Vermont may be best known this time of year as the backdrop of the beloved movie White Christmas, a place where holiday magic and a little snow solve every problem. But in the real Vermont of 2025, rising education spending and looming property tax hikes are presenting challenges that can’t be fixed with song or winter weather.
The Green Mountain State, like many states across the nation, is struggling with escalating property taxes. Governor Phil Scott recently announced that taxpayers are expected to see a 12% increase in property tax bills next year. In response, Governor Scott and the legislature passed an education reform measure on a bipartisan basis to help address rising costs.
During the last legislative session, lawmakers enacted Act 73 to “right-size” Vermont’s public education system in order to improve outcomes and provide property tax relief. Governor Scott argues that the objective of Act 73 is to establish “a new governance structure to reflect the fact that we’re now educating 20% fewer K-12 students than we were 20 years ago.”
Vermont’s challenge is not only declining enrollment; their education system is also costing taxpayers significantly more. The Reason Foundation recently reported that Vermont is one of eight states spending over $25,000 per student, with per-pupil spending reaching $29,169. Public education spending continues to rise across the country, including here in Iowa. According to ITR Report Card research, our statewide median per-pupil spending has grown from $15,957 in 2020 to $19,723 in 2024, an increase of nearly 24% in just five years.
Although Act 73 passed with bipartisan support, disagreement remains over how to implement its reforms, including the consolidation and redrawing of school districts. A legislative commission has recommended an alternative approach that would rely on voluntary mergers and new cooperative sharing agreements to achieve economies of scale.
Still, with a 12% property tax increase looming, Governor Scott continues to emphasize the need for meaningful tax relief. “The choice before lawmakers in 2026 is clear. We can continue to work together to keep moving forward with our plan or they can explain to their constituents why double-digit tax increases are acceptable while inequality grows from region to region and test scores plummet,” he said.
Vermont also offers a cautionary example for Iowa. During the last legislative session, Vermont lawmakers used $118 million in surplus dollars to keep education property taxes “nearly flat.” While this band-aid may have softened a larger increase, it could not prevent the projected 12% hike now facing taxpayers.
Using surplus or state general fund dollars to buy down property taxes without limiting local spending is akin to trying to save the Titanic with bilge pumps. Local governments will simply absorb the extra money and continue to increase spending, leaving property tax bills to climb again. Iowa legislators should reject this failed approach. Fortunately, Governor Kim Reynolds has already stated she opposes using General Fund dollars to buy down property taxes.
Across the nation, the common refrain is that property tax reform is complex and difficult. But every state shares one simple truth: government spending is driving higher property tax bills.
For too long, reforms to public education spending have been treated as untouchable. It is encouraging to see policymakers in several states beginning to challenge this assumption. Wisconsin lawmakers are considering legislation to encourage district consolidation as enrollment declines. New Hampshire is pondering reforms as they grapple with steep enrollment drops alongside increasing education costs. And in South Dakota, policymakers are evaluating education reform as a potential tool for property tax relief.
Vermont will always hold a special place in American culture thanks to White Christmas and its postcard-perfect imagery. But for the Vermonters paying property tax bills, reality looks much different than Hollywood’s version. Lasting solutions will require structural reform, not short-term spending patches—and other states, including Iowa, should take note.
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