By Tom Ayres, Vermont Standard Senior Staff Writer
Primary homeowners in the area are faced with a vexing challenge that is impacting virtually every community in Vermont: soaring homestead education taxes that are reaching new heights in the current fiscal year.
A pair of factors — rapidly increasing property values, as reflected in townwide reappraisals conducted in four communities in the region this year, plus changes in the state’s funding formula for education — have sparked significant increases in school tax rates regionwide. Homestead taxes have increased an average of 25.8% across eight municipalities in the Upper Valley, with a jump over last year ranging from 13.8% in Pomfret to 36.1% in Plymouth.
Four communities in the area — Barnard, Bridgewater, Reading, and West Windsor — underwent townwide reappraisals earlier this year and four others are slated for reappraisal in the next one to three years — Hartland, Plymouth, Pomfret, and Woodstock. The towns that have undergone reappraisals to date have seen outdated property values give way to substantial increases in the appraised worth of homestead properties. The state uses a formula called the Common Level of Appraisal (CLA) to estimate how close a town’s property assessments are to fair market value, which has risen markedly since the COVID-19 pandemic, with its attendant, dramatic influx of new residents and second homeowners into the state.
In Woodstock, as the chart below illustrates, the CLA is just below 64%, while the optimum is to have a CLA closer to 100% of the estimated fair market value of properties statewide. Homestead taxes raised by Vermont towns are sent to the state education fund, which in turn distributes the money to individual school districts to fund their annual budgets. Municipalities with a low CLA pay a higher tax rate to bring a town’s under-valued property assessments in sync with current market values in Vermont. In addition to Woodstock, which has seen real estate values increase by as much as 100% since 2019, Upper Valley communities with low CLA rates include Plymouth (62.25%) and Hartland (69%). This has had a major impact on the 2025 tax rate increases in the two towns of 36.1% in Plymouth and 26.6% in Hartland. The unprecedented spike in school taxes has met with strong reaction at the polls: Hartland voters, for example, rejected budgets for the town’s sole school — Hartland Elementary School — twice in March before okaying what district administrators termed a last-chance, bare-bones budget in April.
Increases in homestead tax rates — or decreases in only a handful of cases statewide — are also pegged to Vermont Act 127, a law passed in the 2023-24 legislative session that went into effect July 1. It changed the state’s per-pupil funding formula with the intent of allocating more money to school districts with a higher number of students living in rural communities, struggling with poverty and economic disenfranchisement, or learning English as a second language. This change in the school funding formula, like the CLA, has had a particularly deleterious impact on so-called “gold towns” such as Woodstock and Killington, both of which have been adversely impacted by the changes enacted under Act 127. The funding scheme is particularly impactful on destination or tourism-driven communities such as those two towns, which have well over 60% of their properties owned by out-of-state and second homeowners, who do not pay homestead school taxes. Those taxpayers instead pay a non-homestead tax that state legislators set at a markedly lower rate each year, given that out-of-staters and second homeowners from elsewhere are not sending their children to local public schools.
Remarks by Woodstock Town Selectboard members reflected area-wide concerns when the board unanimously okayed the municipality’s 2025 homestead tax rate at its regular monthly meeting on Aug. 20. “I get a lot of comments on a regular basis about how high our taxes are and this board gets a lot of comments as well,” selectperson Laura Powell offered. “And I think it is important for people to understand that the majority of our taxes come from the state education tax and not from the town. The fact that they are raising education taxes so much this year makes it harder for municipalities such as ours to raise taxes to do the things that we need to do that are so important. So I’d really encourage folks to reach out to their elected representatives in this election year and make it known that this is a real issue. Thirty percent is an unprecedented increase for our residents and it should really be resolved in this next legislative session,” Powell concluded.
Vermont Senate Majority Leader Alison Clarkson and other Democrats in the State Legislature have committed to reexamining the state education funding methodology embodied in Act 127 during the next biennium, which gets underway in Montpelier in January. In addition, a statewide task force is examining means of thoroughly overhauling Vermont’s means of funding public education, shifting the burden to the state from local, homestead-owning taxpayers. The recommendations of that study group, which are expected to be released in December, will also be the subject of substantial discussion in the upcoming legislative session.
