VT LEG #381986 v.1
H.491 – An act relating to setting the homestead property
tax yields and the nonhomestead property tax rate
As introduced by the House Committee on Ways and Means
1,i
Bill Summary
his bill sets the property dollar and income dollar equivalent yields for the purpose of setting
homestead tax rates and property tax credits. It also sets the nonhomestead property tax rate.
Fiscal Impact
This bill sets the property dollar equivalent yield, income dollar equivalent yield, and nonhomestead property
tax rate for fiscal year 2026. The Joint Fiscal Office (JFO) estimates that these yields and rates would
correspond to an average increase of approximately 1.1% for homestead property tax bills, income
education tax bills, and nonhomestead property tax bills.
Background and Details
Section 1
Section 1 sets the property dollar equivalent yield at $8,596, the income dollar equivalent yield at $12,172,
and the nonhomestead property tax rate at $1.703 for fiscal year 2026.
JFO estimates that these yields and rates will correspond with an average increase of approximately 1.1% for
homestead property tax bills, income education tax bills, and nonhomestead property tax bills. These yields
and rates are set at a level estimated to be sufficient to fully fund the Education Fund in fiscal year 2026.
Section 2
Section 2 includes a technical correction for the purpose of calculating the property tax credit in accordance
with the statewide adjustment changes made in Act 183 of 2024.
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The full fiscal note history is available on the fiscal tab of the bill page on the General Assembly website and can be pulled up
through a bill number search on the JFO page.
The corresponding Education Fund Outlook can also be found on JFO’s website at the following link: H.491 EF Outlook.
1
The Joint Fiscal Office (JFO) is a nonpartisan legislative office dedicated to producing unbiased fiscal analysis – this fiscal note is
meant to provide information for legislative consideration, not to provide policy recommendations.
T
March 21, 2025 Julia Richter, Senior Fiscal Analyst March 21, 2025
Preliminary Education Fund Outlook for FY 2026 - H.491, As introduced by the House Committee on Ways and Means
Modeling using updated school budget data (3/10/25).
FY2025 FY2026
Projected, Including BAA
H.491 - As Introduced by House
Ways and Means
aAverage Homestead Property Tax Rate
1
$1.303 $1.595
bAverage Tax Rate on Household Income 2.33% 2.27%
cUniform Non-Homestead Property Tax Rate
1
$1.391 $1.703
dProperty Yield Per Pupil
1,2
$9,893 $8,596
eIncome Yield Per Pupil
1,2
$10,110 $12,172
fTotal Long Term Weighted Average Daily Membership (LTWADM) 142,810 142,564
gAverage Percentage Bill Change Compared to Prior Year (HS/Inc/NHS) Uniform: 13.8% Uniform: 1.1%
hStatewide Education Spending Growth 10.7% 5.5%
iStatewide Education Grand List Growth 14.3% 14.1%
jStatewide Adjustment 100% 72.4%
Sources
1aHomestead Education Property Tax 762.2 762.7
1b Property Tax Credit (140.0) (153.0)
1c One-time Property Tax Credit Increase of 3% (28.0) -
2Non-Homestead Education Property Tax 894.5 908.4
3Sales & Use Tax 601.9 619.0
4 Purchase & Use Tax - one-third of total 50.7 52.5
5Meals & Rooms Tax - one-quarter of total 71.2 75.0
6Lottery Transfer 35.6 36.7
7Medicaid Transfer 9.0 9.0
8One-time GF transfer 25.0 77.2
9Other Sources (Wind & Solar, Fund Interest) 6.7 6.3
10Total Sources 2,288.9 2,393.8
Appropriations
11Education Payment 1,882.3 1,991.2
12Special Education Aid 264.6 270.7
13State-Placed Students 19.0 17.2
14Transportation Aid 25.3 26.1
15Technical Education Aid 17.9 18.7
16Small School Support/Merger Support 1.8 1.8
17Essential Early Education Aid 8.7 9.0
18Flexible Pathways 10.7 10.4
19 Universal School Meals 17.5 18.5
20 English Learners Services 2.3 2.3
21PCB Remediation Grants - 0.0
22VSTRS Pension Normal Cost 36.0 38.8
23VSTRS OPEB Normal Cost 19.1 22.0
24One-time COLA payment - 0.0
25Other Uses (Accounting & Auditing, CMF transfer, Financial Systems) 6.0 5.1
26Total Uses 2,311.1 2,431.8
Allocation of Revenue
27Revenue Surplus/(Deficit) (22.3) (38.1)
28Prior-Year Reversions 24.3 -
29Transfer (to)/from Stabilization Reserve (5.0) (2.8)
30Transfer (to)/from Additional Reserves 13.0 -
31BAA - One-time transfer to afterschool special fund - -
32Transfer (to)/from Unreserved/Unallocated (10.0) 40.9
Stabilization Reserve
33Prior-Year Stabilization Reserve 47.0 52.1
34Current-Year Stabilization Reserve 52.1 54.9
35Percent of Prior-Year Net Appropriations 5.0% 5.0%
36Reserve Target 52.1 54.9
Additional Reserve
37Current-Year Reserve for Future COLA provisions - -
37a.Use of Current-Year Reserve for Future COLA provisions - -
38Current-Year Tax Rate Offset Reserve 13.0 -
38a.Use of Tax Rate Offset Reserve towards FY25 tax rates (13.0) -
39Education Transformation Transition Reserve - -
Available Funds
40Prior-Year Unreserved/Unallocated 31.09 41.07
41Current-Year Unreserved/Unallocated 41.07 0.16
Notes:
March 21, 2025
Prepared by JFO
(millions of dollars)
1) FY 2026 is the first year with the Statewide Adjustment CLA, so the FY 2025 property rates and yields cannot be directly compared to the prior
years' property tax rates and yields.
2) FY 2025 was the first year with the elimination of the equalization ratio from Act 127. As such, the FY 2025 and FY2026 property yields and
income yields cannot be directly compared to the yields prior to FY2025.
VT LEG #379364 v.6