Senate passes Act 60 reform

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(Host) By a vote of 27 to 1, the Vermont Senate gave its approval on Wednesday to the compromise Act 60 reform bill.

VPR’s Bob Kinzel reports:

(Kinzel) The bill increases the sales tax from 5% to 6% to help reduce property tax burdens. A number of senators made it very clear that they were reluctantly accepting this provision in order to reduce property taxes on average by 20% across the state.

The proposal creates a two-tiered property tax system; a rate of $1.10 for residents and a rate of $1.59 for businesses. The business rate will be fixed while the residential rate will increase if a town spends more than the state block grant of $6,800 per student.

Senator Jeanette White (D-Windham) said it was difficult for senators who represent counties along the New Hampshire border to accept the sales tax increase:

(White) “I voted for its passage because of its overall effect. But I do have to take exception to the increase in the sales tax for two reasons. It is a regressive tax that hits those at low and middle incomes harder than those at higher incomes. And it also has the potential to have a very negative impact on the Connecticut River Valley. Our businesses are already at a disadvantage to those across the river and I believe this is another nail.”

(Kinzel) Governor Jim Douglas said he was very pleased by the Senate vote because Douglas thinks the legislation will help heal some deep wounds over Act 60 in certain communities:

(Douglas) “First it ends the divisiveness of Act 60 by eliminating the sharing pool and the need for local fund raising. It alleviates to some degree the burden of the property tax, which has become oppressive and provides some disincentive to spend excessively at the local level. So I think it’s an important step, it’s movement in the right direction. But I don’t want to pretend to anyone that this is the last time we’ll be debating this topic.”

(Kinzel) The measure now goes to the House for its consideration. A final vote is expected in that chamber by the end of the week.

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

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