Updated at 4:51 p.m.
Property taxes to fund education in Vermont are going up again, forecast to rise an average of 5.9 percent next year unless state leaders intervene during the upcoming legislative session.
The increase is on top of the 13.8 percent average increase in education property taxes that homeowners saw this year, which set off a political firestorm in Montpelier.
Tax Commissioner Craig Bolio released the latest forecast on Monday in something known as the “December 1 letter.” The annual memo is meant to give the governor and lawmakers a sense of likely tax rate increases absent policy changes. “I expect another projected increase will be difficult to hear,” Commissioner Bolio said in a press release accompanying the letter. “It’s important that we continue to work together to find solutions to make our education funding system sustainable.”
Bolio said the estimate reflects $115 million in higher education costs and does not include the $69 million lawmakers used last year to keep rates down. The estimate is based on data provided by the Agency of Education about preliminary local school budgets and assumes a variety of factors remain constant, such as the number of homeowners who qualify for property tax credits. Republican lawmakers, who won big on Election Day, said the letter confirmed their concerns about the state’s affordability.
“With an already high tax burden, the last thing Vermonters need is yet another property tax increase,” Gov. Phil Scott said in a statement.
He said he expected “many will claim victory” because the increase was limited to single digits. But the governor noted that the increase is just the latest across multiple years, compounding the pain.
The increases, Scott wrote, are a result of “unsustainable costs, an aging demographic, and smaller workforce.”
He urged lawmakers to work closely with his administration to reduce the tax burden further.
“This increase could have been substantially more – and still could be – so I want to thank school administrators and school boards who have made difficult decisions because I know it’s not easy,” Scott wrote.
In a statement, House Speaker Jill Krowinski (D-Burlington) said she was committed to reducing costs “while ensuring our kids have a great education.”
“We are prepared to explore new approaches and consider all options to make sure all of our children have the opportunities they deserve at a price taxpayers can afford,” she wrote. “We look forward to the Governor and his administration sharing their plans to achieve sustainability and reduce property taxes.”
Last year’s December 1 letter predicted an 18.5 percent increase, citing a number of increases in education spending, including soaring health insurance costs.
Scott seized on that letter as evidence that lawmakers hadn’t done enough to control spending. Democrats downplayed the letter as merely a forecast that could be reduced through legislative action and local budget votes.
Legislators ultimately wrestled the average increase down to 13.8 percent, in part by pumping tens of millions of dollars into the education fund to lower the amount needed to be raised by property taxes.
They also allowed school districts to delay votes or revote their school budgets to rein in costs. The process was tumultuous and left many voters angry. Republicans stoked this frustration and blamed Democrats for the cost increases. Voters rewarded them with a historic wins last month that ended the Democratic supermajority in Montpelier and restored something closer to balance in the legislature.
Republicans won 18 seats in the House and six in the Senate. The party said it will hold a press conference at the Statehouse on Wednesday to discuss legislative priorities and the December 1 letter.
In a statement, House and Senate Republican leadership said they are “resolved to do our part to ensure Vermont children receive an excellent education at a price Vermont taxpayers can afford.”
Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) has said he’s “deeply concerned” about another property tax increase. In a statement last week, Baruth committed to giving Scott’s team the entire first week of the session to present their plans for education finance reform.
“Vermonters need, want and deserve a thriving public education system as well as affordable and predictable property tax rates,” he said in the statement.
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