Vermont House Advances Property Tax Bill with 7% Average Increase

The legislation uses surplus General Fund money to buy down rates, but the governor opposes reserving funds for next year.

Mar. 26, 2026 at 10:08pm

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The Vermont House has advanced a bill that would increase property tax rates for education in the next fiscal year by an average of 7%. The legislation uses $52.5 million in surplus General Fund dollars and $22.3 million in unallocated education funds to buy down property tax rates for fiscal year 2027, but also reserves over $52 million to buy down rates next year. Governor Phil Scott opposes the bill, arguing that reserving funds for the following year may disincentivize school districts from cutting costs.

Why it matters

Vermont's public education system is primarily funded through property taxes, which have risen more than 40% across the state in the last five years. Lawmakers are working to reform the system and rein in costs, but the proposed 7% average increase highlights the ongoing challenge of balancing the needs of taxpayers, schools, and the state's fiscal future.

The details

The House advanced the legislation, H.949, with 78 votes for and 61 against. The bill now moves to the Senate. While the legislation uses one-time funds to buy down rates this year, it also reserves over $52 million for next year, which the governor argues may disincentivize school districts from cutting costs. Some lawmakers have also argued that the continued use of one-time funds creates additional pressure on future rates.

  • The legislation will now move to the Senate.
  • The next fiscal year, which begins on July 1, 2027, will see a 7% average increase in property tax rates for education.

The players

Rep. Emilie Kornheiser

The chair of the House Ways and Means Committee, who told House members that her committee 'doesn't see a perfect solution in the short term to meet the revenue needs of our schools' but asked members to support the bill nonetheless.

Gov. Phil Scott

The Republican governor who has made it known that he does not support the bill, arguing that reserving funds for the following year may disincentivize school districts from cutting costs.

Rep. Pattie McCoy

A Republican House member who proposed an amendment to apply the full $105 million in General Fund dollars to buy down rates this year, arguing that Vermonters 'simply cannot afford a 7% increase' to their property taxes.

Rep. Zak Harvey

A Republican House member who spoke in support of McCoy's amendment, saying taxpayers need immediate relief and that reserving funds for next year would send the wrong signal to school districts.

Rep. Angela Arsenault

A Democratic House member who argued that devoting the entire surplus to buy down tax rates with no plan for the following year is 'bad policy, and fiscally irresponsible'.

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What they’re saying

“We are balancing the immediate needs of taxpayers, the unstable future ahead of us and the pressing needs of our children, and we ask for your support.”

— Rep. Emilie Kornheiser, Chair, House Ways and Means Committee

“Vermonters simply cannot afford a 7% increase and the conversation in this building should be about how to drive that percentage down as low as possible.”

— Rep. Pattie McCoy

“If we tell (school) districts now, before they even start their budgeting for next year, that they have a $50 million cushion, much of that money will end up being spent and not returned to taxpayers as relief.”

— Rep. Zak Harvey

“It's bad policy, and fiscally irresponsible.”

— Rep. Angela Arsenault

What’s next

The bill will now move to the Senate for consideration.

The takeaway

The debate over Vermont's property tax bill highlights the ongoing challenge of balancing the needs of taxpayers, schools, and the state's fiscal future. While lawmakers are working to reform the education funding system, the proposed 7% average increase underscores the difficult tradeoffs involved in this process.