Breaking down the vote on H.887 to fund schools
June 25, 2024 | By Rep. Theresa Wood As your state representative, I have a responsibility to be accountable. I have received emails from constituents asking how I voted during the recent veto session, unhappy with the results of the “yield bill” which impacts local property tax rates. I also received many more emails prior to the veto session, asking me to vote to override the governor’s vetoes on several bills, including the “yield bill.”
I work to make decisions considering the overall impact for my constituents and the state as a whole. The one thing that I hope all Vermonters understand is that there are no simple or perfect answers to these complex issues. The legislature voted on six bills last week, I’ll provide information on the other bills in a separate article. Below is information on H.887 – the “yield bill,” as that is the one most people have asked questions about.
H.887 is the bill used in setting property tax rates across the state that help to fund education services for Vermont students.
First, a few facts:
School budgets are developed locally by each school board in every district across the state; they are voted on locally. The legislature does not vote on school budgets, but is required to fund them.
The legislature needed to pass a “yield bill” otherwise an estimated $82 million deficit would have occurred in the Education Fund.
Property taxes are not the only funding source for education expenses:
Homestead property taxes – fund 25% of education
Non-homestead property taxes – fund 41% of education
Sales tax and other consumption taxes – fund 32% of education
Lottery and other miscellaneous revenue – fund 2% of education
The legislature DID NOT vote to increase property taxes. It voted to decrease property taxes from the 20% amount estimated in December down to approximately 13.8% -- yes, it is still too high.
Two-thirds of Vermonters pay their property taxes based on income. If you have not applied for income sensitivity, you can still do so until Oct. 15. See this website: Homestead Declaration | Department of Taxes (vermont.gov). This will help you pay your property taxes.
Vermont property values have skyrocketed during and since the pandemic. This is good news if you are selling your house, but not as good if your property is “undervalued” by the current town assessment of its value. The “common level of appraisal” is set by the Department of Taxes and impacts all towns and property owners.
The Department of Taxes completed an equalization study to determine the common level of appraisal for each town. You can see the actual sales data for every town and see how this study has impacted our communities. Here is the link to the study and data: Equalization Study | Department of Taxes (vermont.gov)
The Tax Department also has information on understanding your property tax bill, as it contains a lot of information. Find that explanation here: Understanding Your Property Tax Bill | Department of Taxes (vermont.gov)
Vermont’s education financing formula is complicated because it seeks to be as equitable as possible. Should equity outweigh the ability of citizens to understand it? Current feedback is maybe not.
I voted in favor of H.887. To be absolutely clear, I did this with no great joy in overriding the governor’s veto. I did it because:
Legally the legislature has a responsibility to fund school budgets that have been voted on by local voters. The bill fully funds school budgets that voters have approved.
A commission on the future of public education is established, requiring public hearings in all 14 counties. This information is required to be reported back to the legislature and will help the body make decisions to right-size our education system in a way that balances quality education with ability of taxpayers to pay for it.
The bill reduces property taxes by applying $69 million to do so.
I did not agree with the governor’s late-coming proposals to utilize a lending/borrowing scheme with school districts that the state treasurer testified would negatively impact the state’s bond rating – increasing the cost for every municipality or government entity seeking to borrow funds. It takes years to recover from a negative bond rating.
I did not agree with the governor’s proposal to entirely deplete the education reserve fund and use significantly more one-time funds. These funds are used when a recession results in lower property values or other issues that impact the education fund. The governor’s proposal for additional use of one-time dollars could result in a 20-cent increase to property taxes next year. Again, a negative impact.
I did agree with the governor on the use of some limited one-time dollars to offset the tax increase. The legislature does not ordinarily utilize one-time dollars for ongoing expenses, but given the impact this year, we agreed to do so with reservation.
If we think Vermont is immune from the divisiveness of the national political scene, it is not. Day in and day out during the legislative session, representatives and senators of all parties work collaboratively, not always agreeing, but doing so respectfully.
In my nine years serving in the legislature, I have always kept my updates non-political, opting to report on the policies, programs and impacts on people. However, I am compelled to veer away from this as it relates to the rhetoric that is coming from the governor’s office on the yield bill. And I only do this because of the lack of complete transparency about the impact of the proposals and the name-calling by the governor has resulted in state legislators receiving actual death threats. I get that people are upset, and I am truly sorry for that. Sometimes doing the responsible thing is not the popular thing, and such is the case on this vote.
Rep. Theresa Wood
State Rep. Theresa Wood, a Waterbury Democrat, is one of two representatives in the Washington-Chittenden district representing Waterbury, Bolton, Huntington and Buel’s Gore. She chairs the House Committee on Human Services. Reach her at twood@leg.state.vt.us.