Vermont Legislative Joint Fiscal Office

Education

Related Links: House Committee on Ways and Means House Committee on Education Senate Committee on Finance Senate Committee on Education

The Education Fund provides state funding for public education from pre-kindergarten to grade 12. This funding is provided through an education payment and through state categorical aid for special education and other programs. This page contains information regarding the Education Fund and other aspects of the education finance system.

Where does the money for education spending come from?

Two-thirds of funding for education spending is raised from statewide education property taxes. The remaining one-third of funding is raised through a variety of non-property tax revenue sources: including the sales & use tax, one-third of the purchase & use tax, and one-quarter of the meals & rooms taxes. In addition, the Education Fund receives transfers from the State Lottery and reimbursements from Medicaid.

 

The education property tax is split into two categories, homestead and non-homestead. The education tax rate on non-homestead property is uniform statewide. The education tax rate on homesteads varies with per-pupil education spending as approved by voters.

 

Furthermore, homestead properties in Vermont are eligible for an adjustment to the amount of property tax owned based on their household income. About 70% of homestead in Vermont receive this adjustment.

 

How are the education property tax rates set?

On December 1st, the Commissioner of Taxes submits a recommendation to the legislature recommending base education tax rates to fully fund schools for the upcoming year.

 

Generally, the House reviews the Governor’s recommendations and develops and introduces legislation to set education tax rates. The Legislature may propose education finance policy changes as it deems appropriate. The Senate debates and proposes changes to the House bill. Differences between the House and Senate are resolved through a Committee of Conference and the education tax rates for the upcoming year are finalized.