Issue brief: Education finance and property taxes

By John McClaughry

In 1996 the Vermont Supreme Court issued the Brigham Decision, which required that there be “substantially equal education tax resources in every district.” (Note: It does not guarantee equal spending on or opportunity for students.)

In response, the Legislature passed Act 60 in 1997, which, in simple terms, gives the voters of 256 school districts the responsibility for approving local school budgets, and a (then) newly established state education fund the responsibility for funding them.

Money sources for the education fund include property taxes (homestead and non-homestead), a general fund transfer, sales and motor vehicle purchase taxes, lottery profits, and some miscellaneous funds.

However, homestead property taxpayers with household incomes of less than $90,000 are “income sensitized” and are allowed to pay their property taxes as a percentage of income (1.8%). Roughly 70% of Vermont homesteads are income sensitized.

The major consequence of Act 60 has been breaking the link between what local voters choose to spend on their schools, and the responsibility for paying those bills. Now the school money drops from the sky (the Education Fund), and the costs may bear little relationship to the amount of taxes levied on local homestead owners.


  • Since the passage of Act 60, annual education spending has risen from roughly $780 million to over $1.5 billion.
  • Public K-12 student population has dropped from 106,000 to under 87,500.
  • Public K-12 staff has grown 17.1% from 15,783 (1997) to 18,482 (2012). According to NEA statistics, Vermont has the lowest student teacher ratio in the nation at 9.2 to 1. The national average is 15.9 to 1.
  • Despite all of this, student SAT scores have remained largely flat, NECAP scores show that an alarming number of students remain “below proficient” in Math, Reading and Science, and no progress has been made in bridging the achievement gap between poor and more well off students.

John McClaughry is vice president of the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Flickr/

5 thoughts on “Issue brief: Education finance and property taxes

  1. All Smoke and Mirrors for the Money.
    The selfish self-sustaining public school union monopoly is a totally broken system to where the overinflated number of dollars and over-inflated number of students is the main objective verse educating the future of our community and nation to the fullest extent possible.
    We’ve noticed incompetence in school management to where parents are extracting their children from these cesspool schools to home school their kids and achieve a better future for them.
    These parents succeed without a college degree by producing some of the most intelligent children in Vermont. We keep asking ourselves how this is possible all while paying their share of ridiculously high education taxes.
    In reality, the exodus of students is much higher.
    In our rural town, the change in the number of students in the past 12 years has decreased by approximately 40%, plus they now count part-time 3-4 yr old preschoolers in the full count!
    It’s unsustainable to where there must be a complete overhaul of the dysfunctional system!
    Vermonters are paying ridiculous property taxes for a selfish system that is concerned for its own self-interests.
    The current exclusive system takes away from the community as a whole as it seems like we’re just existing verse living life under the exorbitant taxes imposed for a mediocre education system.
    Oh, what we could do with the millions in savings from creating an Independent school system in which building of community recreational facilities with community meeting/learning centers plus possibly a pool to enjoy life and be much happier as a fulfilled community.
    The money saved could also be utilized by replacing or refurbishing some of the outdated dinosaur-era buildings these children attend.
    Hopefully, folks will awaken sooner than later as it’s getting difficult for the system to hide the true low numbers while doubling the costs (Smoke and Mirrors) as time keeps ticking by quickly for the future of our children to succeed in having a happier and much more rewarding life.

  2. Number of students is down and expenses have almost doubled. So where are they wasting all the excess money we have to pay. They never teach “How to live within your means”… Probably never ran a business where you had to make things work, not just expect others to just pay more. So the number of students have decreased substantially and the cost has increased 50%, the projected number of students is inflated, and I was your boss, YOU WOULD BE FIRED….
    Most people don’t know the different between “Educated” and “Smart”.
    Which one would you want spending your money???

  3. Re: Public K-12 student population has dropped from 106,000 to under 87,500.

    Actually, John, Vermont PK-12 2021 enrollments are reported to be only 78,928. The 87,500 enrollment number must be the State’s Equalized Student Enrollment count that artificially inflates actual enrollment numbers by counting certain students as more than one student.

    • And while nearly 90% of these students graduate, barely half of them reach grade level proficiency in reading, writing, math and science.

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