town2town: 3 Vermont school tax questions answered
Vermont’s education funding system is built on fairness for students, fairness for taxpayers, and local control. The statewide tax base supports school spending voted by each community. Each school district in Vermont sets its own budget and spending per pupil on or around Town Meeting Day. And all school taxes go into a single pot, the Education Fund. The Legislature sets a school tax rate schedule that applies to primary residences in all towns, so residents know their school tax rates based on their town’s voted per-pupil education spending.
There are two rates—one based on the value of the home and the other based on household income. Residents can choose the better deal for them, and most Vermonters pay the income rate for all or some of their school taxes. Towns with more spending per pupil have higher tax rates; those with less spending per pupil have lower rates; and towns with the same per-pupil spending have the same rates.
The system effectively equalizes the taxing power of all communities. Regardless of the actual wealth of any community, every town has to make the same tax effort—i.e. have the same tax rates—for each $1 of funding it votes per pupil.
Below are an interactive map and charts showing school income and property tax rates for all towns from school year 2012-13 to 2020-21. Select a town and year and see the current rates and spending relative to other towns, and how those rates have changed over time.
1. How are Vermont school tax rates calculated?
Total education spending is what’s left in the budget after subtracting categorical aid and expenses paid with federal grants and non-tax revenue. It’s about 83% of the total education budget.
Equalized pupils are the number of students in a school after weighting adjustments are made across the state, and can be higher or lower than the actual pupil count.
Per-pupil education spending is calculated by dividing total education spending by equalized pupils and is used to determine the town’s property and income rates.
Your town’s tax rates are the income and property rates associated with your town’s per-pupil spending from the state tax rate schedule, either the percent of household income paid in school taxes or the tax rate per $100 of property value.
2. How does my town compare?
Note: Tax rates for the independent school districts (Essex Junction, North Bennington, Orleans, Underhill ID, and Wells River) are not broken out in the map or in the charts below.
Per-pupil education spending is calculated by dividing total education spending by equalized pupils and is used to determine the town’s property and income rates.
Income rate is the percent of household income paid by those who pay school taxes based on their income.
Fair market value property rate is the tax rate per $100 of property value if all of the property in town were assessed at fair market value; also known as the equalized property tax rate. This rate is the same in all towns with the same per-pupil spending.
Actual property rate is the tax rate appearing on the local property tax bill, based on the locally assessed value of the property rather than its fair market value. Because the grand list in many towns is above or below that value, these rates are not comparable in towns with the same per-pupil spending. Temporary merger incentives from Act 46 of 2015 also affect the actual rate in some towns.
3. How has my town’s school tax rate changed over time?
Income rate is the percent of household income paid by those who pay school taxes based on their income.
Fair market value property rate is the tax rate per $100 of property value if all of the property in town were assessed at fair market value; also known as the equalized property tax rate. This rate is the same in all towns with the same per-pupil spending.
