Gov. Phil Scott’s administration wants to use $75 million to dampen next year’s projected 12% average property tax increase.
The funds — unused and rolled over from this year’s state budget — could cut the average projected spike by more than a third.
“We have a large education funding challenge, which is the governor’s top priority this year,” Adam Greshin, commissioner of the Vermont Department of Finance and Management, told lawmakers in the House Appropriations Committee on Tuesday.
Buying down property taxes — which pay for public education in Vermont — has become the norm in Montpelier in recent years. Just last year, lawmakers and Gov. Scott allocated more than $100 million to keep the average property tax bill nearly flat. Even with the annual cash injections, average education property taxes have risen more than 40% across the state in the last five years, according to the Vermont Tax Department
Critics of spending one-time money warn the practice only delays confronting the problems at hand, like the ever-growing costs of education and health insurance, preventing structural changes.
About half of next year’s projected 12% average property tax increase comes from an expected jump in school spending, though districts are still in the process of formulating their budgets for the 2026-27 school year.
The other half of the looming spike is the result of last year’s buydown — the use of one-time money that leaves the state in a relative fiscal hole this year.
At his weekly news conference Wednesday, Scott called the $75 million proposal “just step one,” though he would not say specifically how his team might propose limiting property tax increases further.
Scott’s proposal will require legislative approval. Lawmakers return to Montpelier in the beginning of January.
How lawmakers will handle the expected property tax increase likely depends on the fate of Act 73, the law passed last year that sets in motion generational change to how education in Vermont is governed and funded. The biggest changes proposed in the legislation depend on lawmakers creating new, consolidated school districts this coming legislative session, a daunting task with an uncertain fate.
Scott, House Speaker Jill Krowinski, D-Burlington, and Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, all of whom supported Act 73, have said in recent weeks that lawmakers must follow through with the education reforms initiated by the new law.
Whether they all agree on putting one-time money toward property taxes isn’t yet clear.
In a statement Wednesday, Krowinski said a property tax buydown “carries real risk.”
“I have deep concerns that without structural changes, we’re simply putting a Band-Aid on a much larger problem and setting ourselves up for greater pain down the road,” she added. “I am committed to finding ways to lower the tax burden for Vermonters this year, but I believe it must be a part of a broader, long-term strategy that helps provide our students with a quality education at a cost Vermonters can afford.”
Baruth declined to comment on the administration’s buydown plan, saying he hadn’t yet had time to review it.
This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.