Vt. officials forecasting 9% property tax hike
MONTPELIER, Vt. (WCAX) - A new report from Vermont’s tax department forecasts education property taxes to increase by an average of nine percent this year.
The annual education tax rate letter helps lawmakers and administration officials get a better economic picture so they can build a budget. It also gives them a preview of the education tax yields for homeowners and the non-homestead tax rate for the fiscal year 2022 which begins on Oct. 1.
Like most things in 2020, the primary driver behind the hike gets back to the pandemic, which has rocked the economy. A lack of spending at local stores, restaurants, and hotels means an estimated $40 million shortfall in the education fund. The forecast is one of the largest single-year increases in the average homestead rate in the last decade.
But Vermont Tax Commissioner Craig Bolio says the numbers aren’t final and the economic picture could improve depending on how the state does in curbing the virus and getting more people back to work. “There’s always an element of uncertainly in trying to forecast rates anyway. But that uncertainty is amplified this year because the path of the virus is going to have a determining factor on what those revenues look like,” he said.
This year there was also an increase in how much the state pays for teacher retirement, so that’s driving up property tax rates as well.
As grim as the numbers may seem Bolio says the state has been here before. Three years ago, officials forecasted a 9.4 percent increase, but the Legislature and administration were able to work together to keep rates from going through the roof.
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