Montpelier – The latest data from the Vermont Agency of Education shows a small decrease in projected education spending and affirms previously anecdotal evidence on the major factors causing a projected increase in education property taxes.
Health care costs, construction, special education, disappearing federal money and increased salaries are all contributing significantly to a projected $230 million increase in education spending, from $1.71 billion in fiscal year 2024 to $1.94 billion in fiscal year 2025, according to the agency’s survey.
Using new budget information from late January and early February, the average education property tax bill is now projected to rise 19% rather than 20%, a product of about $15 million less needed to be raised by the education fund. The revised number is a result of some school districts shaving money from their budgets, as well as updated education fund data.
Costs related to retaining staff once paid for by federal funding increased more than 150%, a total increase of about $15 million in the districts that provided data.
Total full-time employees remained essentially level year over year, though salaries increased about 8% and benefits increased 33%.
Surveyed districts have added funding for 648 full-time staff related directly or indirectly to mental and behavioral health in the most recent three budget years.
As part of ongoing conversations about how the state could lower education property tax bills, the committee also considered the impact of a “cloud tax,” which would remove a sales tax exemption for software programs stored and accessed over the internet.
The tax, which would raise a projected $20.4 million next year, would bring down the average education property tax bill increase from 19% to 17.6%, according to modeling from the Joint Fiscal Office.
“It’s not surprising but just discouraging how adding 20 million moves the needle so little,” said Rep. Katherine Sims, D-Craftsbury. “The magnitude of this challenge is … enormous.”
