VLCT considers income tax surcharge for all Vermonters

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(Host) The Vermont League of Cities and Towns wants to lower property taxes by increasing income taxes.

Next week, the League will consider a plan for a 1 % income tax surcharge on all Vermonters.

VPR’s Bob Kinzel reports:

(Kinzel) The VLCT has identified property tax reform as their top priority for this year’s statewide and legislative races.

Steve Jeffrey is the executive director of the League. He says property tax burdens are rising because of a combination of factors including soaring property values and the imposition of mandates at the state and federal level.

(Jeffrey) “I’m hearing all sorts of reaction and concern and really trying to make this an issue of priority in this election and this upcoming Legislature.”

(Kinzel) Next week, the League will hold its annual meeting in Barre.

Jeffrey is hoping that the organization will support a plan that he says will significantly reduce property tax burdens.

Under the proposal, a 1 % income tax surcharge will be imposed on all Vermonters. Jeffrey says this new tax will raise roughly $120 million.

If the plan is implemented, he says Vermont’s statewide residential property tax rate could be reduced from its current level of 95 cents to just 30 cents.

(Jeffrey) “What we’re proposing was recommended last summer by a legislative summer study committee that recommended the imposition of a 1.5% tax on the income of Vermonters which would allow us to reduce substantially the residential tax rate estimates are down to about 30 cents as a base for that which we think would go a long way to addressing over reliance on the property tax.”

(Kinzel) Governor Jim Douglas has proposed imposing a 3 % cap on all local education spending to limit future property tax increases.

Under Douglas’s plan, the cap could be exceeded only if a super majority of 60% of a town’s voters supported the higher amount.

Jeffrey doesn’t think the governor’s proposal addresses the real factors driving local school budgets:

(Jeffrey) “That kind of rankles those of us who believe in direct democracy and the ability of voters to make those decisions. And they’re the ones ultimately ending up paying the taxes.”

(Kinzel) The new plan will be presented to the full membership of the VLCT on Thursday, October 5th.

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

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