VLCT urges changes in Act 60

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(Host) The Vermont League of Cities and Towns is urging the Legislature to make some important changes to Act 60 – changes that the League says will help lower local property taxes. The Dean administration says the proposal is short-sighted.

VPR’s Bob Kinzel reports:

(Kinzel) In the past few years the value of property across the state has increased dramatically – in some regions, the grand list has risen more than 30% over the last three years. Because the statewide property tax of Act 60 has remained constant at $1.10, this means the state is collecting a lot more money from local communities for education.

In the 2002 fiscal year, the statewide property tax raised $424 million – next year with the growth in the grand list it’s expected to bring in $483 million – an increase of $59 million in two years. But funding for the state block grant will increase by just $7 million during the same period.

Steve Jeffrey, who is director of the Vermont League of Cities and Towns, says that’s more than $50 million that’s being taken from local taxpayers to pay for other functions of state government, and Jeffrey says that’s wrong:

(Jeffrey) “The best way to really address that is to be sure that the block grant is adjusted, or the statewide education tax is adjusted, downward to be able to reflect this growth, and not just basically put the state on a binge to be able to use those increases in property taxes to fund state general fund tax revenues.”

(Kinzel) Administration Secretary Sean Campbell says the VLCT analysis is shortsighted because the Education Fund helps pay for other educational expenses such as special education and transportation costs. Campbell says a strong Education Fund means that less money has to be transferred from the General Fund to support education programs.

In the current fiscal year, the General Fund will appropriate roughly $255 million to the Education Fund:

(Campbell) “We have a lot of pressures and I think if the Education Fund, for example, is healthy on its own in terms of what it can generate with the property tax. Then we have to look at whether or not we need to reprioritize some of the General Funds that go into the Education Fund. We have to remember, the Education Fund is not supported just by property taxes. There’s a tremendous amount of General Funds that go in there as well and there’s tremendous pressure against those funds in the General Fund.”

(Kinzel) It’s likely that both the House Ways and Means Committee and the Senate Finance Committee will examine this issue in January.

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

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