To the editor: Clarkson on why taxes increased so much and what can be done about it
The Chester Telegraph | Sep 11, 2024 | Comments 3
Most towns in Windsor County have received their education and municipal property tax bills by now. Many, but not all, towns have big tax increases.
Woodstock residents have yet to receive their bills but we can expect a 30% increase. These are increases none of us have budgeted for, and one that will be a challenge for many. So, I feel I need to address it head-on. I’d like to describe three things: 1) why education costs increased this year 2) why some towns increases are particularly steep and 3) what the legislature is doing about it.
This year’s education tax bill, and the tax increases it contains, is unsustainable. We are all frustrated by the confluence of education finance challenges that have resulted in such big increases in both spending and taxes this year. The question is – how to ameliorate it.
I think it’s important to map out how we got to this point.
First, how the costs get set. Local education districts prepare school budgets that local voters vote on at Town Meeting. These budgets are developed and approved locally. The total of these budgets sets the education bill that comes to the legislature to be funded.
Second, why the bill/costs have increased so much this year. Costs have been increasing for some time, but over the past three years, the federal pandemic funding (ESSER funds) has helped us cover the increasing costs of education, thereby masking the impact of inflation on taxpayers. This year, some key cost drivers have challenged our schools as they created their budgets: a 16.4% increase in teacher’s health care, the end of one-time federal Covid/ESSER funds, overall inflation, mental health and social service needs, PCB cleanup and the debt service on new capital projects or renovations. Without the federal funding we are seeing the cumulative impact of cost increases in education. All these factors resulted in a big bill this year.
In addition, the new weighting formula, Act 127, which went into effect this year, gives more per-pupil support to school districts with children living in poverty, learning English as a second language and living rurally. While Act 127 was well-intentioned, it has resulted in unintended financial consequences that need to be fixed.
This increased bill is what the legislature was sent and had to figure out how to pay.
Third, how the bill gets paid. Funding the education bill has traditionally been paid through property taxes. Because education costs have increased, the state has had to devote additional revenues to cover the bill (sales tax, the lottery) and to buffer the pressure on property taxes. Unfortunately, other property-related costs, like Current Use and TIFs (tax increment finance) continue to be included in the education fund even though they are unrelated to education.
In December, the state Tax Department predicted that taxes would have to increase 20% to cover education costs. As a result, school boards went back to work trimming budgets and the legislature worked hard to lower the tax impact. Not great – but with adding revenue from the 3% increase on short-term rentals and the cloud tax — the state-wide increase was reduced to 13.8%. Again, not great for any of us but better than where we started.
Fourth, additional things that impact local residential taxpayers are local school spending choices and increases in house values. Woodstock area towns have experienced the impacts of Covid, climate refugees and seasonal sales on real estate prices – and, as a result, we have seen a rapid escalation of our house values. This is having a big impact on our taxes. If you are selling a home, this has been a great benefit – but the increased valuation has had a terrible impact on our property taxes. Towns that have reappraised are seeing this big increase in values. In Woodstock, it is particularly painful as our property values have risen so high, so fast and our CLA (Common Level of Appraisal) has fallen to 63% of fair market value. The CLA is the balancing lens that ensures all towns’ properties are valued at the state-wide market rate. However, now market value includes seasonal home sales that are having a profound effect on our house values and on our property taxes as a result.
The Valley News article of 9 Aug ’24 spells out the problem.
Fifth, the governor’s proposal to artificially reduce the tax level seemed attractive – but it would have resulted in 30% higher taxes on our businesses and much bigger increases next year. He proposed using up all our reserves and borrowing to pay this year’s education bill – basically putting it on the credit card. The legislature felt this was not responsible and would have caused more pain next year. We hope that in facing the challenge now, we will find solutions sooner rather than later.
So, we need to attack all the education funding factors – cost and revenue – this coming year. No Vermonter can afford further tax increases like this. The legislature created the Commission on the Future of Vermont Public Education in Vermont to work this summer and fall reviewing all these issues and will make recommendations to the legislature this January. We need to proceed with smart solutions – not just go at everything with a meat cleaver – tempting as that might be. The commission is already reviewing all the challenges our education system is grappling with and hopefully proposing thoughtful solutions to them. Getting this fixed will be a top priority in the next legislative session.
Sincerely
Sen. Alison Clarkson
Windsor County
Filed Under: Commentary • Letters to the Editor
It is ridiculous to have a system where voters can approve higher and higher school budgets, without the same voters paying the full cost of the budget they voted for. If voters elsewhere in the State approved sky high budgets for the State to pay, and then the State collects the cost across the entire state, there is no incentive for the local voters to keep the budgets reasonably low.
If the State actually funds the local school districts, then there is no incentive to the voters to keep the budget reasonable. So, we have budgets with frivolous expenses that we all have to pay for. My property tax rates are at New Jersey tax rate levels.
We should not vote on local budgets to be paid for by the state. Instead, if taxpayers throughout the state are paying for the sum of all the local budgets, then we should be voting statewide on the total education expense throughout the state, with strict rules of what kinds of costs will be funded, and at what levels.
When the budgets are going up while the number of students is going down, the system is dysfunctional. Why isn’t it being fixed?
This is the result of a supermajority and a significant progressive element. The tax burden in VT is one of the highest in the nation and is combined with remarkably weak benefits for middle class citizens. These increases are not only not sustainable but profoundly unfair. It is a given everywhere else in the world that you pick the neighborhood you live in based on the quality of the schools. In VT we are trying to level that out and it is utterly unrealistic. The most important thing we can do right now is consolidate schools and school districts. We need to have teachers and all municipal employees covered under the state employee health insurance and we need to invite national carriers to bid on this book of business. I have lived in VT PT or FT for 30+ years. I have moved my residency to FL to a very large extent due to the absurd tax burden in VT. I get 3-4x the services at about a fifth of the total tax burden. We need to stop giving away the hard earned tax payers $ to non contributing folks.
The recent dramatic increases in property taxes are due to the legislative supermajority passing Act 127 despite knowing the potential catastrophic results. While their intention was to address funding disparities, the new weighting formula has led to significant financial challenges for towns like Chester, Ludlow, Springfield, Cavendish, and Weathersfield.
Unfortunately, these changes have placed a much heavier financial burden on all taxpayers, especially working families and those on fixed incomes, while creating even greater tax disparity throughout the state.
The constitutionally mandated right of our students is clear, “Vermont students must be afforded substantially equal access to a quality basic education… Vermont children will be afforded educational opportunities that are substantially equal although educational programs may vary from district to district.” Our Constitution does not mandate “equity” that the Act 127 is designed to address. We cannot lose sight of the fact that as Vermonters and Americans, we are entitled to equal access – not equal outcome. That is an impossible goal that no amount of money will achieve.
It’s important that we address these unintended consequences of the weighted pupil funding and work toward solutions that are both more affordable and sustainable for all Vermonters. With future tax projections also looking deeply concerning, it’s clear that a more balanced and thoughtful approach to education funding is needed.
This election, for a fresh perspective and practical solutions that DO NOT see the taxpayer as an ATM machine, please consider voting for Andrea Murray, Senate Candidate for Windsor District. Working together, we can find a balanced and more affordable path forward for all Vermonters. Find out more about me at: AndreaforVermont.com