Vermonters can pay school taxes based on income or property value, many pay some of each

There are also inequities in who pays school taxes. Vermont’s funding system gives resident homeowners the option to pay school taxes based on their income or the value of their homes. Built into the system are thresholds on income and home values that require some low- and moderate-income people to pay both a school income tax and property taxes on a portion of their home’s value. 

The thresholds create tax “cliffs,” where an extra dollar of income or a property reappraisal can have disproportional tax consequences. The thresholds have not been raised or adjusted for inflation in years. And because incomes and property values have grown, more and more Vermonters are hitting these cliffs. Homeowners who cross the $47,000 income threshold can see a school tax increase of 10, 15, 25 percent or more. A family with a $350,000 home that crosses the $90,000 income threshold could see a 70 percent jump in school taxes. 

Data source: 32 V.S.A. § 6066