MONTPELIER — A bill approved by the Vermont House Ways and Means Committee would set the state education property tax for fiscal 2022 — estimated at a 9 cent per $100 in valuation increase in December — at a 1-cent increase instead.
The committee draft bill, approved unanimously on Wednesday, set the property dollar equivalent yield at $11,385 and the income dollar equivalent yield at $13,572. That would result in a homestead property rate for fiscal 2022 of $1.546 per $100 of equalized education property value. The non-homestead rate would be $1.636 per $100 of property value.
The income sensitive figure would be 2.60 percent of household income, up from 2.51 percent, committee member state Rep. David Durfee said.
The fiscal 2021 rates were $1.538 per $100 for homestead filers and $1.628 per $100 for non-homestead filers.
“This is the first step in a process, but it was intended to signal that the rates projected in the Dec. 1 tax letter are no longer the best estimate of where things will settle out once all the budgets are finalized,” Durfee, D-Shaftsbury, said.
By statute, the office of the state Tax Commissioner must file a letter estimating the property tax rate on Dec. 1 so state and local school district budget writers can begin the work of planning for the fiscal year ahead. At the time the state Education Fund faced a deficit of $58 million, and an average increase of 9 cents per $100 in valuation was forecasted.
Thanks to higher than expected sales tax revenues, the Education Fund now sits at an $18 million surplus, and committee members decided to apply that surplus to lower the projected tax increase.
“The forecast changed dramatically and the school budgets are being finalized and in some cases already finalized. So our concern was voters may have heard the 9 cent increase and might be focused on that,” Durfee said. “We thought it would be helpful to share this more up-to-date information now with the public, not only with boards but also with voters.”
The bill likely won’t be passed by the full Legislature soon, Durfee said. “It’s likely to sit in the Education Committee until we have even more information,” he said.
That said, “there was no reason at all to keep this from being shared with everyone,” Durfee said.