As state works out cost of Act 46, panel opts for higher taxes
By Tiffany Danitz Pache
For Vermont Digger
The Senate Finance Committee voted 6-1-0 on H.853, also known as the yield bill, which sets the homestead property tax rate for fiscal year 2017 Monday. They also used the legislation to patch a loophole in a 2010 law that allows newly merged school districts to hike spending without a corresponding increase in taxes.
First and foremost, the legislation sets the property dollar equivalent yield at $9,645 and the income yield at $10,803 while the nonresidential property tax rate will be $1.539. This is different from the House passed version which would have set the property yield at $9,701 and income at $10,870. The nonresidential tax rate was changed from $1.53 to $1.539.
Any time the yield number goes down, taxes go up and anytime the yield number goes up, taxes go down.
Taxes increased under the Senate bill because lawmakers decided not to apply the entire education fund surplus to the tax rate this year.
The House version included $19.7 million in surplus dollars from the education fund to increase the yield and keep taxes lower. By the time the bill reached the Senate education panel for consideration, the surplus had dropped to $18.8 million.
The numbers are like shifting sand at this point, according to Mark Perrault, senior fiscal analyst with the Joint Fiscal Office. About $870,000 is being spent on tax incentives for mergers and educational fund money is still in play in the transportation bill and the special education bills.
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