(Host) Groups that represent towns and school boards say the Douglas Administration should reduce the statewide property tax rate.
The groups say the Administration has failed to follow the law – and that local taxpayers will pay the price.
VPR’s John Dillon reports:
(Dillon) This sounds like one of those insider Montpelier stories, in which organizations argue arcane points about different pots of money.
But Steve Jeffrey of the Vermont League of Cities and Towns says the issue has a very real impact on local budgets – and taxpayers’ wallets.
(Jeffrey) "Absolutely, there’s $18 million that should be returned to property taxpayers."
(Dillon) The $18 million comes from a projected surplus in the Education Fund. The law requires the Tax Department to recommend an adjustment to the statewide education tax rate by December 1st.
Jeffrey says the tax rate should be reduced because of the surplus. But the Douglas administration did not recommend a reduction.
Officials say they need to preserve all their options.
And one of the options under consideration is to use the surplus to shore up a deficit in the Transportation Fund.
But Jeffrey says that’s not allowed.
(Jeffrey) "If the state coincidentally has a $20 million hole in the Transportation Fund, then it should be raising a comparable amount of alternative taxes, but it shouldn’t be coming from the property taxpayers.
(Dillon) Both the League of Cities of Towns and the Vermont School Boards Association have written the tax commissioner pointing out that the law requires him to recommend a tax cut if the school fund has a surplus. Steve Jeffrey:
(Jeffrey) "Flexibility is not in the statute. It says you’re supposed to specify a tax rate that’s going forward that meets the requirements of the law."
(Dillon) But Governor Jim Douglas says the administration has basically recommended that the statewide property tax rate be kept at last year’s levels. And he said local taxpayers need to consider how the school money is being used.
(Douglas) "We have to look at the whole picture and decide how best to deploy those resources. When state government is contracting, when small businesses are cutting back, when family budgets are stressed, can we afford continued increases in one of the most expensive services, namely K-12 education."
(Dillon) Jeffrey, of the League of Cities and Towns, says when the school funding law was written a decade ago, the goal was to make sure that the dollars were used exclusively for education.
He says the fears that many had back then that the money would be tapped for other purposes are now being borne out.
For VPR News, I’m John Dillon in Montpelier.