The piece examines Vermont’s steep property tax rise, links the increases to escalating K-12 education spending and falling enrollment, highlights warnings from state tax officials, and argues that the structure of property taxation and special-interest influence are driving a damaging cycle that pushes people out of homeownership and the state.
The Vermont Tax Department is forecasting a 12 percent increase in property taxes for the upcoming 2027 fiscal year, bringing total property tax growth to about 41 percent over the past five years. Those numbers are stark and demand attention because they show a pattern few residents can afford to ignore. Rapidly rising education costs are the central reason officials give for the jump. When a single budget line drives a surge in local levies, the consequences ripple through communities fast.
Commissioner William C. Shouldice IV wrote to state leaders on December 1 to say the education system is both expensive and failing to deliver commensurate results: “Vermonters are asked to pay significantly more, year after year, to educate fewer students. As the nation’s top education spender, our state’s considerable investment does not achieve the quality education Vermonters expect.” Those are blunt words from a tax official and they underline a troubling mismatch between inputs and outputs. Over the last two decades spending rose by $924 million while enrollment fell by 16 percent, which raises obvious questions about sustainability.
Per-pupil spending in Vermont has pushed notably higher, with one report noting that per-pupil outlays climbed nearly $1,000 over the previous year, roughly a 7 percent increase. When per-student costs race ahead of inflation and enrollment declines, the only immediate lever left is to raise taxes on property owners. That boosts revenue in the short term but creates long-term risks for the tax base. Families feel the pressure first, and many make stark choices about whether to stay, move, or scale back plans.
Rising property taxes also reshape who owns residential real estate. As costs mount, homeownership becomes harder to sustain for younger families and lower-wage workers, while institutions and investment firms can step in to buy properties once owner-occupants sell. Heartland Institute Research Fellow Jack McPherrin warned that this shift concentrates land in the hands of entities with close ties to regulators and little stake in local community life, accelerating a cycle that replaces homeowners with long-term tenants. The social and civic costs of that transfer are rarely priced into budget debates.
The effect on housing markets is measurable: raising the cost of owning a home keeps potential buyers out, and first-time buyer demographics have shifted older. Data show the median age of a first-time homebuyer has climbed substantially over recent years, reflecting broader affordability challenges. When homeownership is priced out, communities lose the stable ownership that underpins local engagement and investment. That creates fewer vested homeowners to resist further tax hikes, which in turn empowers the institutions that can afford to absorb higher carrying costs.
State-level proposals in Vermont focus on restructuring education funding: consolidating districts, trimming staff and overhead, and phasing in changes, with many reforms not due to take effect until 2029. Those measures are aimed at reducing costs but critics argue they treat symptoms rather than root causes. The deeper issue, according to many analysts, is that property taxes are an attractive and predictable revenue source that frees policymakers to spend heavily on core constituencies like public employees and their unions. That dynamic insulates spending from ordinary market discipline.
Because property taxes are collected broadly, many pay for services they never use. Elderly homeowners, younger residents without school-age children, and low-income households in failing school districts all shoulder bills for a system whose primary beneficiaries are the institutions and workers inside the educational complex. That disconnect fuels resentment and erodes support for local levies, while political incentives keep pouring more money into the same structures that produce the poor outcomes.
Some observers suggest the only effective way to force accountability is to redirect funding toward families and away from monopoly school systems, using mechanisms that follow the student rather than the institution. School choice and Education Savings Accounts are cited as examples that could discipline costs by letting parents pick alternatives and rewarding outcomes instead of inputs. Vermont ranks at the bottom on measures of education choice, making it a case study in how limited flexibility magnifies the pressure on property taxpayers.
Meanwhile, assumptions that residents will not relocate in response to higher taxes are proving shaky. Population decline trends and migration patterns show people do move when the balance of cost and opportunity tilts against them. The loss of taxpayers reduces the base needed to service rising levies, which can trigger further increases and deepen the fiscal spiral. If policymakers want to stop the cycle, they must confront both how money is raised and how it is spent, and resist policies that empower special interests at the expense of broad-based homeowners.
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