When the tax bills for Leicester and Middlebury went out this fall, they included a letter encouraging those with questions about the education property tax rates to contact Addison County State Sens. Chris Bray and Ruth Hardy, and me.

I thought I might try to answer the questions I have received about the increase in property taxes and, more importantly, the steps the Legislature took to address it.

Vermont’s education funding system is unique. School boards propose budgets to voters, and once those budgets are approved by voters, the Legislature is obligated to raise the right amount of taxes to fund those budgets by setting tax rates. Those funds come mainly from three sources: consumption taxes such as sales tax and a portion of the rooms and meals tax, non-homestead property taxes, and homestead property taxes.

In developing their budgets for this current school year, school boards faced a perfect storm of costly challenges: the end of Covid-era federal dollars with no decrease in student need, 16.8% increase in health care costs, historically high contract settlements with their employees and basic inflation. They proposed responsible budgets, but the budgets reflected those pressures. The result was an increase of about $250 million in education spending from FY24 to FY25 statewide, and a projected property tax increase of more than 20% on average.

Knowing that increase was unacceptable, but limited in what levers we could pull, here is what the Legislature put in place to bring that down to 13.5%: We eliminated the exemption from sales tax on cloud-based software, which adds $27 million ongoing to bring down property taxes; we added $69 million in one-time, in-hand surplus revenue to the Education Fund; and we increased the room tax on short-term rentals. In all, we added nearly $100 million to help reduce property taxes. We also re-instituted the excess spending threshold, which has proven an effective cost-containment measure.

This brought down the projected statewide education homestead property tax rate by a third. Had we not overridden the governor’s veto of a must-pass bill, that $100 million of tax-rate help would have vanished, and this situation turned even more dire.

The governor talks a lot about his last-minute ideas — not detailed plans, but concepts of plans — to borrow an additional $120 million from future, hoped-for surplus dollars, and figure out how to dramatically scale back education spending to pay that back later. In essence, the concept boiled down to putting state costs on a credit card and kicking the can down the road on a solution. This was not a responsible or researched proposal, and it was late. The governor had known the challenges since November 2023 and had the expertise of all of state government at his disposal — the Tax Department, the Agency of Education, the Division of Property Valuation.

It is not surprising. Addressing the high cost of our education system has no simple fix and is filled with political risk. Vermonters highly value what we have and how it is set up. Yet we cannot ignore a dramatic decrease in enrollment, a shortage of licensed teachers, aging buildings and the high mental health needs of our kids, the burden of which falls more and more on schools.

The Legislature has created the Commission of the Future of Public Education to create a vision and pathway for a public education system that delivers quality at a cost Vermonters can afford, as well as shorter-term cost-containment strategies. We hope that pathway is something Vermonters will embrace together, because that is the only way we will succeed.

I live in Cornwall. I just received my property tax bill. Our town’s education tax rate is up over 20%. This is not an abstract problem for any of us. We are committed to finding solutions and making hard decisions because we want a Vermont that works for all of us, not just those who can afford it.

Peter Conlon

Cornwall

Editor’s note: Peter Conlon is the House representative for Cornwall, Goshen, Leicester, Ripton and Salisbury.