Lawmakers debate Douglas tax cut plan

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(Host) House Democratic leaders say they’re disappointed with Governor Douglas’s plan to cut the statewide property tax rate for Act 60. The Democrats say most Vermonters will not be affected by the proposal and that the major benefits will go to second home owners, the business community and people with incomes above $80,000.

VPRs Bob Kinzel reports:

(Kinzel) In his Budget Address to lawmakers, Douglas proposed lowering the statewide property tax rate of Act 60 from $1.10 to $1.07. Saying that the state’s Education Fund has a sizeable surplus, the governor also recommended a $20 million reduction in the amount of money that is transferred from the General Fund to the Education Fund.

The proposal is not sitting well with many Democrats because they feel most Vermonters will not benefit from the plan. House Democratic leader Gaye Symington argues that the governor’s plan will have no impact on households who qualify for the income sensitivity provision of Act 60. That represents roughly 75% of households in the state.

The winners, according to Symington, are groups not covered by income sensitivity – namely, second home owners, businesses and households with incomes above $80,000:

(Symington) “I think all Vermonters are crying for property tax relief, not just folks in those categories. If we’re going to be looking at property tax relief, we should do it in a way that’s more even handed across all taxpayers and across all towns.”

(Kinzel) Symington also says a decision by the governor to reduce the General Fund transfer to the Education Fund by almost $20 million will place a greater burden on local property taxpayers:

(Symington) “You’re relying more and more on the property taxes and you’re using those property taxes to, as I say, to make life easier over in the General Fund. We have tough choices in the General Fund, that’s for sure. But we should not be using these increased property taxes over in the Education Fund to avoid those tough choices.”

(Kinzel) The governor says he’s aware of these criticisms but he still believes his tax cut is a good idea:

(Douglas) “It will provide $13.3 million worth of relief. I’m not sure exactly who will receive it, but it’s the way the state can reduce the impact on property tax burdens. I heard a lot about that during the past year and with the uniform rate and the dramatic increase in the valuation of properties across the state, it’s a way that we can have an immediate effect.”

(Kinzel) The proposal will now be reviewed by both the House Ways and Means Committees and Senate Finance Committee.

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

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