When school budgets are passed at the local level, all those costs are added up and presented to the Legislature for funding.  The Vermont Joint Fiscal Office then applies a formula to come up with the funding through what is known as the statewide Yield Tax. The yield set for the 2024-2025 season in income dollar equivalent is $10,060. This fully funds the school budgets that voters have approved all across the state.

This year, the locally-voted school budgets came in much higher than usual. This is due to several reasons: increases in staff health care costs and salaries, but most notably because there were millions of federal Covid relief dollars available to Vermont (and our schools) for the past several years which has “artificially” lowered what would have been assessed in school taxes. As your local representative, I want you to know that the bill I voted for significantly reduced the expected tax rates in a realistic and responsible way, while also making a concrete action plan for the future.

This year, the legislature worked very hard to figure out ways to cover the voter-approved school budgets while still trying to bring down property taxes as much as possible. At one point in December, based on early budget information from local districts, it looked like property taxes would go up more than 30 percent on average to fund Vermont’s school budgets. By making fiscally tough decisions in other areas, we were able to bring that average down to a 13.8%. We did this by using unexpected excess tax revenue, by adding a one-time transfer to the Education Fund from the State’s General Fund, and by raising taxes on cloud software and short-term rental bookings (paid by visitors, not by hosts). All of this, together, added about $96 million in “other” revenue to the Education Fund and allowed us to reduce property taxes as much as possible.    

We added, $20.6 million to the Income Sensitivity Program (Vermont Property Tax Rebate) for the 66% of Vermonters who pay their property/school taxes based upon household income. This will help those on Social Security and Low-Income Vermonters.

   Five days before the veto session the Governor’s staff put forward a similar proposal to the one, he proposed in early May. The Governor’s re-worked proposal was previously shot down by the State Treasurer, Mike Pieciak because the financial experts said the plan would risk the State’s bond rating and cost more in the long run.

Some of the Governor’s ideas included buying down property taxes based upon using $20 million in State General Fund surpluses that haven’t yet materialized. As of June 1st, the General Fund surplus is only $1.7 million over forecast, which is far short of the $20 million suggested to be used. The Governor also proposed using $47 million of the education fund stabilization reserve funds to offset property taxes, but this would drain the reserve funds which would have to be replenished by future property taxes.  Borrowing against future property taxes will have a double impact on property taxes next year because we’ll have to pay for schools next year and payoff this year’s borrowing. Also, the Governor wanted to eliminate the $20.8 million Income Sensitivity Program (Vermont Property Tax Rebate) that we added to help 66% of Vermonters who pay their property/school taxes based on income. This proposal would have adversely impacted those on Social Security and Low-Income Vermonters. Lastly, the Governor proposed eliminated the School Meals Program which would affect all K-12 students. We all know that children cannot learn when they are hungry, and many children come from food-insecure homes. In addition, the school meal program helps local farmers who partner with the schools; and eliminating the school meals program would result in a loss of nearly $17 million dollars in federal dollars which help support the school meals program. 

Some of you are retired and on Social Security – and so am I. I don’t like to pay taxes, but I know taxes are necessary to fully fund our schools, to make sure every student gets a quality education, and to make sure the teachers are paid adequately. We have so many excellent and dedicated teachers in our district, who should be recognized for their efforts and paid fairly.

I supported the override of the Governor’s veto of the education funding bill because his proposal wasn’t practical, it would cost more, and I didn’t want to create chaos in our school funding system. In a rare show of unity, Vermont-NEA, the VT-Principals’ Association, the VT Superintendents Association, and the VT School Boards Association all supported the override vote.  Plus, our local School Board was in favor of the legislature’s bill.