47 states limit property tax increases in some way. We don’t.
by Rob Roper
The massive property tax increase coming our way as the result of an education funding system gone out of wildly control poses the very real threat of forcing some – perhaps many – Vermonters out of their homes. It will certainly cause painful choices for household budgets, making it even harder make ends meet in the Green Mountain State. This is an unacceptable situation that needs to be fixed. It is time for Vermont to cap the level of property tax increase any individual homeowner must absorb year to year.
Perhaps the most famous property tax cap law is California’s Proposition 13, passed in 1978 that set a base assessment of a home’s value at what it was worth in 1975, capped any annual reassessment of that value at 2 percent until the time of ownership transfer when a new current fair market value would be applied, and capped property taxes at 1 percent of adjusted assessed value. Even in deep blue California, Prop 13 is still in place.
But California is not alone in figuring out some way of protecting its citizens from the kind of financial body blow Vermonters are bracing for today. Not by a long shot. In fact, out of the fifty states, forty-seven have some form of property tax protection for their homeowners. Only three do not and guess which camp Vermont is in!
Kiplinger Personal Finance did a breakdown of all fifty states’ property tax limitations, listing three categories of protections, explaining:
Each type of property tax cap can help prevent tax bills from spiking, but they are all very different.
- An assessment limit sets a cap for how much the assessed value of your property can increase from one period to the next. (For example, an assessment limit might not allow your home’s assessment to increase by more than 3%, even if the property’s market value increases by 20%.)
- A rate limit sets a cap for the rate at which a jurisdiction can tax your property. This limit can help keep your tax bill from increasing when there hasn’t been a change to your property’s assessment.
- A levy limit caps how much property tax revenue a government can collect. The levy limit refers to all revenue, not only the revenue from one property.
Twelve states utilize one of these tools, twenty-eight employ two, and seven have passed all three. Each state’s formula has its own nuances, of course, tailored to their own needs.
The two states other than Vermont that have no such property tax protections are New Hampshire, which relies on the property tax in exchange for (very much unlike Vermont) having no income or sales tax, and Tennessee, which doesn’t seem to need them. As Kiplinger explains, “Low property tax bills in Tennessee can result from a number of factors, such as property tax freezes and exemptions offered to eligible homeowners. Lower home values in the Volunteer State may also be a contributing factor.” The median property tax bill in Tennessee is $1,270.
So, rather than trying to “solve” Vermont’s property tax crisis by raising hundreds of millions in other taxes (see: “Solution” to high property taxes is… more higher taxes!), which is just a way of taking the same unaffordable amount of money from us, just out of different pockets, and hoping we don’t figure that out come election time, Vermont lawmakers should be looking at those other forty-seven states for ideas about how to protect us from, well, Vermont lawmakers and their insatiable appetite for our cash.
Of course, limiting the currently unregulated flow of property tax revenues into the State Education Fund will require lawmakers to reexamine our existing whakadoo education financing system – which is also something they should be doing in lieu of raising hundreds of millions in new taxes, which will only make the problem worse!
I’m not going to hold my breath, as I doubt I could so until November, when we hopefully elect a new crop of lawmakers willing to take this issue seriously. The group we have now isn’t interested.
Rob Roper is a freelance writer who has been involved with Vermont politics and policy for over 20 years. This article reprinted with permission from Behind the Lines: Rob Roper on Vermont Politics, robertroper.substack.com
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Categories: Commentary, State Government
It’s not the funding, it’s the spending. Although, the current funding system escalates the spending. We need to fix/limit per pupil spending/teacher&admin salaries/tax rates.
Dexter, Yes. Now VT citizens need and require the exact and verifiable across all media and district web sites and all State reports as to what is THE pupil count ( not A pupil count) IE how many real live students are being served. THE number further supports planning, for a trackable across time projection, as it follows the flow of each students natural advancement through the education system to arrive at graduation. A K student or 5000 such students are less costly than a or 5000 12th grade students. On this very day, sources show that the actual pupil nose count number drastically differs inside various state reports, web pages, recorded spoken words at district Board Meetings, and across other published public information sites. Therefore, obviously, it is more than likely that those perceivable variances amidst is an error inside the procedural system including calculations and communications. THE number ( not a number ) via actual nose count is required for accurately equating the cost per pupil including any adjustments with their impacts.
Re: “We need to fix/limit per pupil spending/teacher&admin salaries/tax rates.”
Of course this is true. But, as always, no explanation is provided on how that is to be accomplished, or who it is that determines how it’s accomplished.
This is exactly where we were 30 years ago. People were selling their homes and leaving the state because of the ever increasing property taxes. I remember it well, having attended many meetings discussing solutions for the unaffordability and the flawed system. Financing schools via an income tax was discussed but dropped. The legislature finally came up with Act 60 in response to Brigham vs the State of Vermont. It’s one of the first acts I recall based on “equity” although it wasn’t labelled so back then- DEI wasn’t a thing yet. But, at least communities were able to approve or disapprove the budget for the school in their town.
Part of the solution was the Homestead Exemption. However that has never been “fair or equitable” since the benefit for the current year’s property tax is based on the previous year’s income. And all it takes is the loss of a wage earner, death of a spouse, or addition of a child to throw off any benefit. And regarding spending, many developed a mind set about increased spending that said “we don’t have to worry about spending because the Homestead Exemption will compensate for any harm.”
