Gov. Phil Scott on Thursday signed into law H.850, a bill that repeals a controversial property tax cap and allows school boards to push back budget votes in an attempt to lower education spending and, in turn, property taxes.
“The changes made in this bill are a necessary step as Vermonters face a projected 20% increase in property tax bills, and in some communities, it could be even higher,” Scott wrote in a letter to lawmakers. “But to be clear, this bill does not solve our property tax problem. These changes will only reduce rates if school boards adjust their budgets accordingly and local voters support those changes.”
On Wednesday, the Senate expedited the passage of H.850, acknowledging the time-sensitive nature of the legislation.
During debate on the Senate floor, Senate President Pro Tempore Phil Baruth, D/P-Chittenden Central, said the legislature would need to come up with “groundbreaking” new ways to contain public education costs this year.
In his letter, the governor harkened back to 2017 and 2018 proposals that he said “would have put us on a better path to a sustainable public education system.”
Scott’s finger-pointing at lawmakers has become a repeated refrain as Vermonters face a projected average property tax increase of 20%, driven by a predicted 15% increase in education spending.
H.850 will repeal the 5% homestead tax rate increase cap created by Act 127 — Vermont’s most recent education funding law — and replace it with a tax discount system limited to districts that lost taxing capacity under the new pupil weighting system.
The law will also allow school districts to push back budget votes until April 15, as lawmakers hope removing the property tax cap will spur school boards to remove spending. Many districts had planned to put budgets in front of voters on Vermont’s Town Meeting Day, which this year is March 5.
School district leaders have said the spending increases are needed to maintain the status quo due to inflation, rising staff health care costs and teacher salaries, and the increased needs of Vermont’s children, an increasing number of whom are struggling with mental health challenges.
It remains to be seen how much money school boards will slash from their budgets as a result of H.850’s passage.
