The annual property tax bill was introduced by the House Ways & Means Committee on March 29, 2023. This bill sets the yield amount for homestead property tax rates (key determining factor in local property tax rate calculations) and also sets the non-homestead property tax rate.

Representative Beck presented the bill on the floor Monday. Major changes from the Senate involved a slightly increased average tax increase and a reduction in the tax newly-created reserve to help buffer property taxes in FY2025. In the Senate version, this fund was reduced from $22M to $13M.

The Senate Finance Committee reconvened on Wednesday to review their changes to H.492, which sets the annual property tax rate calculation. The draft changes would decrease the income yield to $17,537 and the property value yield to $15,443. It’s worth noting that decreasing the yield will increase local tax rates. The non-homestead property tax rate would be increased from $1.388 to $1.391.

The Senate Finance Committee had been kicking around the property tax bill, H.492, for a couple weeks and circled back again on Friday. They also had a fresh Education Fund Outlook to look at. The Senate’s version did not include cannabis retail taxes and had a slightly higher average property tax bill. It also had a slightly lower carry-over from the previous year based on the latest projections.

On Tuesday, the Senate Finance Committee took up H.492, which sets the property tax yield amounts that determine local property tax rates. Representative Kornheiser and Representative Beck from House Ways & Means joined the Committee to explain the bill.

Legislative Counsel walked through H.492 on Thursday with the Senate Finance Committee, noting the modest (3.84%) increase in expected tax bills on Vermonters. There was a debate about what the purpose the December letter from the Tax Commissioner was (this is a letter that estimates the state yield amount that is sent to the legislature and school districts at the end of each year). Chairwoman Cummings clarified that it was meant to be a tool for school boards and voters to understand the tax rate impacts of their school budgets. A new thing this year is that $22M was set aside in a reserve fund in case a property tax buy-down is needed next year.

The House took up a bill, H.492, on the floor Thursday that sets the statewide yields which determines local property tax rates. The average rate would decrease in FY2024, but much of that decrease will be “masked” by the Common Level of Appraisal (the leveling mechanism to account for disparities between when towns last did an appraisal) and school district spending.

On Tuesday, the Joint Fiscal Office (JFO) and the Agency of Education (AOE) provided their customary update to the House Ways & Means Committee. Chairwoman Kornheiser shared that she had asked JFO to include a new line item for cloud taxes, which would amount to $16.9M in revenue if added. This addition would result in a 5% increase in average property tax bills if coupled with the additional spending items the Committee is considering.

Brad James shared with the House Ways & Means Committee on Tuesday that 93% of budgets are in and education spending is now projected at 7.8%. The December letter originally projected 8.5%. Burlington is still not in yet, and this has the potential to move the needle. Milton also out, their building manager has been out sick.