Why It Matters
Vermont homeowners are facing another year of rising education property taxes as the state legislature continues to grapple with a school funding system under significant financial strain. The Vermont House advanced a property tax bill on Thursday that would raise education property tax rates by an average of 7% in the next fiscal year, adding pressure on residents already dealing with more than four decades worth of compounding increases.
The outcome of this legislation will directly affect how much Vermont property owners pay to fund public education, a cost that has become one of the most contentious fiscal issues in the state in recent years.
What Happened
The Vermont House passed H.949 on Thursday, March 26, 2026, advancing a bill that sets education property tax rates for the upcoming fiscal year at an average increase of 7%. The legislation now moves to the Vermont Senate for consideration.
The bill uses surplus General Fund money to buy down education property tax rates, both in the current fiscal year and the next. This approach mirrors the strategy lawmakers used in prior legislative sessions to soften the impact of rising education costs on property owners.
Governor Phil Scott has publicly stated his opposition to the bill. Scott’s position differs from the House approach in a key way: he wants to apply the full amount of the available surplus in the current fiscal year rather than spreading it across two years. His argument is that concentrating the surplus funds now would do more to contain education property tax rates in the near term.
The legislation was advanced through the House Ways and Means Committee, with Rep. Emilie Kornheiser, D-Brattleboro, playing a central role in the committee process overseeing Vermont’s fiscal framework.
By the Numbers
- 7%: The average increase in education property tax rates under H.949 for the next fiscal year.
- 40%+: The cumulative rise in average education property taxes across Vermont over the past five years.
- 2 fiscal years: The span over which the House bill proposes to distribute surplus General Fund money to buy down tax rates.
- 1 fiscal year: Governor Scott’s preferred timeline for deploying the full surplus to achieve greater rate relief immediately.
- H.949: The bill designation for the legislation now heading to the Vermont Senate.
Zoom Out
Vermont’s education funding structure is unusual compared to most other states. Public schools are primarily funded through statewide education property taxes rather than a combination of local and federal sources, making property owners directly and significantly exposed to fluctuations in school spending levels.
The issue is not unique to Vermont in its broader contours. Across the United States, states that rely heavily on property taxes to fund education have faced growing political pressure as home values and school costs have both risen sharply in the post-pandemic period. States including New Hampshire, New Jersey, and Illinois have all seen legislative debates in recent years over how to restructure education funding to reduce the burden on property taxpayers.
In Vermont, the sustained increase in education property taxes has accelerated a broader legislative conversation about fundamental reforms to how the state pays for public education. Lawmakers have been exploring a wide range of structural changes, including adjustments to the school funding formula, spending caps, and consolidation of school districts, though no comprehensive reform package has yet been enacted.
What’s Next
The bill now moves to the Vermont Senate, where it will undergo review and likely committee hearings before any floor vote. The Senate may choose to amend the legislation, and any differences between the Senate and House versions would need to be reconciled before a final bill could be sent to the governor.
Governor Scott’s opposition signals a potential veto fight if the legislature does not adjust the bill to align more closely with his preference for front-loading surplus funds in the current fiscal year. Lawmakers will need to weigh whether to negotiate a compromise with the governor or advance their version and risk a veto.
With the fiscal year deadline approaching, the timeline for finalizing Vermont’s education property tax rates is tight. Both chambers will need to move quickly to resolve the disagreement and deliver a funding framework before the new fiscal year begins.