Vermont Property Taxes to Rise 12% Amid Education Funding Challenges

Homeowners in Vermont are projected to face an average 12 percent increase in property tax bills for the upcoming fiscal year, primarily driven by increasing education costs amid declining student populations. The Vermont Tax Department's December 1 letter forecasts an 11.9 percent statewide rise in education tax yields for resident homeowners and non-homestead taxpayers, reflecting a nearly 41 percent increase over the last five years. This uptick in property taxes correlates with a 6.8 percent rise in per-pupil education spending, which is expected to reach an average of $14,892 for fiscal year 2027, underscoring the growing financial demands on Vermont's education system. The projected property tax hike arrives in the context of nationwide increases following the COVID-19 pandemic, where escalating home prices and rising borrowing costs have compounded homeowners' expenses, including insurance premiums. Vermont officials emphasize that the current education funding model is unsustainable, with calls for systemic reform to establish a more predictable, equitable, and affordable framework that supports stable property tax rates. State leadership, including Senate President Pro Tempore Phil Baruth and House Speaker Jill Krowinski, acknowledge the imperative for education financing reform. Baruth highlights past legislative efforts aimed at restructuring the system under Act 73, noting that further collaborative work is essential to implementing changes that maintain quality education while alleviating fiscal pressure on taxpayers. Education Secretary Zoie Saunders and other state officials point to the dual challenge of unaffordable property taxes and a financially strained education system that local communities struggle to sustain. The Vermont Tax Department warns that continued tax increases may deter young families from homeownership in the state, threaten voter approval of local budgets, and impact seniors living on fixed incomes. The state is contemplating reforms, such as consolidating school districts, to achieve cost efficiency and sustainability. These measures aim to establish a modernized education system capable of delivering equitable learning opportunities across Vermont, regardless of town, while addressing the fiscal realities impacting homeowners and taxpayers. The ongoing dialogue underscores the broader challenges of balancing public education funding with property tax stability in a shifting economic climate.