Ed Fund surplus reducing property taxes
MONTPELIER, Vt. (WCAX) - Extra cash from the pandemic is helping buy down property taxes in Vermont.
Inflation, staffing, and pandemic learning loss are driving up the cost of education, but lawmakers are looking to use surpluses to mitigate the impact on property taxpayers.
School budgets are set at the local level and are paid out of the statewide Education Fund. Lawmakers then set a statewide tax rate to fund non-homestead property tax rates. Lawmakers also set homestead property and income yields, which are then used to calculate local tax rates based on local spending decisions.
According to Vermont lawmakers, education costs increased by eight percent this year, in part because of increased needs coming out of the pandemic and the federal funding covering it has dried up. Meanwhile, the Education Fund had a $102.9 million surplus, in part because of federal funds coursing through sales and rooms and meals taxes.
Most Vermonters pay property taxes based on their income, while others pay based on property value. Next year, equalized property tax rates for homeowners would drop from $1.46 per $100 of assessed value to $1.39 per $100.
“Mostly, it’s spending as usual and making sure we’re using some of that surplus to keep tax rates from going up too high, but also making sure there is that relationship,” said Rep. Emilie Kornheiser, D-Brattleboro.
However, According to the Vermont Department of Taxes, the average property tax bill is projected to increase by four percent. Lawmakers are also earmarking some $29 million of surplus funds into universal school meals and $6 million for afterschool grants. They are also setting aside around $10 million to help implement wide-reaching education funding reforms passed into law last year.
The governor’s team says they would have liked to see more surplus money used for property tax relief but they don’t have any objections to the bill.
While property taxes are staying level, there is a proposed payroll tax and fee hikes at the DMV to fund other new initiatives.
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