How education property tax bills are calculated

When discussing Ed Funding in Vermont you must be very careful about which terms are used. There is a difference between school districts, towns, district tax rates, town tax rates, statewide averages, the tax bill, homestead tax rate, non-homestead tax rate, income tax rate, the homestead tax bill, the non-homestead tax bill and the statewide averages of most of those. It's the statewide average tax bill (homestead and non-homestead) that was projected to increase so much. And all those have nothing to do with the Municipal Tax rate.

Sample Bill

Here's the information from the VT Department of Taxes about what's on your bill.

The District Homestead Tax Rate

Nearly off the discussion on these pages pertains to the education homestead property tax rate.

Calculating a district's homestead property tax rate is a fairly simple formula:

PPS / DY = DTR

• PPS = The district's spending per pupil - Per Pupil Spending. This is different for each school district. It is the approved district budget divided by the number of Weighted Pupils which is not the same as the number of students sitting at desks. The technical term for weighted pupils is Long Term Average Weighted Daily Membership or LTWADM. All that is explained here. Note that the more weighted pupils you have, the lower your tax rate if the budget is kept the same.

• DY = Dollar Yield - This number is set each year by the legislature and is the same throughout the state. It is a calculated number that takes into account all the spending and all the pupils and all the taxable property in the state. The dollar yield guarantees that any two districts with the same PPS will have the same district tax rate. If Wolcott voters want to spend $17,000 per pupil and Woodstock voters want to spend $17,000 per pupil, both districts will have the same district tax rate. The value of Wolcott's property may be a lot less than the value of Woodstock's, so they will each send very different amounts of money to the Ed Fund when the tax is collected. But . . . the end result is that enough money is provided by taxes to fund their budgets. How the Dollar Yield is calculated is explained here.

• DTR = District Tax Rate. This is not the same as the town's tax rate. Many school districts contain several towns. For those districts, the education tax rate used to calculate your bill may vary from town to town within the district. Each town's CLA modifies the DTR appropriately.

The Town Tax Rate

The town tax rate is the one you see on your tax bill. Calculating it is also fairly easy.

DTR / CLA - TTR

DTR = District Tax Rate as described above

CLA = Common Level of Appraisal as described here.

TTR = The tax rate on your bill

How much you are billed

Here's the formula:

TB = TTR * HV / $100

Here's the explanation:

TB = Your total education tax bill. That's what you have to pay.

TTR - Town Tax Rate as described above

HV = The value of your home as entered in the town's grand list by the town listers or assessor. It's shown on your tax bill. That value is divided by $100 because the tax rate is the amount you pay for each $100 of your homesite's value.