It’s no secret that school property taxes are heading higher. In the Dec. 1 letter from the Tax Commissioner, they were estimated to go up by 18.5%, based on a 12% increase in school district spending. That number is now over 20% statewide as proposed spending is now up 14.8% on average.
Some of the blame for increases in budgets is being placed on Act 127, which the Legislature passed two years ago to change the pupil weighting formula. The legislation was intended to give more financial help to school districts that had non-English learners, lower income families and to more rural districts. As part of the legislation, a 5% cap in equalized homestead tax rates was included for the first five years of its implementation to help with any adverse impacts the change might have on district taxpayers.
Lawmakers now believe the cap is having unintended consequences as many districts are spending more with the residential rate being capped. At the end of the day, the state tax rates are set by dividing up the total school spending based on the new weighted per pupil spending in each district. If everyone spends more, then all taxpayers will pay more. And because we have a statewide equalized education formula for education property tax rates (Act 60 was instituted when the court ruled on the Brigham decision), the state rate is further adjusted by a town’s common level of appraisal (CLA). The CLA is designed to bring a property’s assessed value up to the market value. Any CLA lower than 100% increases the state rate that properties in a town pay.
In our district, all four towns are under that 100% level, due to the runup in property values in recent years. Killington is at 52.35%, Chittenden is at 76.44%, Pittsfield at 88.78% and Mendon at 89.77%. If a school district has an equalized homestead tax rate of $1.50, you can divide that by your town’s CLA rate to get your effective rate on your assessed home value. In Killington, for example, an equalized rate of $1.62 will translate into a tax rate of $3.09 per hundred on the town’s assessed value of your property.
5% to be eliminated?
Last week, the House Ways & Means Committee, which implements education funding taxes, took a straw poll among its members, and all agreed to eliminate the 5% cap this year. Assuming that decision is approved by the full Legislature, school budgets now being proposed to voters will have inaccurate projected tax impacts to homeowners, which will likely be even higher. Hearing the news last week, the Mountain Views School District (of which Killington is a part and which most of Pittsfield attends) quickly sent out an email to their seven towns asking them to hold off on printing and sending out the proposed budget pending an emergency school board meeting on Feb. 2. At that meeting we learned they cut $750,000 from their previous budget proposal.
Unless other schools issued a “stop the presses” call last week, their initial proposed budgets will now be on the ballot. It is every voters’ responsibility to learn more about their district’s proposed budget and what the impact might be on their tax rates.
Mountain Views District
Public Information Hearing
- Thursday, Feb. 29, 6:30 p.m.
- Woodstock Union Middle and High School (and Zoom link available at mtnviews.org)
Barstow Public Informational Meeting
- Tuesday, Feb. 27, 6:30 p.m.
- Barstow School, Chittenden (and Zoom link available at nesu.org)
Why the cost increase?
The change in pupil weighting is only one factor driving education spending. For the past two years the Legislature used surpluses in the education fund to pay for the new universal school meals program, which now must be paid for in tax rates. Declining enrollments statewide has led to smaller class sizes, which increases the per pupil costs, and there has been a reluctance to consolidate schools in many districts. Complicating things this year are the 16% increase in health insurance costs and in some cases, continuation of new temporary positions that were funded by federal grants during the pandemic. School construction costs are also impacting total spending coming out of the state education fund.
The Ways & Means Committee is also looking at a variety of new taxes to help cover some of the estimated $240 million increased spending, including a surcharge on higher incomes, an increase in the sales tax, a new excise tax on beverages, expanding the sales tax to more products, increasing the taxes on second homes and other non-residential property.
Scott has warned against shifting to new taxes, which he equates to just taking it out of another pocket.
A few other issues of interest:
House leaders appear to be poised to expand the taxpayer funded Medicaid program despite budget concerns raised by the governor. The legislation being reviewed in the House Health Care Committee would expand eligibility to individuals up to age 26 and pregnant women up to 312% of the federal poverty level (approximately $94,000 for family of four).
The co-chairs of a special impeachment committee investigating Sheriff Grismore of Franklin County announced they didn’t believe they had enough for an impeachable offense under the Vermont constitution.
A proposal to amend Vermont’s constitution to allow the Legislature to set qualifications for certain county elected offices, such as sheriff and state’s attorney, has stalled after the Senate didn’t appear to have the necessary 20 votes to advance the measure to the House.
The Scott administration has expressed concern over the House-passed budget adjustment bill because of a $30 million increase in spending over the governor’s proposal and an expansion of the hotel voucher program. Commonly referred to as the “Dear Jane” letter addressed to Senator Jane Kitchel, chair of the Senate Appropriations Committee, the administration outlined its objections to the House-passed bill and are now asking the Senate to make changes.
I’m sure there will be more to come on the education tax issue in the weeks to come, although until local school budgets pass or fail, it’s difficult to know what the total spending will look like to set state rates.
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.
