Vt. Property Taxes Could Increase
The statewide property tax will increase 3 cents to 5 cents this year, according to the Shumlin administration.
Unless schools make an effort to cut spending or the state makes a change in the base education rate formula, the statewide property tax rate will go up five cents for every $100 worth of property value. The current rate for nonresidential and commercial property is $1.38 (up from $1.36 the previous year) and the rate for homestead property is 89 cents (up from 87 cents). Rates can be higher in local jurisdictions, which are based on local spending levels.
Tax Commissioner Mary Petersen is expected to send a letter to lawmakers about the increase by Friday. She declined to say what the rate would be.
In a letter to school districts on Monday, Gov. Peter Shumlin asks educational leaders, i.e. superintendents, business office managers and school board members, to keep their budgets in check. The letter makes it clear that if schools spend more than the rate of inflation (2.2 percent) the statewide property tax rate will likely go up by as much as 5 cents.
The governor points out that while schools have performed well, he says schools must “redouble efforts to constrain, if not reduce, education spending.”
State officials say early estimates show that school spending will likely go up by 4.8 percent in the coming year. That increase translates to a 5 cent uptick, based on current numbers and statutory requirements that provide for inflation-adjusted increases in the funding formula for schools.
“By all accounts, our spending levels are among the highest in the nation,” Shumlin writes.
Shumlin, like his Republican predecessor Gov. Jim Douglas, asks school leaders to hold the line on school spending at a time when student enrollments continue to decline. There are currently 89,400 students in Vermont schools; next year the number is expected to drop by 650.
“If you all can hold school spending to the rate of inflation the increase will be less,” Shumlin wrote. “I understand that situations vary by district and support local decision making by school boards and voters, but acknowledge that we are looking at the fifteenth consecutive year of declining enrollments.”
Despite a dramatic decline in enrollments from a recent high of 103,000 students, Vermont consistently ranks among the top education spending states. The American Legislative Exchange Council, a conservative think tank, placed the state seventh in school spending. Vermont has the third highest public education spending rate on a per capita basis in the country, according to a ranking published by Deseret News, a Salt Lake City newspaper this year.
The governor’s letter is accompanied by a spreadsheet that details spending levels for every school district in the state. The average spending per pupil is $12,788. Mount Tabor, in Rutland County, will spend about $9,038 per pupil this year, while the Reading school district in Windsor County, will spend $18,650 on each student this year.
Jeb Spaulding, the secretary of the Agency of Administration, said the two biggest factors that affect the statewide property tax rate are spending at the local level and the grand list, or the market value of real estate, on which the rates are calculated. “The governor doesn’t control either one of those,” Spaulding said.
The only way the administration and lawmakers can reduce the statewide rate is by lowering the per pupil base education state reimbursement rate for schools. The difference between that rate and the actual cost to educate students is made up by local property tax increases.
This article has been amended to correct an earlier error. The following correction ran in the Thursday, Nov. 29 edition of the Valley News:
Last year's property tax rate for nonresidential and commercial property in Vermont was $1.36 per $100 of valuation, and is currently $1.38. A VtDigger.org story in yesterday's Valley News gave an incorrect figure for last year's rate.