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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Property Tax Reform Plans Up For Consideration In Senate

There’s a lot of discussion at the Statehouse about the rising burden of property taxes because for the second year in a row, there’s going to be a sizeable increase in the statewide property tax rate for education. This year the rate is scheduled to rise about seven cents.

This is happening because school budgets are increasing, student enrollment is declining, and local grand lists are going up at a relatively slow pace.

Senate President John Campbell says a new study shows that roughly a quarter of a billion dollars of property across the state is exempt from paying this tax and he doesn’t think all of them are entitled to the exemption.

"There are other ones that you know involve fraternity houses, sorority houses or other properties owned by universities that they rent out." Senate President John Campbell on the need to review all exemptions from the statewide property tax

“Now some of them as for hospitals, churches, you can understand but there are other ones that you know involve fraternity houses, sorority houses or other properties owned by universities that they rent out,” said Campbell. “So I think there are certainly areas to look at.”

Senate Republican leader Joe Benning, R-Caledonia, argues that the state needs to make major changes to the current education financing system.

Benning said the basic flaw of the system is that the statewide property tax rate is based on the total amount of school spending in every community in Vermont.

So he said even if a town level funds their own school budget this year, the community will still be facing the seven cent increase in the statewide rate:

“It removed from you and me the ability to have a vote on our property taxes in such a way that when we decided we were going to curtail the school budget it actually had a corresponding decrease in our own property taxes,” said Benning. “We don’t have that ability any more and to me that’s one of the fundamental problems with the system.”

Washington County Senator Anthony Pollin, P/D, also favors a new approach to funding education. He wants to replace the statewide property tax with an income tax surcharge.

“Everybody should be paying for education based on their income. I’m not saying that’s going to be an easy thing to do don’t get me wrong,” said Pollina.  “But the short answer is yes we should be funding education through an income and wealth tax so that it’s really based on someone’s ability to pay.” 

Both the Senate Finance and House Ways and Means committees are expected to review this issue in the coming weeks.