Sharing Provision Hinders Compromise on Act 60

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(Host) House Republican leaders say they need some time to review a new Senate Act 60 plan, but it’s clear that the proposal faces some major obstacles in the House.

VPR’s Bob Kinzel reports.

(Kinzel) Ever since Act 60 was put into place five years ago, most Republicans have campaigned to eliminate the sharing pool provision of the law. That’s the part of Act 60 that requires property wealthy communities to share money they raise locally to increase spending above the state block grant. In some cases, towns have to share between 50% and 75% of the revenue they raise with their local property tax.

Senate Democrats have now offered the Republicans a plan that does away with the sharing pool but it still relies on a lot of sharing of local revenue.

Here’s how it would work. The statewide property tax rate would be set at $1.38. This figure would boost the block grant to roughly $7,000 dollars per student. If a town wanted to spend less than this amount, their statewide property tax rate would be reduced; if they wanted to spend more, then the rate would increased.

Currently under Act 60, the town of Stowe shares about 60% of the money that is raised through the statewide property tax. This ratio would essentially continue under the Democrats’ proposal.

In contrast to the Senate proposal, the House passed a plan last month would allow towns like Stowe to spend as much as $3,000 per student above the block grant before any sharing would take place.

House Ways Means Chairman Dick Marron says the Senate plan still requires an enormous amount of sharing by property rich towns:

(Marron) “I think Senator Shumlin is arguing that this eliminates the sharing pool. I guess theoretically it does but…there’s still a lot of sharing going on because you’re using a statewide property tax. While our tax rate goes up in Stowe, we send a lot more money in the more we spend, the more we send in. So we’re still sending in a considerable amount of money based on our spending level.”

(Kinzel) Windsor Senator Peter Welch is a member of the Senate’s Act 60 conference committee. Welch says the Senate plan includes some sizeable sharing because that’s what the Brigham decision requires. And Welch says there can be no compromise on this issue:

(Welch) “To the extent that the opponents of Act 60 have focused on the shark pool, we’ve eliminated that and this is now, I think, some people stepping back and really disputing the underlying holding of Brigham – that taxpayers have to be treated equally, as well as students given an equal opportunity.”

(Kinzel) Republicans leaders will formally respond to the new Senate plan on Monday afternoon.

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

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