Property Tax Blues: Act 46, Rising Taxes, and Unchecked Education Spending

Property Tax Blues: Act 46, Rising Taxes, and Unchecked Education Spending

Vermonters were hit with steep property tax increases in 2024. Some towns experienced hikes as high as 25-30%. These sharp increases were driven by escalating education spending, compounded by an outdated funding system and the long-term effects of school district consolidation under Act 46. Though the legislature had hoped that Act 46 would reduce costs by consolidating smaller schools and creating more efficient district structures, the opposite has happened. Not only did some beloved small-town schoolhouses close, but education costs have continued to climb, leaving taxpayers burdened with higher taxes and frustration over the lack of promised savings.

The Great Sticker Shock of 2024

For many Vermont towns, 2024 marked a year of significant financial strain. Communities like Woodstock, Hartford, and Thetford experienced property tax increases ranging from 26% to a 62-cent increase per $100 of assessed property valueโ€‹(VNews). In towns like Woodstock, where property values surged by 100% over the past five years, property taxes spiked, further burdening homeowners already struggling with the rising cost of livingโ€‹(VNews).

Governor Phil Scott attempted to provide relief by vetoing the annual property tax bill, warning that Vermonters needed “property tax relief now.” However, the Democrat/Progressive supermajority in Montpelier overrode the veto, passing the legislation along party lines. The override passed with a 103-42 vote in the House and a 22-7 vote in the Senateโ€‹(Vermont Business Magazine). Critics of the bill, particularly Republicans, argued that increasing taxes without addressing the underlying spending problem would worsen the state’s fiscal health.

Senate President Pro Tempore Phil Baruth defended the override, stating, “Our local districts have sent us the bill that reflects all of the rising costs they faceโ€”and pretending that bill doesnโ€™t exist, or putting it on the credit card, wonโ€™t help any of us.” Meanwhile, House Minority Leader Rep. Pattie McCoy criticized the legislation, arguing that the state continues to “feed the beast” without addressing the fundamental issues within Vermontโ€™s education funding systemโ€‹(Vermont Business Magazine).

The False Promises of Act 46

Act 46, passed in 2015, was Vermontโ€™s ambitious effort to consolidate its numerous small school districts into larger, more efficient administrative structures. The law aimed to create savings by reducing administrative overhead and combining resources across districts. It was framed as a solution to the stateโ€™s declining student population. Unfortunately, the realities of Act 46 have not lived up to these promises.

One of the most significant impacts of Act 46 was the closure of many small-town schoolhouses, which had been deeply embedded in the spirit of Vermontโ€™s rural communities. Parents were disheartened as their children were forced to attend schools in more distant locations, leading to longer bus rides and a loss of the tight-knit, community-centered education many Vermonters valued. What was framed as an effort to streamline education spending and improve efficiency instead felt like a loss of Vermontโ€™s cultural identity, as schools were consolidated into larger, less personal institutions.

Even more concerning is that, despite these closures and consolidations, education costs have continued to rise. Instead of realizing savings, Vermontโ€™s education spending ballooned. The administrative costs, which were supposed to decrease, actually increased in many cases, as managing larger districts and transportation logistics added new layers of complexity and expense. Rather than becoming more efficient, Vermontโ€™s education system became more expensive and, for many families, more disconnected from their communities.

The Long-Term Trend of Rising Education Costs

In 2024, Vermontโ€™s education spending increased by $180 million, driven by rising healthcare costs, new mandates for mental health services, and the need to maintain aging school infrastructureโ€‹(VT Daily Chronicle). Despite the consolidation efforts of Act 46, Vermont remains one of the highest spenders on education administration in the country, spending nearly $1,296 per student on administrative costsโ€”nearly double the national average of $651โ€‹(Campaign for Vermont).

This growing administrative overhead, combined with the stateโ€™s commitment to small student-to-teacher ratios, has led to increasing frustration among taxpayers. While Vermont continues to invest heavily in education, the stateโ€™s academic outcomes do not reflect the investment. In 2023, only 33% of 9th graders were proficient in math, and 43% in English Language Arts. These troubling numbers raise questions about whether the state is using its education funds efficiently or simply pouring money into a system that is no longer delivering the results Vermonters expect.

