Changes to property taxes receive initial approval from House

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(Host) The House has given preliminary approval to legislation that makes some significant changes to the statewide tax rates and rebate system of Act 60. There was a spirited debate over the size of rate reductions for residential and non residential property owners.

VPR’s Bob Kinzel reports.

(Kinzel) The legislation addresses one of the chief complaints about Act 60: the concern that rebates for people who qualify for income sensitivity are mailed out at a different time than property tax bills. Under this bill, the state will send money directly to towns to cover the cost of all the residents who qualify for the income sensitivity program. The towns will then send out a tax bill that reflects the lower tax burden. The plan ensures that the relief money is used directly to lower property tax bills.

Burlington Representative Johannah Donovan told her colleagues that this is an important change:

(Donovan) “This action will allow the vast majority of Vermonters who pay property taxes based on their income to receive a tax bill from their town for what they truly owe, rather than getting a check and then a month later receive a higher than necessary tax bill.”

(Kinzel) Because there’s a surplus in the Education Fund, the legislation also lowers the statewide tax rate for residential and non-residential property. Act 68 sets the residential rate at $1.10 and the non-residential rate at $1.59. This legislation lowers each rate by 15 cents.

The bill includes a new cap on tax burdens for lower income property owners. A group of primarily Republican lawmakers tried to remove this new cap and they attempted to block an expansion of eligibility levels for the income sensitive program. They argued that the statewide tax rates could be lowered by an additional three cents if their plan was adopted.

Pittsford Representative Peg Flory said the proposal would help everyone who pays the non-residential rate:

(Flory) “We have tried to come up with a system that protects the lowest income. But it does have some problems and that includes the burden that we place on small businesses and on rental property owners, as well as on farmers and people with more than two acres. You can’t forget they are not income sensitized.”

(Kinzel) Representative Donovan strongly opposed the plan. She said it would hurt residential taxpayers who need relief the most:

(Donovan) “So this does not make any sense to us. We feel that it increases property taxes also for the lowest income Vermonters.”

(Kinzel) The full House rejected the Republican plan by roughly a two to one margin. The bill also caps any single homeowner rebate to $6,000. The Legislation is scheduled to come up for final approval in the House on Friday.

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

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