Breaking down the VT House tax bill that Gov. Scott has threatened to veto
Burlington Free Press, 3/30/18, MONTPELIER - Vermont lawmakers are attempting to change the way Vermont pays for education as part of a wide-ranging tax package.
The Vermont House of Representatives started their work this year by responding to the federal tax bill, which will have cascading effects on the state level this year.
Next, the House shifted a portion of education costs away from the property tax and onto the income tax. The result, H. 911, has already prompted a veto threat from Gov. Phil Scott and is now in the hands of the Senate Finance Committee.
The bill would have five major impacts on taxpayers:
- Lowers Vermont income tax rates and adjusts other parts of the tax code to compensate for federal tax changes.
- Expands the tax exemption for Social Security income.
- Creates a new "school income tax surcharge" to help finance education.
- Uses money from the new income tax surcharge, about $59 million in 2018, to lower homestead education property tax rates.
- Changes the education tax formula. School districts that spend a high amount of money per student will generally feel a greater tax burden.
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