Legislature debates local option taxes

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(Host) The head of the House Ways and Means Committee is taking a cautious approach to a plan that would give all towns in Vermont the authority to levy local option taxes. Rockingham Representative Michael Obuchowski doesn’t support this blanket approach. He says cases should be reviewed by lawmakers.

VPR’s Bob Kinzel reports.

(Kinzel) When the Legislature passed Act 60 in the late 1990s, they included a provision in the bill that allows towns hit hardest by the imposition of a statewide property tax to consider imposing local option taxes as a way to help reduce municipal tax burdens. Roughly 35 communities fall into this category and a number of them, including Manchester and Williston, have decided to impose a local sales tax.

A portion of the new revenue raised at the local level is sent to the state to help finance the Payment in Lieu of Taxes program – a program that allocates money to towns that have a large amount of state property.

Williston Representative Mary Peterson believes the current law is too restrictive and she thinks all towns in the state should have the right to impose a local option tax if voters in that community support the plan:

(Peterson) “I think, especially being in Chittenden County, Williston is allowed to levy the tax but South Burlington and Burlington for example – the other two retail centers – can’t. That doesn’t seem to make a lot of sense. We get to levy the tax but we also have to provide services to those businesses in that commercial area. And right now the vast majority of the tax is paid even with the local option tax still goes to the state. But it’s Williston who’s providing the public safety, facilities, the road infrastructure.”

(Kinzel) House Ways and Means Chairman Michael Obuchowski says he understands the reasons for the legislation but he still wants the Legislature to review each request on a case by case basis. So he’s reluctant to support the bill at this time:

(Obuchowski) “To open it up to all – I’d be hesitant to do that. However those that already have them and individual requests and justification, I don’t have any problem with – with the stipulation that when we at the state level need to raise revenue that the towns do not come running to the Legislature and say, don’t raise the state revenue because you’re going to be affecting our local revenues.”

(Kinzel) Obuchowski says he expects that his committee will consider several requests by individual towns this session to impose a new local option tax to help reduce their municipal tax burden.

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

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