The House Committee on Education passed a set of property tax rates for next year using a new method — a “yield” formula instead of the typical increase in the penny rate.
“None of us got exactly what we wanted,” said committee chair Rep. David Sharpe, D-Bristol. “But we got a good bill out.”
Legislators amended the bill slightly from the language approved in Ways and Means, and voted the legislation out of committee unanimously. The bill, H.853, will now go to the House Committee on Appropriations.
The bill includes a controversial provision that applies all of the surplus money in the education fund, about $19.7 million, to lowering the statewide property tax rate.
The yield formula for the statewide homestead property tax is part of Act 46, which was enacted last year. The new calculation, which takes into account educational funding outlooks, will be in use for the first time in the coming fiscal year.
Lawmakers say the yield calculation for the statewide homestead property tax is more transparent because it shows how much local districts are spending per student and because it is tied to a fixed rate of $1 per $100 of property value.
The statewide yield rate, or “property dollar equivalent yield,” is the product of the total revenues in the education fund, minus spending on programs not directly related to kindergarten-through-12 public education, divided by the total number of students in Vermont schools.
The locally adjusted tax rate is based on the difference between how much each district chooses to spend per pupil and the statewide yield rate.
The education tax bill passed by Education keeps the property yield at $9,701 and the income yield at $10,870.
The amendments added in House Education include a request for annual outlooks on projected education revenues and expenses to be prepared and presented by the Joint Fiscal Office.
The committee also requested a report on education spending, including impacts of potential changes in the statewide education property tax.
