House Committee Develops Act 60 Compromise Plan

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House Speaker Walter Freed supports a new compromise that would reform Act 60. The leadership of the House Ways and Means committee is developing the plan.

VPR’s Bob Kinzel reports.

Last year, the House Republican caucus was unable to reach a consensus concerning the basic elements of an Act 60 reform plan. Some members wanted to raise the state sales tax to finance a proposal while others backed an increase in the statewide property tax.

After the House failed to address this issue for several months, the Senate passed its own plan – it’s one that increases the statewide property tax and limits the number of towns that will be subject to the sharing pool.

A new House Republican plan shares some common points with the Senate proposal. It would boost the statewide property tax rate from $1.10 to perhaps $1.38. This would allow lawmakers to boost the student block grant by more than a $1,000.

The proposal would also eliminate the sharing pool of Act 60 but would require towns that spend more than 50 % above the block grant level to share money they raise locally. This provision would kick in for towns that spend more than roughly $10,000 per student a year.

House Speaker Walter Freed thinks the plan has a lot of merit:

(Freed) “It’s able to trade-off. Some increase in the statewide property tax. The only people who are going to be paying that in that trade-off are quite frankly the gold towns, the sending towns. The receiving towns, all you are doing in this case here is having a little less local tax and a little bit more statewide property tax. As far as the community is truly concerned, what you really want to know is your overall tax rate going down.

House Democratic Leader John Tracy is concerned that the proposal undermines the equity provisions of Act 60 because it allows a large disparity in spending rates:

(Tracy) “But I think there is a significant difference between $6,700 and $10,000. There’s a lot of space in between there that might provide for a very substantial equal education opportunity for children and it would be unfortunate to see towns unable to afford that.”

(Kinzel) The measure is being closely reviewed by the House Ways and Means committee.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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