Making Vermont Affordable

While I was the Mayor of Montpelier, during the height of Covid, I oversaw the lowest percentage tax increase in the prior decade. Why? Because that is what Montpelier needed at that point. They needed a break. And that is true now for working and middle class Vermonters across the state. 

One thing became clear during the last session: our education funding and property taxes have not landed in a sustainable place. Property taxes, which are mostly made up of education funding taxes, are a major expense for household budgets, and while I support the idea of everyone contributing to make our school districts strong and equitable, many Vermonters are at or beyond the limits of what they can afford for property taxes. So what do we do? Below are ideas that I would like to explore to potentially lower education taxes or property taxes in general for middle class and working Vermonters. 

1. Break up the non-homestead tax into its component parts, so that we can tax 2nd homes and/or mansions at a higher rate than others. I believe that if people can afford a 2nd home (hunting camps wouldn't count) or a mansion, then they can probably can pay more, thus lowering the needed taxes from everyone else. 
2. Shift to an income-based education tax. There's already been a lot of work on this idea, as outlined in this report. The conclusions in the executive summary are one potential road map to a simpler, fairer, more progressive funding stream. Right now most Vermonters are "income sensitized" meaning that their property taxes are reduced because of their income, but the amount that they are reduced is capped and that creates "bumps" and "cliffs" in the benefits depending on your income. So an income based education tax would be a more sensitive tool for creating equitable contribution.  
3. I'm also interested in exploring the possibility of a spending cap for districts, which as I understand it has been successfully used in other other states. I'm hesitant about this one particularly because I believe that school districts may have good reasons for exceeding a cap, but I at least want this idea on the table and see how well it has worked for schools in New York. 
4. Much of the education property taxes are heath care related, so if we can make health care more affordable, then we can make education more affordable. To that end, I'm interested in reference based pricing for health care, which should reduce the cost of healthcare, not just for educators, but for working Vermonters in general. The Auditor had a great report on this a few years ago, and then updated this info in this memo, which says that Oregon has implemented reference based pricing and as a result saved $112 million dollars in 2021. 
5. I'd like to close the funding formula loophole that rewards districts for closing schools, or put another way, forces districts that operate schools to subsidize districts that don't operate schools. I actually proposed this change to the senate finance committee this past year, and was told that they would study it and potentially include it in a future year.

Additionally, I am supportive of adding a fifth tax bracket to ask Vermont's wealthiest residents (those who make over $500,000 per year) to contribute more of their income to state programs. 

I deeply believe that we have enough resources in the state to meet our needs, but we have significant imbalance in the distribution of wealth. So when households making over $500,000 are contributing a smaller percentage of their income than those making under $100,000, that's a problem. 

These are just some ideas that I'm working on, and I'm open to whatever practical suggestions you may have to make property taxes more affordable to working and middle class families. These ideas I've listed here may be the right ones and they might be the wrong ones, but either way, we need to find some solutions to get financial relief to Vermonters.