Reluctant committee approves Act 60 reform bill

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(Host) An Act 60 reform bill cleared the House Ways and Means committee on Wednesday. Many members of the committee said they are reluctantly backing the measure as a way to help lower property taxes.

VPR’s Bob Kinzel reports:

(Kinzel) Although the committee vote to support the so called consensus plan was 8-3, it’s clear that a number of committee members who voted for the bill are not very enthusiastic about the proposal.

The plan creates a two-tiered statewide property tax system: one rate for residents that would be tied directly to the amount that a town spends on education, and a second fixed rate for all businesses and non residents. The proposal also increases the state sales tax from 5% to 6% and expands the sales tax to include beer and soda.

The new revenue in the bill allows the committee to increase the state block grant from roughly $5,500 per student to $7,000. Ways and Means Chairman Dick Marron (R-Stowe) says the plan should reduce property taxes by roughly 30% across the state:

(Marron) “I think that this is a reasonable compromise, which I believe certainly I think has the support of the administration – which is a milestone for me and hopefully will have the support of the Senate. And so I’m encouraged by the fact that we may finally be getting property tax reform to some extent and end some of the divisiveness that has occurred under Act 60.”

(Kinzel) At least half of the committee members said they preferred the panel’s original Act 60 reform plan. This was a proposal that relied more heavily on the sales tax and the income tax and less on the statewide property tax. The committee dropped the plan after Governor Jim Douglas said he would veto any proposal that included an increase in the income tax.

Representative Bob Rusten (D-Halifax) said he hoped that the committee’s original approach – known as H462 – could be considered again in the next few years:

(Rusten) “I think our passage of 462 pushed the agenda around anything for Act 60 this year. I also think 462 raised the expectation of Vermonters of wanting a much more substantive change to our education funding law and reduction of property taxes. I think Vermonters will continue to want that expectation to be met and I hope the Legislature in the future will do so.”

(Kinzel) The measure now goes to the House Appropriations Committee for its review. It’s expected that the full House will debate this bill sometime next week.

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

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