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Commissioner of Taxes Releases FY2023 Education Yield Letter

Commissioner of Taxes Craig Bolio has released the December 1 education tax rate letter which forecasts the education tax yields for resident homeowners and the non-homestead tax rate for the upcoming fiscal year (FY) 2023. Using statutorily prescribed calculations, the Agency of Education, Department of Taxes, Department of Finance and Management, and Joint Fiscal Office collaborate to project the yields and rate based on these statutory assumptions.

One of the most significant factors impacting the forecast this year is an unprecedented surplus of nearly $90 million in the Education Fund leftover from FY22. This surplus is primarily driven by higher-than-expected performance of the non-property tax revenues in the Education Fund, the FY22 education property tax credits costing less than anticipated, and enhanced surplus from FY21. Statute mandates that the forecast use the entire surplus to reduce the projected property tax rates, so if a portion of the surplus is used for other purposes the rates will be different than projected.

The Governor and Administration would like to see half of the surplus, $45 million, returned to property taxpayers. There is also an opportunity to address some of the ongoing and upcoming education and workforce pipeline issues with the remaining $45 million, an opportunity that will likely have a positive effect on student experiences and outcomes into the future.

The forecasted FY23 homestead yield is $13,846 compared to $11,317 for FY22 (the current property tax year). The forecasted FY23 income yield is $16,705 compared to $13,770 for FY22. The average homestead tax rate is forecasted to decrease by 21.4 cents compared to FY22. The statewide base non-homestead tax rate is forecasted to decrease by 22.7 cents. This represents about a 9 percent education tax decrease, on average, for taxpayers.

Vermonters should know the property tax rate is only one piece of the property tax bill formula. Another driving factor is the Common Level of Appraisal (CLA). The CLA is a mechanism that helps ensure uniform property values across the state. When fair market property values increase in a town, it decreases the town’s CLA, which causes the town’s tax rate on bills to increase. Given the increased value in real estate in Vermont this year, the CLA is expected to go down in many communities which means actual tax rates in those towns could be much higher than the forecasted statewide rate.

“The last year has remained extraordinary in a number of ways and the real estate market is no exception. The average homestead and non-homestead tax rates are just one of the factors that will influence the property tax bill people see next year,” said Commissioner Bolio. “The increase in real estate prices around the state will have a significant impact on tax bills in many communities.”

Additional resources for understanding education tax rates are available on the department’s website at and from the Vermont school boards association at