(Host) Governor Jim Douglas has unveiled a property tax relief plan that he says will save state taxpayers roughly $35 million a year.
The key to the plan is a cap on local school spending.
Democratic leaders say the proposal isn’t an effective way to lower property tax burdens across the state.
VPR’s Bob Kinzel reports:
(Kinzel) For the most part, Douglas’s plan contains ideas that he proposed during the winter that were ultimately rejected by lawmakers.
The Governor says property tax burdens are rising sharply because of unsustainable increases in local school spending.
He notes that school spending has increased at an annual rate of roughly five and half percent since 1999 at a time when student enrollment has declined by almost 10 %.
Under Act 68, households with incomes under 85 thousand dollars pay their school taxes based on a percentage of their income – usually between two and two and half percent.
Tax Commissioner Tom Pelham says it’s clear that income sensitive families are voting for higher school budgets because they don’t feel the full impact of the property tax.
(Pelham) “You have people who are income sensitized really not contributing to that increase growth but it is a zero sum game. Somebody else has to pick that up.”
(Kinzel) House Speaker Gaye Symington says the commissioner’s logic is deeply flawed because a decision to boost local school spending also increases tax burdens for the income sensitive households.
(Symington) “Basically what that argument is saying is property taxes aren’t high enough. I think that’s baldly ridiculous. Property taxes are too high. And Vermonters think it is more fair to pay your schools taxes based on your ability to pay – based on your income. They don’t need to be more connected. They don’t need their property tax bill to be more painful.”
(Kinzel) Governor Douglas wants to restrain local spending by placing a 3 and a half percent cap on annual budget increases. Any larger amount would require support from 60 % of a town’s voters. Critics say the cap undermines local control – Douglas disagrees.
(Douglas) “I would suggest that this enhances it because it empowers communities to make heir own decisions about the rate of increase as they have now and also gives them an escape valve if they feel it’s necessary to exceed the cap.”
(Kinzel) Democratic gubernatorial candidate Scudder Parker says the local school spending cap is an arbitrary and ineffective way to help control local expenses such as health care and energy costs.
(Parker) “We need to be supporting communities and finding ways that they can partner with each other, they can improve the educational options that are available to their young people but do it in a way that costs less. And you don’t do that by hitting them with a hammer.”
(Kinzel) Parker also called on the Governor to support additional resources for child care and early education programs.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.