State News

Education property tax increase likely to be smaller than projected

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Vermont taxpayers received some good news Tuesday with word that education property taxes are likely to rise by a smaller rate because of lower school spending.

In December, the state Tax Department and Agency of Education projected a 3.52 percent increase in school spending for fiscal year 2019. However, with 64 percent of districts reporting their budgets so far, it appears spending is going to rise by only 2.14 percent.

Tax Commissioner Kaj Samsom said if spending stays down as the rest of the budgets come in, taxes will only climb by 7 cents. “It is safe to say that looks like around a 2-cent decrease on the 9.4-cent projection,” he said.

At a hearing Tuesday on the preliminary budget spending projections, Education Finance Manager Brad James said spending in 112 of 176 school districts is down “significantly” from his earlier estimation. Although a number of large school districts — such as Burlington, Kingdom East and Brattleboro — have not submitted a budget, he does not expect the overall trend to change in a significant way.

“That can move and it will move, but which way and how much, I don’t know,” James said. “It will not get to 3.5 percent, I can safely say that.”

Current budgets show education spending to be at $949 million and $15,400 per equalized pupil — up just 1.32 percent. Those numbers are a lot lower compared to last year, with this same group of school districts reporting.

“At the moment things are going in the right direction,” James said.

A few years ago, James said, there were 280 school districts but consolidation has had an impact, the new districts generally spending less. At the same time, Universal Pre-K has increased student rolls, which also helps because taxes are based on per pupil spending.

Based on the government’s December projections, lawmakers have been trying to redesign the way the state pays for schools to try to mitigate a statewide 7 percent increase in both homestead and nonresidential property tax rates.

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