Douglas prepares Act 60 reform plan

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(Host) Governor Jim Douglas says it’s very likely that he’ll present the Legislature with a comprehensive plan to reform Act 60 in the near future. The Senate has passed a bill that increases the statewide property tax to raise the state block grant, while the House Ways and Means committee is looking at a proposal that relies more heavily on the state income tax and an expansion of the sales tax.

Speaking Tuesday night on VPR’s Switchboard program, Douglas says he’ll unveil a plan that uses a balance of sources including income, sales and property taxes. Douglas says he has some concerns about the House approach:

(Douglas) “To be honest, I think that goes too far. It would reduce the school property tax rate to almost zero in some communities, and I think it’s important to have property as part of the basis for taxation. Property has been taxed for centuries for a good reason: it’s not mobile, it’s a more reliable, less volatile source of revenue.”

(Host) Douglas says his plan will also contain a strong cost contain provision:

(Douglas) “We also have to have a plan that provides a disincentive for voters to raise budgets in multiples of the rate of inflation. We have to have, as we have income sensitivity, we have to have cost sensitivity. We have to reconnect people in a meaningful way to the consequences of their votes.”

(Host) The governor says he also wants lawmakers to look at a plan to consolidate some of the state’s school districts as a way to reduce expenses.

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