(Host) Governor Jim Douglas says he’ll ask the Legislature to cut Vermont’s statewide property tax rate this winter.
Douglas says the cut is possible because rising property values have resulted in a $35 million surplus in the state’s education fund.
VPR’s Bob Kinzel reports.
(Kinzel) Last session lawmakers made some key changes to Act 60 – the state’s education funding law.
They created a two tiered statewide property tax system – the rate for residential taxpayers was set at 1.10 and a rate of 1.59 was established for all non residential property.
The changes also increased the state block grant to $6,800 per student.
The non-residential rate is fixed while the residential rate will go up or down depending on a local town’s school budget.
A community that spends 10% above the block grant will experience a 10% increase in their statewide property tax rate.
Douglas says property values across Vermont have increased faster than projections – a situation that has created a surplus in the state education fund.
The governor says this surplus will allow the General Assembly to reduce the new statewide property tax rates by between 3 and 6 cents:
(Douglas) We want to be sure that property taxpayers are not overtaxed. Over the last few years Vermonters have been clamoring for property tax relief and we certainly don’t want more from them than is necessary for the fund.
(Kinzel) The proposal has strong bipartisan support. Senate Democratic leader Peter Welch:
(Welch) I absolutely support lowering the rate if the extra money is there because we’ve had this explosion in the value of the grand list. We should give that money back to taxpayers, not use it simply because it’s there now. This is after we have fully funded the education fund, and fully funded includes a 5% reserve. We’ll be stable.
(Kinzel) The Legislature in January will also be looking at ways to control education costs. The governor says this effort is critical to the continued success of Act 60.
(Douglas) School spending has gone up more than 40% in the last six years and the population of our public schools is down 8%, so taxpayers are beginning to wonder whether the schools are being as efficient and using those dollars as effectively as possible. We need to look at ways to make sure they are.
(Kinzel) Two separate legislative committees are reviewing cost control and school governance issues and will submit a report to the General Assembly at the end of the year.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.