Vermonters will face an 11.9 percent average increase in education property taxes next year unless lawmakers again step in to soften the financial blow, according to a forecast from the Vermont Department of Taxes.
The projected increase, outlined on Monday in what is known as the the December 1 letter, is likely to put even more pressure on lawmakers to reform education funding in Vermont.
Last year, the legislature passed and Gov. Phil Scott signed a controversial consolidation plan. Act 73 aims to transform how schools are funded and governed in response to declining enrollment and rising costs.
Its most thorny provision calls for the forced consolidation of districts in an effort to save administrative costs. A task force that was to outline the new districts has instead recommended achieving savings by setting up regional partnerships to collectively fund services such as special education and transportation.
In a statement on Monday, Scott called the projected increase “totally unacceptable” and urged lawmakers to stay the course on a true transformation plan.
“To achieve the outcomes we’ve all agreed are important, the legislature must follow through on the commitments made in Act 73,” Scott said. “This legislation charts a new, more affordable, and higher quality course. When implemented, it will reduce unnecessary and duplicative overhead and bureaucracy to ensure more of every dollar actually reaches our kids.”
To offset the potential tax hike for the coming year, the legislature would have to funnel millions of additional general fund dollars into the state’s complex education funding system. That has happened in each of the past two years, helping to ultimately wrest the 18.5 percent increase projected in 2023 down to 13.8 percent and the 5.9 percent projected in 2024 down to 1.1 percent.
That latter reduction was achieved largely by spending $118 million in general fund cash. If that amount were to be spent again, next year’s 12 percent increase would come down by around 5.8 percent, according to Sarah Clark, secretary of administration.
The governor has not completed his recommended budget for next year, so it’s too soon to say whether he would support another bailout of the ed fund while the broader transformation efforts continue.
In past years, the increases have also been contained through new taxes, school boards reducing their spending and voters rejecting school budgets.
The cost drivers for next year’s tax increase are they same as they have been for years. These include higher health care costs, inflation and increased facilities needs, said Education Secretary Zoie Saunders.
“We are here because the status quo for how we fund public education in Vermont has been unsustainable,” she said in a media briefing.
The costs have not just been to taxpayers, she said, but also to students, who have suffered as districts slashed services. The goal of the transformation effort is not just to cut costs but also to deliver education more equitably across the state.
“It is imperative that we work on the statewide solution so that our districts are set up to deliver on the educational-quality expectations that we set forth in Vermont,” she said.
Legislative leaders pledged to press forward with the reform efforts.
“We’ve seen this movie again and again over the last handful of years,” Senate President Pro Tempore Phil Baruth (D/P-Chittenden-Central) said in a statement. “This pattern absolutely cannot continue.”
The latest letter makes it clear that “we can’t just feed more and more taxpayer dollars into an unreliable and volatile system,” Baruth said.
He said he was committed to “advance reforms that will foster an equitable education system for all of Vermont’s children at a price that’s affordable, predictable and stable for Vermont’s families.”
He added: “But we will need Vermonters’ support to make it happen.”
House Speaker Jill Krowinski (D-Burlington) also vowed to take action but offered few specifics.
“It will take a variety of changes to make a difference and we must be united in our mission to make sure that our public schools have the resources they need to support all of our kids, at a price that Vermonters can afford,” she said in an statement.
Opposition to the redistricting effort has been intense.
In a position paper released in November, the Vermont School Boards Association wrote that its members have “grave concerns” about the potential for mandatory school consolidation and districting “in the absence of data.”
The Vermont Rural School Community Alliance, made up of dozens of rural selectboards and school boards, panned the proposed education overhaul, saying it would eliminate local control without any evidence that doing do would save money.
In response to such criticism, the task force veered from its charge of creating new maps of consolidated school districts. It instead called for five regional partnerships known as Cooperative Education Service Areas that would allow districts to save money by sharing specialized services.
The areas are modeled after the Boards of Cooperative Educational Services, or BOCES, which have been successful in southeastern Vermont in reducing costs.
Saunders dismissed the proposal, claiming it would merely “add a layer of complexity to maintain the status quo.”
If the full 12 percent went into effect, the total education property tax increase over the past five years would total 41 percent, Tax Commissioner Bill Shouldice said.
He stressed the underlying problem: Over the past 20 years, the number of students has dropped 16 percent while the cost of educating them has increased $924 million.
“If we allow this landscape to persist, we cannot seriously expect young and growing families to buy homes and settle in Vermont; local voters to approve budgets; or seniors on fixed incomes to retire comfortably in Vermont,” Shouldice said in a statement.
The letter outlining the potential tax hike is here: