(Host) The House has given its preliminary approval to legislation that lowers the statewide property tax for education by eight cents. The Douglas administration is considering a plan to lower the rate even further when the bill is considered by the Senate.
VPR’s Bob Kinzel reports.
(Kinzel) When the Legislature passed Act 68 several years ago, it included a provision in the bill to make certain that any surpluses in the state’s Education Fund be returned directly to taxpayers.
The mechanism to do this is through an adjustment in the statewide property tax rate. Act 68 established a residential rate of $1.10 and a non-residential rate of $1.59 and it calls on the tax commissioner to recommend reductions in the rate in the event of a surplus.
Last month Tax Commissioner Tom Pelham proposed an eight-cent cut in the statewide property tax rate based on a sizeable surplus in the Education Fund. Williston Representative Mary Peterson told her House colleagues that the House Ways and Means Committee agrees with the administration’s recommendation:
(Peterson) “Accordingly, this bill drops both the non-residential and homestead rates eight cents for the upcoming ’05-06 school year. This reduces net education taxes by $44.1 million from the statutory rate, while maintaining the full five percent stabilization reserve.”
(Kinzel) Londonderry Representative Rick Hube voted for the bill but said he was concerned that few property taxpayers would actually experience much relief because many local rates are increasing:
(Hube) “Unfortunately, though we are voting here today to reduce rates, many Vermonters’ tax bills will actually increase even if the Education Budget is level-funded. In fact, property values across this state are increasing at double-digit rates. We have a host of issues that we as a body must address.”
(Kinzel) Last week, legislative leaders were told that revenues are coming into the state treasury above projections. Tax Commissioner Pelham says it’s likely that the governor will urge the Senate to reduce the statewide property tax rate by at least another cent beyond the House reduction:
(Pelham) “This was good news and it is more revenues into the Education Fund than was anticipated. And the governor’s position is that we should lower property tax rates as much as possible.”
(Kinzel) The House is expected to give its final approval to the bill on Friday.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.