(Host) Governor Jim Douglas is defending his plan to reduce the statewide property tax rate of Act 60. A number of Democratic lawmakers are critical of the proposal because they say it will primarily benefit wealthier Vermonters and the state’s business community. Douglas says his plan will reduce tax burdens for groups who are not protected under the income sensitive provisions of Act 60.
VPR’s Bob Kinzel reports:
(Kinzel) In his Inaugural address, the governor proposed cutting the statewide property tax rate from $1.10 to $1.07. Douglas says he made the proposal as part of an effort to stimulate debate at the Statehouse over Act 60.
There’s no doubt that it’s done that. House Democratic leader Gaye Symington is critical of the plan because she says it doesn’t give tax relief to all Vermonters. Symington says Vermonters who currently participate in the income sensitivity program of Act 60 will receive no relief at all. She says that the groups that don’t qualify for income sensitivity – namely households with incomes greater than $80,000, businesses and second home owners – will get most of the benefits:
(Symington) “I think that all Vermonters need property tax relief, not a particular segment. And especially this proposal, one of the groups that would definitely benefit are folks with incomes that are higher, too high to qualify for income sensitivity. I don’t think it’s fair to then go and say that group that is currently paying based on their income are the ones we should target not to get any tax relief.”
(Kinzel) But Douglas argues that the groups that don’t qualify for income sensitivity are precisely the ones that need relief, because they’re the ones who have shouldered much greater tax burdens over the past few years as property values have increased:
(Douglas) “But there are some businesses that will benefit from this, absolutely. But remember, most Vermont businesses are quite small. They’re family-owned operations, they’re mom and pop companies. So businesses of all sizes will benefit, homeowners who have more than two acres will benefit, many different Vermonters will.”
(Kinzel) Douglas says his tax cut plan is a better idea than putting more money into the state block grant for education because the higher block grant will not necessarily result in lower tax rates at the local level.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier