What a roller coaster Vermont taxpayers are on.
The Campaign for Vermont reports that just over a week ago the Administration was happy to report that consumption tax revenues were coming in stronger than expected, downgrading the looming property tax increase to 17.3%. But this week the Agency of Education received a large number of big budgets that school boards were planning to warn on town meeting day.
The budgets are up. They are up a lot. Thanks to Act 127 language that (unintentionally, lawmakers are assuring the public and administration) incentivizes school districts to increase spending without tax penalties in some situations, over $216M in new spending is on tap for FY2025 – a 14.3% increase over last year and higher than the Agency of Education originally predicted.
This will drive property tax bills up to 20.56% next year. To be clear, the only policy levers the Legislature actually has to address this is to force school districts to control spending. They are already looking to add new revenues for this year – such as a Wealth Tax on some unrealized capital gains – but that will only redistribute the burden of a quarter billion dollar increase in spending.
Phil Dodd, reporter for the Montpelier Bridge, says legislative leaders are considering doing away with Act 127’s 5% equalized tax rate cap, a complicated formula meant to protect districts from huge tax increases but which, in practice, is incentivizing across-the-board increased spending.
If the Legislature takes this (or other) steps to avoid the likely Town Meeting descent from the precipice, it also may allow school districts to tear up existing school budget proposals, write new ones, and rewarn them for a yet-to-be scheduled annual school meeting.
“As a result of the expected changes, school boards may be given the option of revising their budgets and warning another district budget vote, according to Rep. Peter Conlon (D-Cornwall), chair of the House Education Committee,” Dodd reports in a recent issue of the Montpelier community newspaper.
House Education will continue to grapple with the problem at 1:15 pm Tuesday.
Based on reports from the Campaign for Vermont and the Montpelier Bridge.