Vermont property taxes expected to rise 5.9% in 2025

MONTPELIER, Vt. (WCAX) – Your school tax bill is headed higher again next year. The state estimates a 5.9% increase in the statewide property tax in 2025. That’s less than some had feared and far short of the whopping 13.8% hike we saw this year.

But Vermont Gov. Phil Scott cautions against calling that a victory and is urging lawmakers not to delay an overhaul of the education funding system.

Local districts are planning about $115 million in new spending. The newest increase in property taxes comes as leaders grapple with how to make our school funding sustainable.

The new projections are based on preliminary school budgets. If passed by voters on Town Meeting Day, the statewide property tax would have to go up nearly 6% to cover the spending in schools across the state.

Spiking teacher health care costs, mental health and behavioral needs of kids, and deferred maintenance on school buildings continue to drive costs higher.

“After having such a large property tax increase this year, hearing about another increase in the realm of 6% will not be welcome news for most, I’m guessing,” Vt. Tax Commissioner Craig Bolio said.

Monday, a panel tasked with exploring options for cost containment and reimagining our education system brainstormed ideas in a draft report, with a slew of ideas ranging from new taxes for property tax relief, changes to the funding formula and education cost containment, including potentially closing or consolidating smaller districts.

They stressed the factors driving costs in Vermont’s educational ecosystem are complex and say they need more data to see whether any of these suggestions would pay off, or whether some ideas like school closures would have unintended consequences.

“I worry about somehow perpetuating this narrative that rural schools are the problem, that rural schools need to change,” said John Castle of the Vermont Rural Education Collaborative.

State lawmakers raised about $90 million in new taxes and one-time money last year to buy down property tax rates a few percentage points. Something like that could be on the table for the coming year, but the commission says long-term fixes will likely take years.

Governor Scott says decision-makers know the underlying challenges and he is urging lawmakers to get started with systemic reforms when they reconvene in January.

“You have to look at the period of 3-4 years and we’re talking 30-40% increases. That’s not sustainable. We’re going to have to do something different,” said Scott, R-Vermont.

The Education Commission is expected to issue its final report later this month.

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