by Rep. Mike Tagliavia, Orange-1
Just before the Legislature adjourned for Town Meeting Week, the midpoint of the legislative session, Rep. Gina Galfetti presented a bill to the Ways and Means Committee calling for a three year property tax freeze. She did so because I, along with my Republican colleagues who co sponsored H.774, understand something many Vermonters have been saying for years: property taxpayers can’t take much more. Household budgets are being pushed to the breaking point by increases that far outpace inflation.
The three-year timeframe proposed in the bill is intended to give property taxpayers a deserved break while the Legislature works toward a long-term solution for how we fund public education, and how much we can realistically afford to spend.
Our current system has several major flaws. First, nobody knows what their property tax bill will be when they vote on their local school budgets. Second, Vermont’s “vote local, pay statewide” structure creates a perverse incentive to spend more, because the full cost of that spending is spread across taxpayers statewide. And finally, there is little clear accountability for the end result. When the system predictably fails to control costs, it is the property taxpayer who is punished.
H.774 was designed to address this problem in the short term with a straightforward freeze. In the long term, however, Vermont must end the property tax’s role as the revenue source of last resort for covering education spending.
Today, the Education Fund already captures a large share of statewide taxes: all of the 6 percent sales tax, one-third of the vehicle purchase and use tax, one-quarter of the 9 percent rooms and meals tax, 100 percent of state lottery revenue, and the 3 percent surcharge on short-term rentals, among other sources. Yet even with all of this revenue, it still falls short of covering the total cost of K–12 education.
When that happens, the difference is automatically made up through the property tax, no matter how large the gap becomes, and regardless of whether taxpayers can afford it. This has been happening year after year for more than a decade.
The core idea behind H.774 is simple: set the statewide property tax contribution to the Education Fund at a fixed amount. This would give taxpayers a predictable and more affordable property tax bill and prevent the massive year-over-year spikes Vermonters have recently experienced, such as the 14 percent average increase in 2024 and the roughly 12 percent increase expected this year.
In H.774, if a revenue shortfall results, the responsibility for addressing it would shift to the General Fund. Some legislators have criticized this idea because it would force difficult choices in the state budget. Lawmakers will have to reduce other General Fund spending or raise new revenue to meet education costs. But that is precisely the point. For the past two and a half decades, the Legislature has effectively forced property taxpayers to absorb these shortfalls themselves, often with little warning and no ability to plan ahead.
If accountability matters, then it is time for the Legislature to make some difficult decisions.
H.774 was never intended to be a perfect or final solution. It was introduced as a conversation starter, an effort to push the Legislature toward serious education finance reform and meaningful property tax relief.
Vermont is one of only three states with no safety-valve restrictions on how much a property tax bill can increase in a given year. In the months ahead, the Legislature should examine how the other 47 states manage this issue, identify policies that could work here, and adapt them to Vermont’s unique circumstances.
Property taxpayers deserve both immediate relief and long-term predictability.
That is the message I heard clearly from voters in November 2024, and I want Vermonters to know that some of us are still listening.