Battle brewing over property tax relief

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(Host) There’s a major fight brewing at the Statehouse over property tax relief.

The Douglas Administration wants to use most of a projected 29 million dollar surplus to lower the statewide property tax rate.

But Democrats argue some of this money is needed to eliminate a deficit in the state’s Transportation Fund.

VPR’s Bob Kinzel reports:

(Kinzel) When is a $29 million surplus not really a $29 million surplus?

When key lawmakers and the Douglas Administration have already spent half of the money.

Here’s what happened. Several months ago, economists projected that the state would end the current fiscal year at the end of June with roughly a $15 million surplus.

There was a general agreement to use the money to cover several unexpected expenses. These include the cost of moving state workers out of a building in Bennington and restoring several million dollars to the state’s Education Fund.

Last week Administration Secretary Michael Smith announced that the projected surplus has grown to $29 million. This means $14 million is now available for other purposes.

Smith wants all of this additional money to be used to reduce the statewide property tax for education by another two cents:

(Smith) “I think it’s reasonable in terms of what the expectations from Vermonters are that we’re trying to do something here in terms of property tax relief. Because God knows, nothing is happening right now in terms of the conference committee in terms of providing permanent property tax relief.”

(Kinzel) Senate Appropriations chairwoman Susan Bartlett has a different point of view. She wants to use roughly $6.5 million of the additional surplus money to cover a deficit in the state’s transportation fund.

The remaining $8.5 million would be used to reduce the statewide property tax rate:

(Bartlett) “I think a war of the words has commenced around what is property tax relief. And I prefer to just keep doing what we believe and have a tradition of, is the fiscally responsible and prudent thing to do instead of maybe the best sound bite thing to do.”

(Kinzel) Secretary Smith says he’s relatively certain that this year’s surplus will exceed current projections and he says he’s willing to dedicate this money to the Transportation Fund.

For VPR News, I’m Bob Kinzel in Montpelier.

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