Ways & Means hears briefing on tax-increment financing, background growth rates and reappraisal effects on education revenue

Summary

A Joint Fiscal Office presenter and Tax Department staff briefed the committee on TIF background growth-rate methods, housing-permit trends, and how reappraisals interact with TIF increments; staff said TIF reduces education fund revenue by an estimated $6–8 million annually and that 2,500 housing units were permitted statewide in 2024.

Montpelier — Members of the House Ways & Means committee on May 1 received a technical briefing on tax-increment financing (TIF) districts, focusing on how background growth rates are measured, recent housing-permitting trends, and how municipal reappraisals affect TIF increments and education-fund revenue.

A presenter identified as Ted (Joint Fiscal Office) walked through three approaches to measuring “background” growth rates for grand lists: long-term growth in total grand-list value (new construction and renovation), CLA-adjusted growth within parcels that later become TIF districts, and housing-unit creation measured through U.S. Census permitting data. The presenter credited analysis by Jake Feldman and earlier JFO work by Grant Campbell as sources for the numbers shown.

The briefing emphasized that background growth estimates are inherently a counterfactual — what values would have been without a TIF — and that those estimates can vary widely by place and period. Using grand-list growth that strips out pure appraisal appreciation, the presenter said most Vermont jurisdictions analyzed showed long-term annual listed-value growth roughly between 0.5% and 1% per…

Ways & Means hears briefing on tax-increment financing, background growth rates and reappraisal effects on education revenue

Summary

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