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A message from Representative Carl Demrow

I am writing because I’ve heard from a number of folks who are concerned that education property taxes are going up 14% as a result of the legislature’s override of Governor Scott’s veto of H. 887, the yield bill.  Education property taxes in Washington are not going up 14%.

The homestead education property tax rate for Washington is going up one cent.  It is less than a 1% increase over last year’s rate.  

The reason for this is two fold:  Your Echo Valley School board works to keep spending low and  in 2022 the legislature changed pupil weighting,  which drastically decreased spending per equalized pupil at Echo Valley.

Vermonters are understandably concerned about property taxes. This was a THE issue at the State House this year. School funding in Vermont is complicated. It’s a mix of local control and legislative action. Each year, school districts make budgets and bring them to the voters for approval. This is the “local control” part: school spending is decided by school boards and voters in each district. 

This year, school boards faced a “perfect storm” of rising costs. These included healthcare premiums going up 16%, the end of federal COVID money for schools, big student needs (like mental health services after the pandemic), the cost to fix and maintain Vermont’s old school buildings, inflation, and more. Because of this, school budgets went up across the state, and so did property taxes. 

After local voters approve budgets in March, it is the legislature’s job to pay the bill by setting what is called the yield. Per pupil spending divided by the yield gives you a town’s property tax rate.

This year, the legislature worked hard to find ways to cover that cost while trying to lower property tax rates. At one point in December, it looked like property taxes would go up by more than 20% on average. By using every responsible option, the legislature brought that average increase down to just under 14%.  Again, a less than 1% increase in Washington.  The legislature did this by using extra tax revenue we didn’t expect, adding a one-time transfer to the Education Fund from the state’s General Fund, and raising taxes a bit on cloud software and short-term rental bookings (paid by visitors, not hosts). Together, this added about $96 million in “other” revenue to the Education Fund. We also added extra help in the form of an expanded property tax credit for the 66 percent of Vermonters who pay their property/school taxes based on household income. 

Governor Scott had some last-minute ideas, like borrowing money to lower this year’s property tax rates, ending school meal programs, and using up all of our Education Fund reserves. These ideas would have created a bigger problem next year. This is money taxpayers would have to pay back, making bills higher in the future. Even though the need is immediate, it just isn’t responsible. And if we did not vote to override a veto and pass a yield bill, taxes would have gone up more than 20% statewide. We can’t have that.

I am happy to talk to any constituent about how we pay for our schools in Vermont and how it is connected to property taxes. Vermont has a very complicated education funding system, and we need to be willing to change it next year. In H.887, we also set up a “blue ribbon” commission to hold hearings in every county and bring an action plan to the legislature on cost savings and financial changes.   My baseline is that our education finance system needs to be affordable, understandable, and fair to rural communities like ours.

I totally agree that Vermonters can’t afford rising taxes like this. I pay these taxes too. But I think most of us support our schools and are willing to vote for responsible budgets that give our teachers, students, and families the resources they need. The hard part is balancing the two, and H.887 does that for the next fiscal year.

Carl Demrow
State Representative, Orange 1
House Ways and Means Committee

PO Box 531
Corinth, VT 05039