Problems old and new undermine fairness for some taxpayers and districts

Vermonters have been understandably upset by the abrupt rise in their school taxes for fiscal 2025. Most of the complaints focus on the rise in spending, as does the response from policymakers. But taxpayers may also be affected by changes that make the funding system less fair.

The Agency of Education presented some clear analyses last spring explaining the main reasons for the spending increase: rises in salaries and benefits in response to inflation; health insurance cost increases exceeding inflation; the expanding need for expensive mental health services for students; the loss of federal funds the schools received as part of the pandemic-related American Rescue Plan Act (ARPA). There are other reasons as well, related to fiscal decisions made in the past few years. The expenditures are critical for providing kids with a quality education. But knowing that doesn’t make the tax bumps easier to take. Even modest increases can be a problem if the costs, and who pays them, are not distributed fairly.

In fact, some districts and taxpayers have been facing disproportionately higher bills for a while.

Vermont median household income rose to $81,211 last year—a 5.4 percent increase, after adjusting for inflation. Half of Vermont’s 280,000 households earn less than the median and half earn more. The rebound followed a drop in real income—that is, a loss of buying power after adjusting for inflation—in 2022.

The one-year increase led the other states. Vermont also saw growth of 7.8 percent in median household income from 2019, before the pandemic, through last year—the nation’s greatest rise during that period.