Massive Property Tax increase on the horizon – or reform the system

The Vermont Tax Commissioner published his forecast, as required by law, on December 1 regarding property tax rates for FY22. It’s not a pretty picture: an expected average 9.5% increase in Vermont homeowners’ property tax bills and a 10% increase for non-homestead properties. These increases will fund an estimated 3.79% overall increase in spending.

The reasons for the sharp increase are mostly Covid related: loss of sales and use, purchase and use, and rooms and meals tax revenues, all of which contribute in whole or in part to the Education Fund. When these revenue sources come up short, it falls on property taxpayers to make up the difference.  

Officials are quick to remind taxpayers that a similar forecast for FY2021 didn’t pan out, and the property tax rate increases actually implemented were modest. They hope for a similar result by the time they have to vote on the new rates next spring. However, the FY2021 rates were the result of pulling out all the stops with accounting gimmicks, utilizing federal relief funds where possible, and dipping into reserve funds. Barring a significant shift in federal relief fund policy funded by national debt (possible with a new administration), those options will not be available again.

While these increases are extreme due to the pandemic, they are part of a long-term trend of unsustainably high property taxes, growing every year, to fund ever higher school spending that serves fewer and fewer students. A federal bailout, should one occur, will not fix this dynamic for the long term, only enable it in the short term.

With or without out a federal bailout, Vermonters need to ask if it makes sense to pour more and more money into a clearly broken system. Many have observed that the pandemic “highlighted inequities” in the system, which even before the pandemic has a long record of failing low income and special needs students. While there are stories about children of Covid refugees filling or flooding the ranks of some Vermont schools, these numbers don’t come close to matching the over 2000 students who have left the Vermont public system in favor of homeschooling in the past year – a 100% increase in homeschooling.

Just as Covid accelerated trends in business for telecommuting and created new models for delivering services, many of which will outlast the pandemic because they deliver higher quality experiences at lower cost to both the business and consumer, how we educate our children should similarly evolve.

The key to succeeding in such a remodeling is to ensure that parents of low income and special needs students can access and control resources in ways their wealthier peers can through expanded school choice, education savings accounts, and allowing for the expansion of a variety of entrepreneurial education models designed to fit the needs of individual students.  

Teachers unions will no doubt fight such innovation tooth and nail. Vermonters need to ask if the system is for these adults or the kids.

- Rob Roper is president of the Ethan Allen Institute

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  • Victor Tirrito
    commented 2020-12-09 14:15:21 -0500
    You all in government suck big time. This is not the people’s fault. Try to cut spending, reduce taxes not raise them. Covid-19 was not our fault. We have paid our dues.
  • Gordon & Jan Payne
    commented 2020-12-08 13:22:34 -0500
    Property taxes unlike transactional taxes (income, excise) are takings of property. Beyond the disproportionality in ownership on a State wide level, exacerbated by graduated income calculations violative of equal protection in the application, the relative proportionality when limited to locality, if only from common use, is lost in the special appropriation, and there from citizens whose property is taken without any much less amorphous compensation. Time to get property taxes back under control where they belong, local not State, and particularly not in pursuit of now demonstrated etatist delusions of equality in educational outcome, and certainly contrary to the politicians’ promises of reductions, not additions, with Act 46, which was at least false, as all our bills now prove!
  • Patrick Finnie
    commented 2020-12-04 19:00:53 -0500
    How would you like to be a taxpayer who has never had kids, but has paid a life time worth of taxes to educate someone else’s little geniuses ? I guess it’s for the good of the collective ! Who says Socialism is not alive and well in the United States ?
  • Robert Roper
    published this page in EAI Blog 2020-12-04 08:23:39 -0500