Chambers and business groups back careful homestead-exemption reform, urge studies on household measures and downsizing incentives

Austin Davis, representing the Lake Champlain Chamber, told the House Ways & Means Committee that his organization supports careful reform of the homestead exemption and property‑tax relief but opposes expanding property-tax classifications. He urged the committee to study household-size adjustments, net‑asset attestations, senior deferral options and downsizing incentives as near‑term improvements.

Davis argued that, rather than adding classification complexity, the Legislature should consider a uniform rate or revenue‑neutral design for any homestead-exemption change. "We think the answer is to go to a tax system with a uniform rate without rate classification for the purposes of simplicity, transparency, and economic neutrality," he said.

Why it matters: The committee is weighing both a foundation formula for education funding and parallel property-tax reforms. Witnesses said changes to homestead exemptions and property-tax credits affect vertical equity (how taxes vary by income) and horizontal equity (how similar taxpayers with different non-income circumstances are treated).

Davis recommended four study topics be added to committee work this year: (1) household-size adjustments (income per person domiciled under the homestead) to improve horizontal equity; (2) net-asset attestations to limit benefits to those with limited wealth; (3) senior deferral programs similar to Maine and Minnesota that defer tax until property sale or estate settlement; and (4) downsizing incentives to reduce pressure on housing supply and better target relief.

He also urged the committee to study regional differences in cost and housing prices when designing relief, noting that median home sale prices and costs vary substantially between Chittenden County and other counties.

On education spending design, Davis said his business group's working group supports a foundation formula and recommended taking social-service spending out of the education fund and aligning services through designated agencies. He also asked the committee to consider how supplemental or supplemental-district spending and caps interact with teacher salaries, special education and debt service.

Ending: Davis asked that the committee add explicit study language and reporting deadlines (he suggested December 2025) so the tax department could return analyses on household-size adjustments and other proposals. Committee staff indicated they will circulate draft language and analyses for upcoming straw polls and work sessions.