Tax Formula-Related Data Points

Frequently used terms- defined:

Average Daily Membership (ADM) is a count by town of resident and state-placed students who receive an elementary or secondary education at public expense. Resident students are counted during the period from the 11th to the 30th day of the current school year, while state-placed students are counted for the school year prior to the current census period. Data are used in calculating equalized pupils which are used to determine the homestead tax rates.

The Equalized Pupils (EQP) figure is an average of the two most recent ADM counts with weights applied to PK, secondary, and state placed students, and factors applied for poverty, limited English proficiency, and state- wide reconciliation.

The Property Yield is the “Property Dollar Equivalent Yield” which means the amount of spending per equalized pupil that would result if the homestead tax rate were $1.00 per $100.00 of equalized education property value. The homestead property rate is set in statute at $1.00. The yield is set to generate enough property tax revenue to support the ANTICIPATED STATEWIDE education spending after all other education fund revenue sources are accounted for.

The Common Level of Appraisal (CLA) was developed to equalize what is paid in education property taxes across towns. The Common Level of Appraisal (CLA) for every Vermont town is the primary result of the Equalization Study performed by the Tax Department every year. The equalization study compares the ratio of Grand List value to sale price for all the arms-length sales in the town over the prior three-year period. The study considers sales price as the best measurement of fair market value. If Grand List values are generally less than sale prices for the recent sales, the town will end up with a CLA less than one hundred percent. If Grand List values are generally more than sale prices for the recent sales, the town will end up with a CLA of more than one hundred percent. Once the CLA is determined, it is used to adjust the homestead and non-residential education tax rates. The CLA doesn’t change taxpayer’s property values, only the education tax rate in a town.

Tax Rate Penalties- An excess spending penalty (32 V.S.A. § 5401 (12)(B)) is applied if a district’s education spending per equalized pupil (ES/EP) exceeds the statewide ES/EP increased by 121%. The variance is added to the district’s ES/EP prior to calculating the final tax rate.