Balancing the Books: What a Proposed New School Spending Bill Means for Your Taxes
The bill uses a formula called the Allowable Growth Percentage (AGP). It doesn’t treat every town the same. Instead, it tries to “level the playing field”
Vermont is facing a serious math problem. Over the last five years, education property taxes have jumped by more than 40%. This year, homeowners are staring down a potential 12% increase.
To address this, state leaders are debating a new proposal called Senate Bill S.220. If passed, it would change the way school budgets are decided, moving the final word from local town meetings to a set of state-mandated limits.
Why are costs rising so fast?
It isn’t just one thing driving the $115 million increase in school spending this year. It’s a combination of “non-negotiables”:
Healthcare: Insurance premiums for teachers and staff have surged statewide.
Inflation: Everything from heating oil for the gym to the bread for school lunches costs more.
Staffing: With a shortage of teachers, many districts are paying more to attract staff or relying on expensive emergency contracts.
Governor Phil Scott has proposed using $75 million in state surplus money to help lower this year’s tax hike. However, many lawmakers say they will only agree to use that “one-time” money if the state passes S.220 to keep future spending from spiraling again.
The Proposed Solution: A “Hard Cap”
Right now, Vermont has a “penalty” system. If a town spends too much, the state adds a surcharge to their tax rate. Voters can choose to pay that penalty if they really want a certain program.
S.220 would replace that “penalty” with a “Hard Cap.” Think of it like a speed limit versus a speeding ticket. Currently, you can speed if you’re willing to pay the fine. Under the new bill, the car simply wouldn’t be allowed to go over the limit.
How the “Allowable Growth” Formula Works
The bill uses a formula called the Allowable Growth Percentage (AGP). It doesn’t treat every town the same. Instead, it tries to “level the playing field”:
High-Spenders: Towns that already spend a lot per student would be “capped” at a very low growth rate (like 0% or 1%). If their costs go up by 5% but their cap is 1%, they must cut programs or staff to fit.
Low-Spenders: Towns that have historically spent very little would be allowed to grow their budgets more quickly to catch up.
The 2028 Goal: A Single Tax Rate
Why is the state doing this now? The answer lies in Act 73, a law that kicks in fully by 2028.
Under Act 73, Vermont will move to one single, statewide property tax rate. In this new system, if your neighbor’s town decides to build a brand-new stadium, your taxes go up too.
Lawmakers worry that once we have a shared tax rate, towns will lose the incentive to keep their own budgets lean. S.220 acts as the “emergency brake” the state believes it needs before that statewide rate begins.
Important Issues to Watch
While the bill aims to stabilize taxes, research into the details shows a few areas of concern:
The “Weighted” Student Math: Vermont recently changed how it counts students to give more support to those in poverty or learning English. Because the spending caps are based on “per-pupil” costs, a change in a school’s student population—rather than its actual spending—could accidentally trigger a cap.
“Baseline Puffing”: Since the caps start in 2028 based on current spending, some fear school districts might spend more in 2027 just to set a higher “starting point” before the limits lock in.
Local Control: For generations, Vermonters have decided their school budgets at Town Meeting Day. This bill effectively moves that power to Montpelier, as school boards would be legally barred from presenting a budget that exceeds the state’s growth cap.
What Happens Next?
The bill is currently being debated in the Senate Education Committee.
The Governor wants these caps as a condition for tax relief.
The Teachers’ Union opposes them, arguing for an income-tax-based system instead.
The House is still skeptical about how these caps might hurt local classrooms.
A final decision is expected by the end of the spring legislative session.
On its face, this looks like one more attempt to break the equity work that helped rural communities. It will benefit large districts, that typically have lower per-pupil costs because they have more pupils. It also completely ignores the real challenge of uncontrolled costs like healthcare and inflation; these increases can be spread across more students in larger districts. If I am right, then it is another case of Phil Baruth watching out for Chittenden County schools at ht e expense of the rural areas of VT.