Per-Pupil Education Spending and Tax Rates, Fiscal 2015
Vermont’s education funding system ensures that all students, regardless of the wealth of their communities, have equal access to money to support their education. The state could simply allocate the same amount of money for every student. But Vermont has a long tradition of local control, which would disappear if spending decisions were dictated from Montpelier. To balance equal access to resources with local control, the system creates a level playing field for all communities to raise money for education, but local voters have the final say about how much they spend.
Vermont’s school funding system also is equitable for individual taxpayers. Resident homeowners choose to pay school taxes on their primary residence and up to two acres of land based either on the value of that property or as a percentage of their household income. But regardless of individual choices for property or income, in communities with the same spending per pupil, the tax rates are the same for all taxpayers.
Each year—preferably before Town Meeting Day—the Legislature specifies a base amount per pupil and base tax rates for both property and income. In effect, the Legislature sets the property and income rates for each $1,000 of per-pupil spending. The rates per $1,000 are the same for every community, but each community determines its own level of spending—and therefore its own total school tax rates.
In fiscal 2015, for each $1,000 of per-pupil education spending 1, the property tax rate is a little more than 10 cents, and the income rate is a little less than 0.2 percent of household income. If a town decides to spend 10 times that amount ($10,000 per pupil), the property tax rate will be a little more than $1.00 and the income rate a little less than 2 percent. (See Maidstone, for example.)
Tax rates and per-pupil spending can be seen in the town2town map. The map shows that towns with higher per-pupil spending have higher tax rates and those with lower spending have lower tax rates. The differences are proportional. If one town spends 25 percent more per pupil than another town, its tax rates will be 25 percent higher.
As you hover your cursor over a town, you see four figures for fiscal 2015 for that town:
- “$xx,xxx.xx per pupil” — Education spending per pupil used to calculate the town’s property and income rates.
- “x.xx% income rate” — Percent of household income paid by those who pay school taxes based on their income.
- “$x.xx FMV prop. rate” — Property tax rate if all of the property in town were assessed at fair market value (FMV); also known as the equalized property tax rate. This rate is the same in all towns with the same per-pupil spending.
- “($x.xx actual prop. rate)” — Rate appearing on the local property tax bill, based on the locally assessed value of the property rather than its FMV. Because the grand list in many towns is above or below fair market value, these rates are not comparable in towns with the same per-pupil spending.
- A subset of the total school budget defined as “education spending” is used to determine per-pupil spending and tax rates. Expenditures covered by federal funds, endowments, local fundraising, grants, and state programs such as special education are not counted as “education spending” and do not affect the property or income-based school tax rates.[↩]