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New Act 127 Transition Plan Could Increase MRPS School Tax Rates By 23.07%, Up From An Earlier 19.2% Estimate

photo of Montpelier High school with blooming apple tree
Montpelier High School in spring. Photo courtesy MHS website.
A new Act 127 transition plan is now projected to increase the Montpelier Roxbury Public Schools district property tax rate by 23.07% in FY2025, up from a 19.2% projected increase under the prior transition plan, according to calculations by the school administration.

The new transition plan was unveiled by the House Ways and Means Committee Tuesday in response to major problems in the Education Fund arising from the original transition plan. The income-sensitized rate for district residents might also rise 23.07% under the proposed budget, although both rate increases are only estimates that could change by the time the Legislature adjourns.

Act 127’s original transition plan — a 5% pre-CLA tax rate cap — would be scrapped under new legislation. The new plan would provide some help to school districts that lose tax capacity under the law — including Montpelier Roxbury — but is less generous than the 5% cap.

Under the proposed transition plan — which could become law within a few weeks — the actual MRPS school tax rate would be reduced by 11 cents next year. The adjustment would be reduced by 20% each year until it was phased out in five years.

Because of the change in the law, which could be further amended as it passes through the Legislature, the committee has added a provision allowing districts to cancel their warned budget votes, draft new budgets, and hold later votes.

Legislators are hoping that some school districts do reduce their budgets, particularly those districts that packed in more spending in hopes of getting “free money.” If the total of statewide budgets is reduced, that would take pressure off the education fund and could help reduce tax rates somewhat.

The new transition system would create a closer connection between budget cuts and tax rates. Under the 5% cap, districts such as Montpelier Roxbury that had proposed per-pupil spending increases of close to 10% would have had to cut enormous amounts from the budget to reduce the tax rate. The new system means any additional budget cuts will reduce tax rates.

After considerable discussion, the MRPS school board did not take any action Wednesday night to re-open the budget. The Bridge will be publishing a separate article covering the details of that meeting.