On December 6, 2023

‘Not acceptable’

 

That was how Governor Scott responded to the Nov. 30 letter from the Tax Commissioner, which projected an 18.5% increase in the average statewide education property tax rate for next year. The annual letter, required by law, bases the increase on an estimated 12% hike in school budgets and revenue forecasts for the state’s Education Fund. 

The letter is used by school districts to project local tax rates as they develop their budgets.

The 12% number comes from a survey of school district budget writers but does not necessarily reflect what voters will approve of in March. That will be the number that counts. It is driven in part by a 16% increase in health care, negotiated contract increases, loss of pandemic era federal funds, universal school meals and other inflationary pressures. It is important to note that property taxes represent two-thirds of the Ed Fund revenues (non-homestead 36%, homestead 30%). The sales tax accounts for 27% of the fund revenues and 7% comes from other state taxes. If the sales tax and other revenues do not go up at the same rate as overall budgets, then the burden falls to the property tax to make up the difference.

The legislature will not set the overall state tax rate until the spring after there is a clearer picture of what the approved school budgets will total. In the meantime, there will no doubt be significant scrutiny by local school boards preparing their respective school spending plans.

The governor went on to say, “For years, I have warned that Vermont is unaffordable for too many families and small businesses. This is why for seven years I focused on holding the line on higher taxes and fees, while offering solutions to reduce the tax burden on Vermonters. And for six out of the seven years, we were successful in preventing new taxes and fees. 

“We should all agree it is time for us to take our affordability crisis seriously…”

Scott’s reference to six out of seven years no doubt reflects several legislature veto overrides this past spring on bills that included new taxes, fees and energy standards.

Other key issues expected
in the upcoming session:

Public Safety concerns will receive a great deal of attention given increasing crime throughout Vermont. The House Speaker has signaled support for changing retail theft laws, while the Governor is expected to unveil a host of public safety proposals.

The shortage of housing options will continue to be a priority for State House leaders and the Governor. With a somewhat limited capacity to add more state dollars for housing projects, there could be renewed interest in exploring regulatory changes or other incentives to spur more development.

There will likely be a review of options to curtail the increasing drug usage, which has led to increased crime and overdoses.

Proponents of paid family leave, which passed the House last session, will be lobbying the Senate to pass the new benefit program. The Governor opposes the new payroll tax, that is included in the bill, to fund the 12-week leave.

There will be considerable discussion of how to best rebuild following the summer flooding and how to pay for it.

Softening state revenues and the ending of pandemic era federal funding may mean force tough choices for the House and Senate budget committees. The Administration has already made it clear they will oppose new taxes to pay for ongoing spending. Meanwhile, some advocacy groups are promoting new taxes on higher income families. 

Stay tuned for further updates when the legislature returns to Montpelier on Jan. 3 for the 2024 session.

In closing I want to congratulate Mike Solimano and his team at the Killington Resort for their excellent job hosting the Women’s World Cup event over Thanksgiving weekend. It was truly a world class event!

Best wishes to all this holiday season!

Jim Harrison is the state representative for Chittenden, Killington, Mendon and Pittsfield. He can be reached at: JHarrison@leg.state.vt.us or harrisonforvermont.com.

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