Richmond Town Manager Josh Arneson, like other municipal leaders in Vermont’s 247 cities and towns, annually celebrates the holidays not by writing cards, but instead by drafting a local government budget for the coming fiscal year.
“We always start out with a wish list,” Arneson said in his community of 4,167 people.
This season, however, leaders are dreaming less and dreading more.
Public complaints about rising property tax bills that fund municipal services and schools recently have centered on education spending. But Richmond is one of many communities facing costlier town employee health insurance (10% more in its case, a bargain compared to other places) and continuing flood cleanup (it finally received federal aid for almost $1 million in damage for 2023, yet still faces a nearly $2 million bill for 2024).
Add other increases and Richmond has calculated a municipal budget hike as high as 21% to fund town services at current levels starting July 1, 2025.
“We can’t do that,” Arneson said as he and the local selectboard look for cuts before placing a coming budget proposal on the March Town Meeting ballot. “This year, everything seems to be exacerbated.”
Richmond isn’t alone. Brattleboro is seeking to lower a 2025-26 municipal base budget that, without reductions, would spark a 22% tax increase, according to estimates. Montpelier is surveying residents about budget priorities after determining that retaining all current local government services would require a 24% hike.
“That is clearly not acceptable,” Montpelier City Manager William Fraser wrote in the survey, “and hard decisions will need to be made to bring that number down.”
Vermont communities seeking to vote on budgets in March must set and publicize the ballot by Feb. 2, according to the state. That gives local officials less than two months to decide what to continue and what to cut.
For most, maintaining the status quo isn’t an option.
“I have had many conversations with taxpayers who feel they can just no longer afford to live in Vermont,” said Ellen Majonen, interim town clerk, treasurer and delinquent tax collector in Guilford. “The cost of living here coupled with taxes is just too much to handle.”
A VTDigger poll of municipal officials shows that employee health insurance is the most shared driver of rising costs, with few choices other than the state’s two largest providers, Blue Cross Blue Shield and MVP Health Care.
Bennington, for example, is working to limit a proposed local budget increase to 5%, even though it’s facing up to a 26% increase in health insurance premiums on Jan. 1.
“That will impact the current budget as well as the one for the coming year,” Bennington Town Manager Stuart Hurd said.
Flooding in 2023 and 2024 has left dozens of communities swimming in red ink. Many have tapped budget reserves or taken out loans to stay solvent as they wait for cleanup money from the Federal Emergency Management Agency.
FEMA recently announced it would increase its reimbursement rate for July 2023 flooding from 75 to 90%. But that still leaves state and local governments to pick up the remaining 10%.
That’s a challenge in places like Marshfield, population 1,583. In March 2023, residents there approved a $1.39 million local budget. Then that July, they sustained $1.6 million in flood damage.
“Even with the additional FEMA reimbursements, the town’s share is going to be about $300,000 for the 2023 flood, and we have more damage from the 2024 flood to contend with,” Marshfield Town Clerk Bobbi Brimblecombe said this month.
Many of the same communities have also lost a sizable percentage of their tax bases after stormwater damaged or destroyed homes and businesses.
“The flooding caused a significant hit to our grand list,” Plainfield Town Clerk Bram Towbin said of an estimated $1 million decrease — or about 10% of total assessed property value. “Given the circumstances, we are approaching budgeting by balancing the harsh reality of lower tax revenues and higher costs.”
Vermont cities and towns are drafting local government budgets at the same time the state is projecting education property tax bills will rise in the coming fiscal year by an average of 5.9%.
“With this,” Gov. Phil Scott said in a statement, “Vermonters will have seen a 33% increase in education property taxes in the last three years.”
Many municipalities know only too well.
“The large jump last year was the school budget,” said Maureen Harvey, town clerk and treasurer in Duxbury. “We are mindful not to have a local increase to make the tax bill more painful.”
Local leaders are drafting their budgets at public meetings set to continue next month. In Brattleboro and Montpelier, residents are questioning why their communities have added supplementary positions over the years such as full-time coordinators for communications and sustainability.
“I’m not advocating for staff cuts,” Brattleboro resident Dick DeGray recently told the town selectboard, “but the reality is they have to be on the table.”
Montpelier City Council member Tim Heney was the sole “no” vote when officials proposed last year’s budget, meeting minutes show. This season, he’s far from alone in his concerns.
“There’s definitely a lot of discussion around the community about how are we going to get out of this?” Heney said. “The primary roles of city government are police, fire and public works. There’s a bunch of extracurricular things that we do, but they can’t bump our emergency responses. We’re trying to set some priorities.”
Local leaders in Brandon, having trimmed public works and highway jobs in previous years, now are weighing police staffing levels. But Town Manager Seth Hopkins, echoing the sentiments of many peers statewide, noted the difficulty “to economize and still try to provide the services the community requires and expects.”
Concluded Arneson in Richmond: “We’ll keep working on it.”
