Tax letter ‘just a starting place,’ JFO officer cautions
By Guy Page
A day before the Legislature’s Friday, November 30 review of the state’s economic forecast, the Scott administration dropped a bombshell press release: property taxes are likely to increase almost 20% next year due to increased education costs.
Commissioner of Taxes Craig Bolio today released the December 1 education tax rate letter which forecasts the education tax yields for resident homeowners and the non-homestead tax rate for the upcoming fiscal year (FY) 2025. This letter is based on specific calculations outlined in State law and is a result of collaboration by the Department of Taxes, Agency of Education, Department of Finance and Management, and Joint Fiscal Office.
This year’s letter projects property tax bills to increase by an average of 18.5 percent next fiscal year, driven largely by a forecasted 12 percent increase in year-over-year education spending, Bolio said. In addition, many districts are seeing changes in pupil counts due to implementation of the new pupil weights from Act 127 of 2022. Changes in pupil counts affect education tax rates, which are based on per pupil spending.
“I understand that this will not be welcome news for Vermonters,” said Commissioner Bolio, “This forecast predicts an unprecedented property tax increase next year, with very real financial impacts at a time Vermonters are already struggling to pay for housing.”
Deputy Fiscal Officer Emily Byrne of the Joint Fiscal Office cautioned that the “tax letter is just a starting place” for school funding next year. Speaking to the Legislature today at the annual economic/fiscal preview, Byrne said work done by the Legislature next year and voters’ decisions at Town Meeting will affect the final school tax rate.
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Scott’s office released the following statement:
“Vermont’s tax burden is already, unfortunately, among the highest in the country, and families are bearing an incredible burden with increased costs of living across the board, including new and higher taxes and fees imposed by the Legislature. Put simply, a nearly 20% property tax increase would hurt Vermonters and our economy, and we cannot let it happen.
“At a time when housing costs and interest rates are elevated, higher property taxes will make our housing and workforce crises worse, and I sincerely hope the Legislature agrees.
“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.
“We have proven when we work together, we can make historic and impactful investments that produce positive results for our communities, without adding more financial burdens on residents. We can do that again, but it will require more than better budgeting in Montpelier. School boards, who already have a difficult job, will need to do all they can to contain spending to a rate that taxpayers can afford.
“Together, we can, and must, prevent this untenable tax increase, or anything close to it, from coming to pass.”
Much of the content of this news article was sourced from administration statements.