Republican Gov. Phil Scott says he wants to prevent Vermonters from seeing any increase in their property tax bills next year.
A forecast published this week by the Vermont Department of Taxes projects a 5.9% jump in property taxes next year.
Democratic and Republican lawmakers have signaled an interest getting that increase down to 3%. But at his weekly press briefing on Wednesday, Scott said he is working to put forward a proposal that would keep property tax bills flat in 2025.
“I don’t want to get ahead of ourselves, but we want to do everything we can to hold taxpayers harmless, so that’s our goal,” he said.
Elected officials have two basic mechanisms to reduce next year’s rate of increase: They can reduce the amount of education spending, or they can tap other revenues to fill holes in the education fund.
My concern is that as soon as we put ideas on the table, people might get concerned and nervous and step away. And my message here is that we have to stay at the table.House Speaker Jill Krowinski
The practice of “buying down” rates to deliver short-term tax relief isn’t uncommon in Montpelier. During the last legislative session, elected officials used $69 million in one-time money to prevent this year’s 14% increase in property taxes increase from being even higher than it was.
More from Vermont Public: How does Vermont pay for schools? A video explainer and glossary of terms
But Democrats, including Senate President Pro Tem Phil Baruth, say those sorts of short-term reprieves can lead to longer-term revenue shortfalls.
“There are follow-on consequences whenever we buy the rate down,” Baruth said.
There aren’t many short-term legislative interventions that would reduce education costs in time to relieve pressure on next year’s tax bills. One possibility, previously proposed by Scott, is eliminating Vermont’s universal free school meals program, which would shave about $25 million annually from education costs and bring rates down by about 2%.
School districts could also help lower next year’s taxes by making cuts to the preliminary budget figures they submitted to the Agency of Education last month.
Asked what he thinks would be an acceptable tax increase next year, Baruth said, “I don’t want to be quoted as saying that any increase is acceptable.”
“I would prefer if there were a decrease,” he said. “With that said, it used to be that the rate of inflation, say 3%, was what we were hoping to see, at the highest. And given that the governor brings his [state] budget in around 3%, I don’t think that’s a bad thing to be thinking about.”
House Minority Leader Pattie McCoy set similar expectations during a press conference on Wednesday. She said property taxes historically have increased annually at a rate of about 3%, “which is kind of cost of living, so that’s acceptable.”
The debate over where to set next year’s property tax rates will be a precursor to a larger conversation next year over how to contain costs in the education system over the long term.
Scott said this week that he won’t unveil his proposals until after he delivers his budget address in January. A special commission created by lawmakers earlier this year, meanwhile, will deliver a suite of possible reforms to the Legislature in late December.
House Speaker Jill Krowinski said this week she’s committed to “transforming our public education system and how we fund it.”
“It’s just going to be this really tough discussion,” she said. “And my concern is that as soon as we put ideas on the table, people might get concerned and nervous and step away. And my message here is that we have to stay at the table. And there are going to be things that none of us like, but this is our moment.”
Scott also said Vermont is at a pivotal juncture.
“I don’t want to sugarcoat this,” he said. “This is going to be difficult work, difficult for all of us.”
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