(Host) House and Senate negotiators have agreed to the basic outline of a financing package to help reduce property tax burdens across the state. The proposal creates a two-tiered property tax system. There will be one rate for residents and a different rate for businesses. The plan also increases the state block grant to nearly $7,000 per student. The compromise raises nearly $50 million in new tax revenues to reduce property tax burdens.
The stalemate over the proposal was broken when the Senate agreed to the House’s plan to increase the sales tax from 5% to 6%. The House wanted to apply the sales tax to beer and soda, but Senate President Pro Tempore Peter Welch wouldn’t accept that plan:
(Welch) “In the end we decided to go with the sales tax as cleaner simpler and allowing us to avoid all the splinter taxes. And the obvious trade off is we’re going to be able to lower homeowner property taxes by over 20%.”
(Host) Under the plan, the increase in the sales tax would be temporary. That’s because the conference committee agreed to substitute revenue from a new tax on Internet purchases and mail order companies as soon as Congress votes to allow states to implement this tax.
House Ways and Means Committee Chairman Dick Marron says the so called “streamlined sales tax” plan could be in place in several years:
(Marron) “We’re optimistic about that. We think that protects our Main Street merchants and we hope that goes into effect soon.”
(Host) The Act 60 reform bill could be presented to both the House and the Senate for their consideration on Friday.