In the interim, Act 60 has been tweaked a number of times and brought us full circle. Now instead of spending per actual numbers of pupil, we have manufactured imaginary pupils with a weighting scheme, we pay assessments to supervisory unions, and a formula for adjusting the tax rate that no one understands.
Perhaps keeping it simple is something the state should work on. Set a per pupil expenditure and cap increases to the property tax. Wages don’t go up 20 or 30 percent from year to year for most people, neither should taxes.
Re: “Financing schools via an income tax was discussed but dropped.”
Does it matter whether or not education is funded by a property tax or an income tax? Isn’t the problem the way the money is being spent, not from where it comes?
A $2.7 Billion public education monopoly is going to break the bank one way or the other until it runs out of other people’s money.
Can you devise a system in which the incentives are to spend less and get more?
Homeowners are the golden cow, Vermont liberal thinkers, those who can’t balance a checkbook, but you expect them to figure out an equitable way on the property tax rate or school funding……………. Home Owners, you are the golden cow, and they know
it !!
Wake up people
Limits (i.e., ‘caps’) become Extents. Be it a 2%, a 3%, a 5% or a 20% cap, whatever capped increase is imposed will always be an ‘increase’, and always be to the maximum allowed. There is no incentive to do otherwise.
A government regulated (i.e., controlled) education system is always corrupted by special interest conflicts of interest. It’s the nature of any monopoly and the reason we have anti-trust laws. It’s one thing to subsidize education. It’s another, entirely, to force taxpayers to subsidize a government-controlled monopoly that has an incentive to benefit itself, not the taxpayer.
I lay awake wondering how citizens voices can be heard, outside of elections. Could there be polls of all voters yearly, or ballot referendums employed to reach high visibility consensus on our citizens top priorities?
Mark, I’m there with you. Each village town city has its own operating and communications system and FB page and newspaper maybe and maybe not. One idea is send your suggestions and ask about the reach to Campaign For Vermont include how to produce your suggestions and look into their current petition hosted on their start page. I have no idea how well it is circulating or who they are reaching or who their targets are and who they are presenting the petition to when where how.
Bill Doyle our past Senator from Washington County, did an annual survey/poll of Vermonters concerns, this would come out before town meeting.
As long as most gullibly-liberal Vermont residents vote with a herd mentality, and maintain a supermajority of demo/progs, the legislature could not care less about our petty concerns. They dance only to the beat of publicly-funded special interests, the VTNEA being the most powerful. Vermont’s liberals are so pathetically into virtue signaling, they do it even in the privacy and anonymity of the voting booth.
when you socialists stop wanting some one else to pay for your children education this will end/// act 60 was the biggest con job pulled on vermonters/// vermont constitution declarations of rights/// no education/// no health care// they proposed an amendment to the constitution to make it a right/// it did not come out of committee/// now try paying 10,000.00 dollars per child per year///
Since I have relatives who live there, I’ll use Massachusetts as a teaching example. In 1980, Massachusetts passed Proposition 2 1/2, which (in theory) was supposed to cap year to year property tax increases at 2.5%. That sounded wonderful, EXCEPT IN PRACTICE, the local governments got around it by simply re-assessing property values every couple of years. ALSO, the local governments are required to put any large new project, such as building a new library, refurbishing a high school, etc up to a vote of the townspeople. If the voters reject it, it doesn’t get done. Sounds great! What’s wrong with that? What’s wrong is if a project that the wealthy, liberal know-it-alls want gets defeated by the voters, they can simply put the project up for vote again two months later. And two months after that, and two months after that, until they get voter approval for the project they want. In practice, the wealthy, liberal know-it-alls are the zealots, the fanatics. They turn out in force to vote no matter how many times their project has been rejected. (“It’ll be good for the town. You support your town, don’t you??? You just need more information. Blah, blah, blah!) Meanwhile, the deplorable working stiffs eventually get worn down by the constant voting, at which point enough of them drop out that the zealots get their way. The solution is easy. Simply limit how often a special spending (over-ride) project can be voted on to once every 12 months. But who’s the majority of the Selectboard? The same wealthy know-it-alls who have nothing better to do all day than tell the rest of the town how they should live. So nothing changes.
I wrote all of that as a means of exposing the dirty tricks some states and towns play. Before we go down that road in Vermont, we need to be very careful to eliminate any and all property tax reform loopholes. After all, we’re dealing with politicians. There are ALWAYS loopholes.
Re: “The solution is easy. Simply limit how often a special spending (over-ride) project can be voted on to once every 12 months.”
Please listen. I agree with your assessment of our current state of affairs. But if the ‘solution is easy’, please describe it in at least some detail. How do you propose to change the minds of a corrupt super-majority that can and is confiscating your property (your home and your savings) and indoctrinating your children?
I’ve raised this question four times now on this thread alone. And yet no one offers an answer… which should suggest what the answer actually is.
Profligate spending has an obvious consequence: high taxes. The two must be fixed at the same time. Politicians need to move on this issue or face being voted out of office. That includes the local school board members and the legislators.
Many taxpayers and voters have shown their sentiments in voting down school budgets. Acting responsibly is a matter of political prudence and survival.
Let’s imagine for a minute if Vermont’s Current Use program was eliminated.
Would the taxes go up, or down, upon owners of properties that don’t qualify for Current Use?
How would large land owners (that for now pay pennies on the dollar in property taxes) vote with regards to town spending?
Would the state need to collect money to subsidize the Current Use program?
If owners of large properties had to pay the going rate in property tax would there be more land available for people to purchase so that they could build a home?