WHITE RIVER JUNCTION – The past Town Assembly session was a particularly challenging one for the public officials who oversee Vermont’s school budgets.

Fears of rising costs, expiring pandemic-era federal aid and confusion over the state’s new funding rules forced some communities to postpone votes on education spending to give local officials more time to finalize budget proposals.

Across the state, voters rejected a number of school budgets because they were concerned about the fiscal impact.

In Hartland, voters needed three attempts to pass a budget for the upcoming school year.

Residents requested a revote after a budget was passed that would increase the city’s property taxes by nearly 30%.

The applicants were successful and voters ultimately approved a slightly lower budget of $1 million.

In the end, it hasn’t provided any significant relief to property owners. The city’s new education tax rate – set last month by the state’s tax office – is just 2 cents lower than it was originally, a $70 difference in the tax bill on a $350,000 home.

As usual, the specifics of the tax rates set this summer vary considerably from city to city, even within the same school district. (And while the education tax makes up the largest part of the annual property tax bill, there are municipal budgets that contribute to the overall bill.)

This year, two factors – rapidly rising property values ​​and changes in the state’s funding formula – played a major role in determining tax rates, which saw dramatic increases and decreases in Upper Valley communities.

Outdated real estate values

While some tax rate changes reflect increased school spending, many cities have been more affected by recent increases in real estate prices or recent changes in per-pupil state funding, according to school administrators in Upper Valley districts.

Take the four Upper Valley communities – Woodstock, Pomfret, Barnard and Bridgewater – that are part of the Mountain Views Supervisory Union.

In March, member city voters approved a $29.8 million budget for the 2024-2025 school year, a 14.6% increase over the same period last year. However, Mountain View’s member cities’ tax rates varied significantly.

Woodstock’s new tax rate is $2.63 per $100 of assessed property value, a 62-cent increase from last year. That’s the largest increase among Vermont’s Upper Valley communities.

Pomfret saw an increase, but not nearly as much. The tax rate of $1.66 was 20 cents higher than last year.

But Barnard’s new rate of $1.60 represents a 39 cent reduction from last year.

And Bridgewater’s new tax rate of $1.40 represented a 47-cent reduction.

The significant tax increase in Woodstock is largely due to the fact that the property values ​​the city uses to calculate tax assessments are out of date. Property values ​​in Woodstock have increased 100% in the last five years, said Jim Fenn, finance director for the Mountain Views Supervisory Union.

In Vermont, the state uses a metric called the Common Level of Appraisal, or CLA, to measure how close a town’s overall property valuation is to market value. In Woodstock, the CLA is only 64%, while the goal is closer to 100%.

Vermont towns transfer taxes collected for schools to the state education fund, which then distributes the money to school districts to help pay their annual budgets. A lower CLA results in a higher tax rate to adjust the town’s undervalued assessment to market value.

This adjustment is intended to ensure that municipalities pay their fair share of taxes to the state education fund.

Woodstock, which last underwent a citywide reassessment in 2016, is scheduled to reassess next year, according to city records. The reassessment is expected to take two years.

Barnard and Bridgewater were among six towns in Vermont’s Upper Valley that completed reassessments this year, according to the state tax agency.

In Hartford, a single-city school district, the new property tax rate is $2.05, an increase of 27 cents.

In April, Hartford voters approved a 7% increase in the district’s operating budget for the current school year, in addition to a $21 million bond for repairs and improvements to the district’s facilities.

Like Woodstock, property valuations in Hartford are well below market values. Hartford currently has a CLA of 66%, a decrease of 11 percentage points since last year.

Hartford last assessed its properties in 2017 and will begin a reassessment next year.

In Norwich, the new education tax rate is $2.32 per $100 of assessed property value – an increase of 33 cents from the previous fiscal year.

That equates to a tax increase of $1,650 on a $500,000 home.

In March, Norwich voters approved an $8 million budget for the elementary school, which includes grades preschool through 6, and a $30 million budget for the interstate school district the city shares with Hanover, which will operate Richmond Middle School and Hanover High School.

Norwich’s CLA is 64%.

New financing formula

The three Vermont towns in the Rivendell Interstate School District — Fairlee, West Fairlee and Vershire — all saw significant cuts to new tax rates, despite a 6 percent budget increase approved by voters in June.

Fairlee’s new fare is $1.35, a 35 cent reduction.

The fare in West Fairlee is $1.78, a reduction of 46 cents.

Vershire’s new rate is $1.27, a rate reduction of 94 cents and the largest decrease in Vermont’s Upper Valley communities.

The declines in the towns surrounding Rivendell are largely due to Act 127, which took effect this year and changes the state’s per-pupil funding formula to give more money to school districts that serve larger numbers of students who live in poverty, are learning English as a second language or live in rural areas.

The White River Valley Supervisory Union serves 11 towns, including Bethel, Chelsea, Royalton, Sharon, Strafford and Tunbridge in the Upper Valley.

In March, voters in Royalton and Bethel, which share a school district, approved a $14.4 million budget, a 10% increase from the previous year. However, the budget’s impact was mitigated by an increase in state funding through Act 127.

This school year, the consolidated school district has 1,095 equal students, a rate used to determine supplemental funding, which is 529 more equal students than the previous school year.

As a result, Royalton’s tax rate decreased 4 cents from last year to $1.52 per $100 of assessed property value. Bethel’s tax rate remained the same as last year at $1.50 per $100 of assessed property value.

In Thetford, the new law has had exactly the opposite effect.

In March, voters there approved a $10.1 million operating budget, an 8% increase from the previous year. However, the new property tax rate increased by 26%.

The rate increase was necessary to offset a reduction in the district’s share of state funding resulting from formula changes made by Act 127.

According to the district’s February annual report, Thetford’s per capita state funding was expected to drop 20% this year because of a smaller percentage of students in the district who need additional support.

For a complete list of educational property tax rates for each city in the State of Vermont, visit the Tax Department website at https://tax.vermont.gov.

Patrick Adrian can be reached at [email protected] or 603-727-3216.