On December 1, the Vermont Department of Taxes released the Annual Tax Letter notifying lawmakers and the public that Vermonters face an average increase of 12% in statewide property taxes next year.

Actual rates will vary by municipality based on local spending and property values, but the projected increase will only add to the property tax burden for small businesses and homeowners. The increase comes on top of a cumulative 29% statewide education tax hike over the past four years.

Read the December 1 letter here: 2025 Education Tax Rate Letter.

Read Governor Scott’s statement here: Statement from Governor Phil Scott on December 1 Tax Letter | Office of Governor Phil Scott

Responses. Governor Scott renewed his call for lawmaker to embrace meaningful school governance reform that would reduce the cost of education and provide property tax relief.

In November, the panel tasked with developing new boundaries for larger school districts left reform plans in limbo when it opted against recommending any school redistricting maps to the legislature.

The increase was also condemned by legislative leaders.

In the letter, Tax Commissioner Bill Shouldice highlighted that school spending has increased by nearly $1 billion in the past 20 years while public school enrollment has declined by 15,650 students over the same period.

What happens next? Already facing a budget crunch next year, the projected education property tax increase makes the situation even tougher for lawmakers.

In May, the governor and lawmakers agreed to spend $120 million in surplus taxpayer funds to buy down the projected education property tax increase for FY 2026 from 6% to 1%.

A meaningful reduction in next year’s increase would come at an even steeper cost.

Governor Scott intends to make another push at education governance reform to stabilize property taxes. It remains to be seen whether lawmakers will follow suit.

Weigh in on state taxes and spending here: Vermont Wants YOUR Feedback On Taxes and Spending – NFIB.