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by Gerry Silverstein
Disclaimer: I think my analysis of my property tax bill and buy down revenue distribution is correct but, being human, I could be wrong. Education tax financing in Vermont is fiendishly complex.
A CPA with an MBA from an Ivy League school and 40 years experience was present at a seminar I attended years ago on education financing in Vermont. After the presentation he said in all his years as an accountant he had never seen a more complicated and convoluted taxation program. Amen to that.
The buy down:
The state took $77 million dollars from the General Fund, and added it to $41 million dollars of surplus dollars in the Education Fund, to generate $118 million dollars to be used to reduce the economic pain associated with increases in FY26 property tax bills due to increases in education tax assessments.
The oft quoted statistic by the state was an expected tax bill increase of 5-6% would be reduced to a 1% increase.
I expected my South Burlington (SB) property tax bill in FY26, based upon the voter-approved budget, to show a 7.93% increase in total education taxes (compared to FY25).
In reality the increase was 7.64%. In terms of actual dollars, I saved $16 on an expected increase of $440 dollars.
The $16 reduction “helped” reduce the pain of my total property tax bill that was a little over $8,000.
I should mention that my house has an assessed value of $380,100 which is 13% LESS than the average single-family home in South Burlington.
I went to Vermont Fiscal Facts (2025) and found that 55% of funds in the General Fund (GF) came from resident income tax payments.
Total income tax revenue in the GF (January 2025 projection) was $1.3335 billion dollars.
Since $77 million dollars of the buy down funds came from the GF, that means $42,350,000 (55% of $77 million dollars) of Vermont income tax payments were used in the buy down of FY26 property taxes statewide.
$42,350,000 was 3.18% of all state income taxes in the GF at the time of the buy down.
Of my 2024 income tax payments $63 (3.18% of my income taxes) was used by the state to reduce the pain of the FY26 increase in property tax payments statewide.
Note that as a senior citizen the State grants me the privilege of paying income tax (above a threshold of income) on my social security income.
Vermont likes to stand out among its 49 sister states. In the case of taxing social security income Vermont once again shares the victory platform with 8 other states (in 2026 that number will drop to 7).
In summary, to receive my $16 reduction in property taxes the state used $63 of my income taxes to buy down property taxes statewide.
Moreover this analysis does not include my “contributions” to the Education Fund which had a $41 million dollar surplus that was also used in the buy down.
I have reached out to different branches of state government multiple times asking how buy down determinations were made.
The most recent answer was from the Vermont Dept. of Taxes:
“There are many variables and inputs that go into each property tax bill. More information is available at Education Tax Rate Calculations | Frequently Asked Questions | Department of Taxes.”
I have studied education financing in Vermont for 20 years and, in my assessment, that response from state government provides no clarity whatsoever on what I (and I presume many other residents) received in buy down dollars to help reduce the economic pain associated with FY26 property tax bills.
Low income and low middle income individuals benefit from income sensitivity where the state covers the cost of part of a homestead’s education tax bill. These individuals likely benefited significantly from the buy down, on top of the benefit they already receive from income sensitivity distributions.
For most high income individuals (of which there are quite a few in Vermont) property tax bills are probably unpleasant but they probably do not keep people up at night wondering how they are going to pay their installments.
And then of course there is the hapless middle class. As far as I can tell they continue to get walloped with out-of-control property tax bills.
As a percent of income Vermont has the highest property tax bills of all 50 states, and 75% of tax payments are for public school education in Vermont.
The mega-education tax assessments are needed to support the second highest spending per pupil of all 50 states.
In spite of a massive investment on public school education in Vermont, on 2024 national standardized exams (NAEP, “Nation’s Report Card) in 4th and 8th grade math and reading, Vermont students ranked #34, 18, 32, and 24 respectively compared to the 49 other states.
On in-state 2024 standardized tests (VT-CAP) assessing reading and math proficiency at grade level 9, the highest grade tested, 52% and 60% of Vermont students statewide scored below proficient.
In that same year 53-58% of Vermont students scored below proficient on VT-CAP tests in 5th, 8th, and 11th grade science.
Reflecting on (1) Vermont student academic proficiency scores on standardized tests and (2) the state’s concern for economically crushing high property taxes, what do I think of the FY26 property tax buy down, especially its impact on hapless middle class Vermonters?
Adopting the words of former Gov. Peter Shumlin, the buy down was a big Nothing Burger! Some might even call it a whopper of a Nothing Burger!
Addendum: In South Burlington where I reside mostly brand new members of the School Board are considering a number of spending options for FY27; one option is an increase of 6-7%. If the latter increase occurred every year for 15 years (2 pre-K and K-12) the cost to educate one student in SB would be ~$700,000 (LOL).
Gerry Silverstein taught at UVM from 1985-2007 and remains active sharing knowledge and challenging all learners to master the skills of critical thinking and critical decision making.
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Categories: Opinion
Yea, you may be “LOL”, but the reality of this rape of the taxpayers of the SOV ls nothing to laugh about. I can’t tll you how many native born Vermonters that I personally know who have been forced to moved out of state because they just can’t afford to live here, prompting the question, is that the plan ?
