House Republicans unveil property tax reform plan

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A group of House Republicans has unveiled a property tax reform plan that makes dramatic changes in the way that education is financed in Vermont.

Some Democratic lawmakers say the proposal may be unconstitutional because it creates unequal tax burdens.

VPR’s Bob Kinzel reports.

(Kinzel) The new plan marks the first time that opponents of Act 60 and Act 68 have offered a concrete plan to replace the current system.

Londonderry Rep. Rick Hube is one of the sponsors of the new approach known as LEAF, or local education affordability formula:

(Hube) "LEAF represents a new way of thinking and a dramatic change in course yes you might say it’s radical."

(Kinzel) The proposal eliminates the statewide residential property tax for education but keeps the non residential property tax.

Here’s how it would work.  The state would provide each town with an $8,500 block grant for each student. If a town wanted to spend more, it would impose its own local residential property tax, and unlike the current system, it wouldn’t be required to share any of these local funds with other communities.

Hube says it’s a way to directly connect school spending decisions with local tax burdens:

(Hube) "It restores local control over spending and priorities which have been stripped away over the past decade."

Hube says the plan will require roughly $150 million in new tax revenues to offset the elimination of the statewide residential property tax and he suggested that this money could come from a variety of broad based tax sources.

Morrisville Rep. Shap Smith, who’s a member of the Ways and Means committee, says the plan deserves closer scrutiny but Smith says the proposal has serious equity problems because it makes it easier for wealthy towns to raise money for education:

(Smith) "It’s one of the reasons that the Vermont Supreme Court found the pre Act 60 system to be unconstitutional was that you did not have an equal tax base among towns and it seems that this proposal would be going back in that direction and so I don’t understand how this would be equitable."

(Kinzel) One of the bill’s other sponsors, Georgia  Rep. Carolyn Branigan says it’s worth going back to court to settle the equity issue:

(Branigan) "The courts are going to have to decide that but what is equity…as a school teacher as a school administrator I really bristle at the idea of equating equity with money or facilities it’s child achievement that really matters."

Governor Jim Douglas says he’s intrigued by the plan but he doesn’t want to raise $150 million in new taxes unless the proposal has strong cost containment provisions:

(Douglas) "Just shifting one tax source to another doesn’t get at the root of the problem because our experience 4 years ago was that it raised the overall level of taxation and that’s not what we want to accomplish again."

Several members of the Ways and Means committee said they wished the plan had been introduced last fall because they believe it will be very difficult to seriously consider the proposal in the next few months.

For VPR News I’m Bob Kinzel in Montpelier.

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