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.

The Senate Finance Committee met on Wednesday to discuss the impact of rapidly increasing housing costs. Chairwoman Cummings teed up the conversation by stating that some towns, like Stowe (as example) are seeing the number of people who qualify for income sensitivity drop, by no fault of their own. In some cases, homes have increased from $400K to $600K two years later (there is a $400k cap on house site value for income sensitivity). She mentioned the legislative goal of 80% of taxpayers being “income sensitized” (meaning they qualify for the property tax credit) and the state is now down to 64%. She was seeking solutions for how to address this long term.

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.

Brad James (Finance Manager, Agency of Education) joined the Committee on Tuesday. He informed them that all but three districts have reported their budgets so far and the remaining ones were very small. He noted that if they assumed the remaining districts came in at the statewide average, the overall average spending increase would come out just under 8%.

The House Appropriations Committee met to review H.480 on Wednesday. The bill proposes to remove municipalities from the property reappraisal process and require instead that the Division of Property Valuation and Review within the Department of Taxes conduct full and statistical reappraisals on behalf of all municipalities in the State.

The legislature formed a task force during the 2021 session to study pupil weighting factors that determine the tax rates and spending ability of local school districts. This is not the first time that the issue of pupil weighting factors has been discussed or studied.