Lawmakers in the Vermont House advanced a tax bill Thursday that uses nearly $75 million in one-time money to bring down next year’s average projected property tax increase to 7%.
In December, the state’s tax department forecast that property taxes would spike by nearly 12%. School spending that communities approved at town meeting, however, ultimately came in roughly 2% lower than expected. And use of $75 million in surplus funds would further soften the blow — at least temporarily.
Artificially buying down property taxes with one-time money comes with the risk of creating a spike the following year. About half of the increase lawmakers are presently wrestling with was created by the $118 million they and Gov. Phil Scott applied in 2025 to keep this year’s taxes flat.
“I am tired of hearing us talk about how unstable the system is when we are the source of much of the instability,” Rep. Rebecca Holcombe, a Norwich Democrat, told her colleagues on the House Ways and Means Committee before voting no on the bill. It still advanced, albeit narrowly, on a 6-5 vote.
Rep. Emilie Kornheiser, a Brattleboro Democrat who chairs the tax-writing committee, acknowledged the practice isn’t ideal. But Vermonters, she said, need relief now.
“Of course sustainable revenue is always a better path to balance budgets, but that’s not always available,” she said.
In part to deal with next year’s likely spike, the tax bill that now heads to the floor of the House would hold about $52 million in reserves, to be applied next year.
The bill still has a long way to go. And Scott, a Republican, has made clear he’ll pressure legislative Democrats to buy down the rate much more aggressively.
Using the additional $52 million this year, as he has suggested, would bring the increase down to about 4%.
“Yesterday, a House Committee voted to advance an average 7% property tax hike on Vermonters,” the governor wrote Friday in a statement on X. “Vermonters can’t afford it, and I will not accept it.”
