It’s been known since December that there is a $65 million education fund surplus, with property taxes slated to rise despite this surplus.
The Governor wants to use that surplus to buy down property tax. A Democratic plan is not readily apparent. However, last year, there were a number of their own tax breaks the party looked to direct this surplus to fund. Ultimately, a balance was struck, which can be read here.
This week, legislators heard from the Department of Taxes that roughly two-thirds of towns have properties that are undervalued by the state’s metric, the Common Level of Appraisal, or CLA. This is due to the flurry of activity we’ve seen in the last three years in the real estate market, which pushed up property values.
A statewide CLA could mean increased property taxes for some if – and this is the linchpin here – the state could find the human capacity to perform the CLA in this labor market.
Also this week, the Ways and Means Committee heard from the Tax Payer Advocate and others that the state’s property tax system is overly complicated and that households have trouble navigating our state’s property tax credits. The sentiment was echoed by a senior Senator that same day who remarked that Vermont “fails on all accounts” when it comes to having a simple tax system.
Added onto all of these variables, work done last year on the formula per-pupil education spending, will have a large reshuffling effect that will certainly have some winners and losers. – Lake Champlain Chamber
Finally, an off-session study committee tasked with researching the prospect of moving education funding from a residential property tax to a statewide income tax delivered their final report. The conclusion, “[i]t is challenging to make definitive recommendations regarding a theoretical tax structure that is without precedent in any other state” and “[a] change of this magnitude and complexity should be approached with great caution.”