Budget & Taxes

This bill sets specific property tax rates and funding levels for Vermont's 2027 fiscal year, including a nonhomestead property tax rate of $1.698 per $100 of value and specific dollar yields for homestead and income calculations. It also reserves $52.45 million in the Education Fund to help offset potential property tax rate increases in 2028, while correcting a definition related to statewide education tax calculations. The legislation refunds $150,576 to the City of Barre for overpaid education taxes from 2021-2024 and adjusts special education funding grants for inflation starting in 2027. Additionally, it updates how special education census grants are calculated to account for inflation over time.

Vermont's S.51 creates a $1,000-per-child refundable tax credit for residents with children under age 6, regardless of whether they or their children have a federal tax ID number. It also expands the state's earned income tax credit to cover individuals who qualify federally but lack required tax IDs, and adjusts exclusions for Social Security and Civil Service retirement income based on income thresholds (e.g., full exclusion for single filers earning ≤$55,000 or married couples ≤$70,000). The bill directly affects low-to-moderate-income families, retirees, and individuals with limited access to federal tax IDs. Signed into law by Governor on June 25, 2025, it modifies Vermont's tax code to broaden eligibility for existing federal credit programs.