Patrick; not only does Silverstein’s missive understate the projected cost per student, his missive is tantamount to his telling us how hilarious it was when the guy hijacking his car on Church Street told him a joke to make him feel calm, and, mid-theft, forgot the joke’s punchline. Can you believe it?! The thief forgot the punch line to his own joke (LOL).
Re: “If the latter increase occurred every year for 15 years (2 pre-K and K-12) the cost to educate one student in SB would be ~$700,000 (LOL)”
Don’t laugh. Silverstein’s more than $700,000 projected per student costs are not an exaggeration. School budgets have been increasing at this rate for the last 15 years. That’s how we got here.
From the Vermont Agency of Education FY25 Budget Book:
“The Agency (VT Agency of Education) provides critical leadership, support, and oversight to a $2.7 billion education system”… (up from $2.56 billion), serving a “TOTAL 80,284 students (decrease from 80,509).”
Keep in mind too that almost 8 thousand of those students are Pre-K (3, 4 and 5 year-old) part-time students.
In fact, according to the 2025 report, there are only 72,093 K through 12th grade students being served – (down from 72,747). So, if we divide the operating budget of $2.7 billion by 72,093 K through 12th grade students, that’s approximately $37,451 per student.
Robbery by Spreadsheet: If these trends continue on a straight line, and the education budget increases 5.5% annually, while enrollments decline 1% annually, in 15 years Vermont will have only 19,252 K through 12th grade students left, costing $2.9 million per student each year.
Are these absurd trends going to continue? Of course not. But you can see why districts like Winooski are locked in to serving English Language Learner immigrant students. Whatever it takes to keep enrollments up and justify the search for revenue sources.
But the bubble is already bursting. Despite Act 73 (if not as a direct result of it) the Vermont Agency of Education (if not the entire State of Vermont) will be insolvent before Act 73 is implemented. It’s going to take draconian changes to the current system and I’ve seen nothing from anyone in State government even recognizing this impending bankruptcy let alone mitigating it. So go ahead, Governor (et al), check our numbers.
Then we’ll see who’s LOL.
Hmmm. Did anyone care to check my numbers? Apparently not. I suspect everyone is numb to this continued discussion.
Re: “Robbery by Spreadsheet: If these trends continue on a straight line, and the education budget increases 5.5% annually, while enrollments decline 1% annually, in 15 years Vermont will have only 19,252 K through 12th grade students left, costing $2.9 million per student each year.”
My algorithm projecting enrollment decline was overstated. A 1% enrollment decrease each year, from the current 72,093 for 15 years, results in a total of 63,526 students in the 15th year, not 19,252 students… which equates to an annual projected cost per student of $94,885.
I’m not sure how Mr. Silverstein arrived at his conclusions. $700,000 per student seems a bit high, especially by my corrected calculations. Nonetheless, if the current trend continues, this is what Vermont will experience. Fifteen years from now property taxes will increase 223% from where they are today. Key word…. ‘unsustainable’.
@H. Jay Eshelman … Your corrected projection for student population looks better.
Also, I suspect the original author’s number of $700,000 per student refers to the 12 + 1 years of education. So using your corrected future budget and population we have 13 years x $94,855 / student-year = $1,233,115 per student. Using today’s numbers gives us 13 years x $37,451 / year = $486,863 to educate each person from K through 12.
It is not surprising that the education department is pushing Equity ideology which is none other than the normalization of social classes and slavery: they want to make sure the next generation will comply with their masters and pay up without questioning.
I have always felt that the Vermont tax formulas have been kept as convoluted as possible for a number of reasons. My favorite being that no one knows how to decipher it and since the “powers that be” have no idea how it works, they cannot fix what is wrong. No ones wants to admit that so they just keep adding to it and making it worse. And it does get worse..every year. I have always wondered how the school taxes increase by so much when we are supposed to have all kinds of money, from multiple sources, being funneled into the black hole. Lottery profits, school/property taxes, a portion of the sales & use tax and, if my research is correct, even a portion of medicaid reimbursements. And for some reason I thought that a portion of the tax from marijuana sales also contributed but I could be totally wrong on that one. Jeeze Louise, that’s gotta be a lot of money headed into that pit. And wasn’t I surprised to find out that there is a surplus of money in the Education Fund? I would have never believed that considering how education is always made out to be in some big financial emergency. And, I don’t know about you, but to me, a surplus equals over taxation. Especially if you have enough of a surplus that you can take 41 million out of it on a whim. So how much is actually in that account and how about giving some of it back? Maybe because no one has the answers, they can’t refund any. No one knows where all the money is going because no one knows how the “formulas” actually work and, I fear, because no one actually wants to admit it. So we pay….because it’s easier to tax us than fix the mess. So, like many of your friends Mr. Silverstein, I’m joining that exodus. I’m a senior and the cost of the beautiful scenery has become than I can pay. And I am right there wondering the same thing Mr. Finnie…. This comment is only my opinion of course.
#802taxedtodeath