On Wednesday, representatives from the Joint Fiscal Office briefed House lawmakers in the Committee on Agriculture, Food Resiliency, and Forestry about costs associated with the proposed universal school meals program.

The official estimate from the office says Vermont taxpayers could be on the hook for between $26 million and $31 million to keep universal meals in schools once federal funding dries up.

“All else equal, a fully funded USM through property taxes would result in an approximate $0.03 increase on both the homestead property tax rate and the non-homestead property tax rate,” Julia Richter, fiscal analyst for the Joint Fiscal Office, told committee members.

Julia Richter, fiscal analyst for Joint Fiscal Office

“A penny on both the homestead and the non-homestead tax rate raises approximately, roughly, $10 million dollars,” she said.

According to a study posted at RocketMortgage.com, Vermont ranks 47th in property tax burden. Lawmakers are currently looking for revenue sources to cover the program, including ideas that limit property tax hikes.

“So if there’s no adjustment to the non-property tax revenue sources, then any additional costs that come into the education fund will be picked up by property tax revenue,” Richter said. “… The General Assembly would have to raise property taxes to fund the program.”

Some other possible revenue sources under consideration include a tax on sugar-sweetened beverages, as well as a candy tax, and “adjustments to the sales tax rate and base.”

The federal government covers more than a third of the meals already

Richter explained that the federal government already subsidizes school meals, and families qualify based on income and other factors. She said the cost of this state proposal is essentially the difference between that money received from the federal government and the cost to serve the remainder of Vermont’s students.

The number of students receiving federal dollars may be coming down. The Joint Fiscal Office estimates 38.23% of the state’s students qualified for free or reduced school lunches according to the federal standards in fall 2019. In October of 2022, that number came down to 34.85%.

Richter said recent expansions in federal Medicaid funding may bring this percentage back up again.

“It might fall around 38% [in the next fiscal year]” she said.

77 schools already did universal meals, local communities paid for it

Before COVID hit, some Vermont communities chose to implement a universal meals program. Those 77 schools had to raise their tax rates to fund the meal costs not covered by the federal government.

“The funding for that came from federal programs — there was that community eligibility that I mentioned, as well as Provision 2 (a federal program), and then the difference was made up by local school budgets,” Richter said.

She emphasized that taxpayers that needed to come up with the difference.

“That increase in education spending ultimately affected those school districts’ tax rates,” she said.

From March 2020 to June 2022, the federal government completely funded statewide universal school meals across the nation, including in Vermont.

Last year, state lawmakers passed a one-year extension of the universal school meals program using funds from Vermont’s education fund.

The JFO’s presentation to the committee can be viewed online here.

Michael Bielawski is a reporter for True North. Send him news tips at bielawski82@yahoo.com and follow him on Twitter @TrueNorthMikeB.