March 23, 2019

Guest Column: The cost of inaction

By Karen Horn

It is time to agree on a state budget and establish an education property tax yield and rate for Vermont.

Towns and cities have done their jobs. Listers have developed, corrected and lodged their grand lists. Assessors have set the appraisal value of real and personal property and have lodged property inventories. Select and school boards have developed — and voters have adopted — their school and municipal budgets. Town and city clerks have ordered their property tax billing forms. Selectboards and city councils will set their municipal tax rates at meetings in the next two weeks, if they have not already done so, and under normal circumstances, would send out their tax bills as early as July 2. The law requires at least 30 days notice from the date of mailing property tax bills to payment being due. Some towns have due dates for first payment installments as early as Aug. 10.

As of this week, Vermont has no state budget, no homestead education property tax rate, a default non-residential property tax rate of $1.59 (a five-cent increase over last year), no property or income yield per equalized pupil and no authority for state government to operate or for local governments to send out education property tax bills. We are perilously close to a government shutdown, which will cost the state, local governments and the residents of Vermont.

The ongoing battle rages over the issue of whether to increase homestead or non-resident property tax rates (which are not the same as your property tax bills) to fund education obligations or put surplus money toward writing down long-term obligations for teachers’ retirement. Education Fund obligations include not only the school budgets passed by voters at Town Meeting, but also basic adult education, the Community High School of Vermont (Department of Corrections), reappraisal and listing assistance, flexible pathways legislation, current use reductions in education tax funding and incentives for consolidating school districts pursuant to Act 46. Compromises to end the impasse have been both suggested and rejected.

Once property tax yields and rates are finalized and the governor signs them into law, it will take the Department of Taxes at least five days to apply those figures to the statewide grand list and calculate the rates for each municipality — taking into account the common level of appraisal, co-efficient of dispersal and any “excess spending” that is the result of adopted school budgets.

We are staring down the barrel of July 1, and recent meetings between the administration and legislative leaders have given no comfort that a resolution to the unfolding crisis is in the offing.

City and town officials need the administration and legislature to agree on a path forward that allows property tax bills to be sent so Vermonters can pay their taxes and fund both their schools and municipalities. The fact that Vermont law ties our hands in the face of their inaction in unacceptable.

Let’s get it done. Now.

Karen Horn is director of public policy and advocacy for the Vermont League of Cities and Towns.

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