News analysis: Are school tax rates going down?

Last August, Chester’s Select Board asked representatives of the Vermont League of Cities and Towns and the tax department, to attend a special meeting to explain Vermont’s education finance system.

But it seems the Chester Select Board is still having difficulties understanding the way that about 70 percent of Chester’s property tax burden is calculated.  In the packet for last week’s Select Board meeting was a calculation sheet that pointed to a reduction in tax rates for Chester after last year’s big increase. If that sounds  like good news, you couldn’t tell from the board’s reaction.

Select Board members looked at the calculation sheet that was given to town manager David Pisha by Town School board chairwoman Alison DesLauriers, who characterized it as “good news.”  In their eyes, however it was a local number that would go into a meat grinder in Montpelier and yield a tax increase.  “I guess that it shows the local people have done their job,” said Pisha. “But now you’re hostage to the state.”

“This is purely local, I agree,” said board chair John DeBenedetti. “This could be changed by that calculation. There are four aspects to that calculation and that’s going to have a big impact on these numbers.”

In fact, the sheet that the board was given was actually the state-generated calculation that they feared would yield higher rates. And what the calculation said was that the volatile number – the Common Level of Appraisal (CLA) had swung heavily in favor of Chester’s taxpayers.The CLA evens the playing field among towns with varying levels of property assessments by comparing the actual sales of properties to their value on the grand list. That way, a town with low appraisals (compared to sales) gets a bump up in its tax rate to equalize it with towns that have high appraisals compared to actual sales. Those towns – like Chester – get a reduction in rates.

The calculation sheet reflects final numbers on variables such as changes in school budgets and the number of pupils, which leaves only the state’s determination of the base education tax rate to be decided.

Even here, the calculation takes into account the 2-cent increase that has been projected by the state.  What this means is that barring a massive (and unlikely) increase in the state’s base education tax rate, Chester will likely see a tax rate reduction. Maybe the best news is for the owners of  business properties that fall under the “non-residential” rate, which will see the biggest drop.

Will that mean a lower tax bill for you?

Will that mean a lower tax bill for you? That depends on several factors including changes in your assessment or in your income if you are getting an “income sensitivity” tax break.  Each taxpayer’s situation is individual.

With these calculations in hand, what the Select Board (and individuals) might want to do is urge their representatives to hold the line on the base education tax rate. Here is an “explainer” on how the education financing system works.

— Shawn Cunningham