Property tax rate likely headed up another penny

Look for the statewide property tax rate to jump another penny before lawmakers adjourn this year.

The House last month approved a 1-cent increase in the statewide rate, bringing the figure from 87 cents to 88 cents. But that was before Vermonters headed to town meeting. And the school budgets approved last Tuesday, lawmakers learned today, included much higher increases than legislators had projected.

The 88-cent property tax rate presumed a 1.7-percent increase in school spending. After Tuesday’s votes – budgets in all but seven districts were approved – the increase looks to be closer to 3 percent, according to legislative analysts testifying before the House Committee on Ways and Means.

Maintaining the 88-cent rate would bring the reserve in the education fund down to 3.5 percent, well below the 5-percent lawmakers tend to maintain.

“We probably need another penny, is my guess,” said Rep. Janet Ancel, chairwoman of Ways and Means. “But I think we anticipated that would happen.”

School districts also anticipated the increase – most based their budget and tax calculations on an 89-cent statewide property tax rate.

Brad James, finance guru at the Department of Education, said he directed inquiring business managers atVermontschool districts to go ahead and assume the rate would increase by another penny before the end of the session.

School budgets by and large won the support of voters Tuesday. Of the 226 budget votes, only seven went down. Districts collectively will spend about 2.9 percent more next year than they did this year. Twenty-two towns have yet to vote on their school budgets, though those districts aren’t large enough to impact the overall spending trajectory.

Gov. Peter Shumlin had urged districts to hold the line on school spending. Doing so, he said, would allow the state to likewise hold the line on statewide property taxes.

One Response to Property tax rate likely headed up another penny

  1. Pingback: The myth of tax fatigue, part 4,628 | | Vermont BlogVermont Blog