School Budget Voting Pushback

The sharp rise in property taxes has not gone unnoticed by Vermont voters. In towns like Hartland, for example, voters rejected the proposed school budget twice before approving a version projected to increase the homestead tax rate by nearly 30%โ€‹(VNews). This pushback reflects growing frustration with the disconnect between school spending and property taxes, as many voters feel they are being asked to bear the burden of education costs without seeing corresponding improvements in school performance or local services.

Similar resistance has been seen in other Vermont towns, where voters have expressed concern that school budgets are increasing too quickly and without enough oversight. The stateโ€™s complex funding formula, designed to account for per-pupil spending and the differing needs of rural and urban districts, often leads to unpredictable tax increases that leave residents feeling frustrated and confused about where their money is going.

The Role of the VTNEA and School Associations

The Vermont NEA (VTNEA) has been a vocal advocate for increased school funding, emphasizing the need to raise wages, improve benefits, and expand mental health services for students. While these priorities are undoubtedly important, critics argue that the VTNEAโ€™s lobbying efforts contribute to the ever-rising education costs that are placing more pressure on Vermontโ€™s taxpayersโ€‹(Vermont Legislature)โ€‹(Campaign for Vermont).

As the VTNEA and other education organizations continue to push for higher school budgets, the question remains: how can Vermont balance the need for quality education with the financial realities of its taxpayers?

A Path Forward: Reforming Vermontโ€™s Education Spending

Given the rising costs and mounting frustration from taxpayers, itโ€™s clear that Vermont needs to find a better balance between maintaining high-quality education and controlling the financial burden on residents. Here are several ways the state could begin to address this challenge:

  1. Reevaluate Act 46 and Consolidation: Vermont needs to review whether Act 46 is truly delivering the efficiencies it promised. If consolidation has not resulted in cost savings, the state should consider restructuring how districts are managed, particularly in rural areas, where small schools remain central to the community.
  2. Consolidating Administrative Services: Vermont can still reduce administrative costs without sacrificing educational quality. By sharing services like payroll, transportation, and technology across multiple districts, the state can streamline operations and direct more resources into classrooms.
  3. Leveraging Technology for Efficiency: Modern technology can help streamline administrative tasks, reducing the need for so many layers of management and freeing up resources to improve student outcomes.
  4. Focus Spending on Direct Education Services: Vermont should prioritize spending on roles that directly impact studentsโ€”like teachers, counselors, and special education servicesโ€”rather than administrative overhead.
  5. Implement Regular Audits of School Spending: To ensure that education funds are being used efficiently, Vermont should conduct regular audits of school district spending. These audits can identify areas where cost-saving measures can be implemented without sacrificing the quality of education.

Conclusion: Balancing Costs and Education Quality

The rising property taxes in 2024 have highlighted the growing strain on taxpayers, while education spending continues to climb with no clear path to cost savings. The goals of Act 46 have not delivered the promised reductions in costs, and Vermonters are now left to pick up the tab.

As the state prepares for another big property tax increase in 2025, it is crucial for Vermontโ€™s leaders to rethink how education is funded and how resources are allocated. The time has come to balance the needs of Vermontโ€™s students with the financial realities faced by the stateโ€™s taxpayers, ensuring that both groups are well-served by a sustainable, effective education system.

David Soulia | FYIVT

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One response to “Property Tax Blues: Act 46, Rising Taxes, and Unchecked Education Spending”

  1. Yankeebo Avatar
    Yankeebo

    Ann Cummings and the rest of you greedy Washington County Senators have created this financial crisis for common Vermonters…stop promoting the killing of the innocents with your Planned Parenthood leanings and straighten out your morals lest you find yourself in the eternal evil environment of the afterlife…and you are supposed to be a Roman Catholic? What a hypocrite!

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