State education taxes lower than projected
(The committee) wanted to get it out there on the early side to reassure both school districts and taxpayers things weren’t as bad as we thought they were.
— Sen. Ruth Hardy
ADDISON COUNTY — School taxes are going to be lower across the board than initially projected back in January, according to lawmakers and local school district officials.
Several factors have combined during a winter that made the state tax rate, upon which local rates are based, difficult to project, according to experts recently interviewed by the Independent.
Rep. Peter Conlon, D-Cornwall, a House Education Committee member, described the bottom line in a Feb. 4 piece in the Independent. In it, Conlon shared the good news about what is known as the “Yield Bill,” upon which statewide property tax rates are based.
“It sets a number that will be used to calculate statewide education property tax rates, and that number is far better than legislators, economists and school officials had imagined when the pandemic began or even a couple of months ago,” he wrote.
Certainly, the news is good for homeowners. For example, in the Vergennes-area Addison Northwest School District, the latest estimates based on updated state numbers call for a district-wide rate about 11 cents lower than the district initially projected.
ANWSD also benefitted from a boost in its student count that produced extra revenue, another influence on tax rates. But other local and statewide districts are also expected to see lower homestead property tax rates, according to lawmakers.
County residents should check the latest information from the Addison Central, Mount Abraham and Otter Valley districts to learn where tax updates stand.
What happened? Essentially, over the last three months elements that move the yield number proved more favorable than were projected by Vermont Tax Commissioner Craig Bolio on Dec. 1.
Sen. Ruth Hardy, D-Addison County, a Senate Education Committee member, explained that school districts are expected to use Bolio’s numbers in calculating budgets and tax rates. And, she said, even Bolio was hamstrung by outdated data.
“The tax commissioner’s December memo is what school districts are directed to use in building their budgets. And because this year has been kooky for any number of reasons, the tax commissioner was using revenue numbers from August. Those were the most recent estimates available,” Hardy said, adding, “Numbers changed radically from August to December, and again from December to January.”
Many numbers that changed were within the Vermont Education Fund and made it healthier than expected.
Not only did more federal money come in than lawmakers had hoped, sales tax revenues exceeded projections, and more than offset lagging rooms and meals tax receipts. And officials expected residents to struggle to pay property taxes, but they did not.
Conlon wrote in an email, “Rooms and meals revenue did tank, but they make up only a small portion of the fund. Meanwhile, the federal government poured about $4 billion into Vermont.
“In short, people bought a lot of stuff and paid their property tax bills on time.”
When the Ed Fund is flush it can contribute a larger share of the money needed to support state education spending, lowering the burden on property taxes.
LOWER SCHOOL BUDGETS
Bolio had projected statewide school spending would increase by 3.8%. Instead, school boards held the line statewide, and there will be less spending, meaning less money has to be raised statewide. Locally, the three county district budgets range from a roughly 1.1% decrease to a 1.1% increase in spending, for example.
If anything, the numbers could look even better when the dust settles, Conlon said: “The Ed Fund numbers for the purposes of determining the yield are pretty baked in right now. With one exception: how much budgets go up overall, and that is looking good.”
The House Ways & Means Committee released H.152, the first draft of a Yield Bill, much earlier than typical to signal that things looked better, according to Hardy.
She acknowledged there are plenty of hoops to jump through for the bill, which when adopted will be used by lawmakers to set the final state tax rates for those who pay based on property value and income.
But she, Conlon and school officials are confident in saying the news will remain positive for Fiscal Year 2022 tax rates.
“My understanding is House Ways and Means wanted to get it out there on the early side to reassure both school districts and taxpayers things weren’t as bad as we thought they were,” Hardy said.
Three local school districts are projecting lower property taxes based on the changes in the education numbers coming out of Montpelier.
• The Vergennes-area Addison Northwest School District foresees its tax rates going down.
• Addison Central School District in Middlebury and surrounding towns updated its projections downward.
• Mount Abraham Unified School District officials in Bristol see 5-Town tax rates sliding.
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