Vermont Gov. Scott Proposes $9.4B Fiscal 2027 Budget to Curb Taxes

Governor Phil Scott unveiled a $9.4 billion budget proposal for fiscal 2027 intended to temper rising property taxes as federal pandemic relief wanes. The administration described the plan as disciplined, noting it is roughly 3 percent larger than the current-year budget and uses targeted transfers and one-time resources to lower the state’s projected average property tax increase.

Central to the proposal is a $105 million allocation meant to reduce the statewide projected average property tax hike from an estimated 12 percent to about 5.5 percent. The administration also proposed shifting $10 million in vehicle purchase-and-use tax revenue from the Education Fund to the Transportation Fund. The package of budget moves was coupled with another set of proposed changes to Act 250, Vermont’s land use and development law, aimed at altering permitting and review processes.

The plan covers the fiscal year beginning July 2026. Officials framed the proposal against a backdrop of waning federal relief funding and warned that possible future federal cuts to Medicaid and other programs could create longer-term fiscal pressure on state budgets.

Local residents in Sullivan County who own property, work in Vermont, or depend on cross-border services should pay attention to how these proposals could play out. If enacted as proposed, the $105 million measure could translate into smaller increases in property tax bills than households were facing under current projections. At the same time, the $10 million transfer away from the Education Fund raises questions about the effect on school budgets and classroom resources; school districts and municipal officials will be watching budget deliberations closely to see whether offsets or cuts will be required.

Shoring up the Transportation Fund could also have direct implications for regional infrastructure projects. Increased transportation funding can mean more stable support for road maintenance and bridge work that affects daily commutes and local commerce. Meanwhile, proposed Act 250 changes could influence local permitting timelines for residential, agricultural, and commercial projects in and around Sullivan County, with consequences for development, property values, and conservation priorities.

The broader fiscal context matters for public services relied upon locally. Potential federal Medicaid cuts would not only affect health care access for vulnerable residents but could also reverberate through hospital budgets and social service providers in neighboring regions. State leaders are balancing near-term tax relief with the risk of future funding shortfalls if federal supports decline.

The budget now moves into the next stage of review, with state lawmakers expected to debate priorities and potential trade-offs in the months ahead. For Sullivan County residents, the outcome will determine whether a smaller-than-expected property tax increase materializes, how school funding is preserved, and how transportation and development plans proceed into 2026 and beyond.