emilie Kornheiser, the Democratic chair of the House Committee on Ways and Means, said a special commission has been working this summer and fall to identify cost-saving reforms to the education system.
While local school boards are ultimately responsible for crafting the budgets that determine overall education spending in Vermont, Kornheiser said the state needs to pursue system-wide reforms.
“It’s not fair to just leave it up to individual school districts to find their way through this,” Kornheiser said. “There’s a lot of cost savings we could find through economies of scale. There’s a lot of technical assistance and data that could be provided by the Agency of Education to help people make better decisions. And this is something that we all need to be in together.”
Caledonia County Senator-elect Scott Beck, the incoming Senate Minority Leader, said if the 5.9% projection materializes, then Vermonters would see a 33% increase in their property tax burden in a span of just three years.
He said that’s an untenable trajectory for middle-class families that are barely scraping by.
“And so when the government swoops in here and says, ‘Hey, you owe another $500 or $1,000 or $2,000,’ we explode that family’s budget,” Beck said.
Education costs in Vermont have ballooned during Scott’s four terms in office. In 2016, the state spent about $1.5 billion annually on public schools. This year, that number will exceed $2.3 billion. Over the same time period, the number of staff working in public schools increased by 5.15%, while the number of students enrolled in those schools dropped by 5.4%.
Vermont schools now have one staff person for every 3.63 students, the lowest ratio in the U.S.
Beck said the only way to reduce the rate of increase in property taxes is to limit school spending.
“Taxes are just a derivative of spending, and unless we’re willing to do the hard work to force a change in that trajectory, then it’s not going to get better for taxpayers,” he said.
Don Tinney, president of the Vermont teachers’ union, diagnoses the problem differently.
“The real issue for Vermont right now is that we have a school funding problem. We don’t have a school spending problem,” Tinney said. “And policymakers need to make that a priority so that they can deliver property tax relief for middle-class Vermont homeowners while continuing to provide a high-quality education for our students.”
The Vermont-NEA will be advocating next year for a shift to an income-based financing system for education. Tinney said that approach will ease the burden on middle-income families by distributing a larger share of education taxes to higher-income households.
Whatever structural reforms lawmakers and the governor pursue next year are unlikely to yield significant cost savings in the short term. And Scott has indicated that he’ll propose using one-time money to “buy down” property taxes in the meantime, so as to avoid another sharp increase.
Senate President Pro Tem Phil Baruth said he’s open to using that option to get next year’s increases more in line with the rate of inflation.
“I think on top of a 14% … increase last year on average, we are looking to get it below 6% and will be working with the governor and the House to try to determine what that number might be,” Baruth said.
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