Vermont’s growing education tax rate has been making the news lately.
But as town meeting season approaches, some municipalities are also facing steep tax increases that could drive up property taxes even more.
Select boards and city councils are just starting to work on the budgets that voters will be asked to approve on Town Meeting Day in March.
And for some towns, it will be hard to avoid laying off staff as taxpayers are saying they are at their breaking point in what they can afford.
In Montpelier, the city set up an online survey to gather input from residents as the city council is considering a municipal budget that would increase the tax rate by 24%.
“People definitely acknowledge that we’ve got to have some significant change in this budget,” said Montpelier City Council Member Tim Heney. “And it’s likely we’re going to have to look at some staff cuts, and some reorganization of our departments and systems.”
Municipal taxes make up about a quarter of an average property tax bill, with education spending taking up the rest.
People definitely acknowledge that we’ve got to have some significant change in this budget. And it’s likely we’re going to have to look at some staff cuts, and some reorganization of our departments and systems.Tim Heney, Montpelier City Council
Municipalities like Montpelier are facing many of the same cost pressures of school districts, which include double-digit health insurance increases, staffing costs driven up by a tight labor market, and inflation.
And Montpelier is also dealing with the ongoing cleanup efforts from the flooding last year.
Heney said the city council got its first look at the budget recently, and while it remains to be seen how exactly the council can control spending, it’s clear that this is not business as usual.
“Even if it’s not 24%, even if it’s 10, or 12 or 14, that’s still too much,” he said. “We have a pretty high overhead for a town of 8,000. Our city manager has an admin assistant. We have a communications person. We have a sustainability coordinator. We’ve just built layers of people. I think some of the services we have now are probably more fitting of a much larger community, and those are things we’re going to have to talk about.”
Municipalities across Vermont are also contending with a steep and sudden drop-off in the COVID-era federal assistance that runs out at the end of 2024, according to Vermont League of Cities and Towns Executive Director Ted Brady.
Programs have been started. Staff have been hired. And the hundreds of millions of federal dollars that fueled those programs are now gone, leaving only the taxpayers to make up the difference.
“The thing that makes this year different is that we have been living on an influx of federal funding that we hadn’t seen in 40 or 50 years,” Brady said. “It’s why the state budget looks difficult. It’s why the education fund looks difficult. And it’s why municipal budgets look difficult.”
Brady said larger municipalities with police and fire departments will have a much harder time controlling costs this year.
It’s costing a lot more to retain and attract a police officer. It’s costing a lot more to retain and attract a road crew member. Go down the list. For every job, you have to offer more money and better benefits. And so those are some real pressures.Ted Brady, Vermont League of Cities and Towns
The increase in municipal wages statewide came in more than three times what VLCT estimated.
And while smaller towns may not be looking at the same double-digit tax increases in fiscal year 2026, Brady said with so many communities already stretched to their limits with education property tax increases, municipalities this year are feeling the pressure to keep their budgets in check.
“It’s costing a lot more to retain and attract a police officer. It’s costing a lot more to retain and attract a road crew member. Go down the list. For every job, you have to offer more money and better benefits. And so those are some real pressures,” Brady said. “Every municipality in the state received an influx of federal money recently, and that federal influx is starting to taper off.”
In Brattleboro, the preliminary budget came in with a 22% increase to taxpayers.
The town held a public forum recently to get the public involved with the budget process, and the select board has now asked the department heads to come back with budgets with 5% to 10% reductions.
“A 22% increase in property taxes is extremely high, and very hard to swallow, and for many people really, really concerning,” Brattleboro Select Board Chair Daniel Quipp said at a recent meeting. “I think the work that we’re asking town staff to do is extremely difficult, and will be very challenging, and, if I’m being honest, will be demoralizing. And when it comes back to us we will need to be doing some very hard work about deciding what is OK.”
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