Senate President Pro-Tem John Campbell. VTD/Josh Larkin
Senate President Pro Tem John Campbell wound up in the political soup on Tuesday. The Democrat from Windsor County narrowly avoided a tax sale of his home in Quechee on Tuesday, but not before his mistake was picked up by the media.
Campbell’s $6,000 property tax bill was due on Feb. 4, and he had neglected to pay it as of Monday. That fact came to light when his house was included in a recent listing for the Town of Hartford’s upcoming June tax sale.
“This one caught me,” Campbell said in an interview. “It’s unfortunate but I’m doing what needs to be done. … I didn’t want anyone to think I was hiding or something.”
The state senator paid the bill in full on Tuesday.
Campbell, a trial lawyer, said in an interview that he got behind on his bills because he had neglected his practice in order to lead the state senate from January to May.
“Sometimes people think all lawyers are very wealthy,” Campbell said. “That’s not the case when you’ve been in the Legislature for 12 years. It was my mistake not getting it done quicker. Like some small businesses, cash flow isn’t as good as it is during other parts of the year.”
Most of Campbell’s work as a litigator is taken on a contingency fee basis. Lately, he said, many of his clients don’t have money to pay for an attorney, and he has provided more pro bono services than usual. He takes corporate, contract and personal injury cases.
Campbell, who is the sole proprietor of a legal practice, owed $6124.81 in taxes, including penalties, for his 2,788 square foot, $511,000 house, which sits on a 2.6 acre lot in Quechee, according to a story written by John P. Gregg that was printed in the Valley News on Tuesday morning. The total tax bill for the year was more than $10,000. http://www.vnews.com/06072011/7853628.htm
By late afternoon, Campbell’s tale of woe had been picked up by the Associated Press, Vermont Public Radio, vt.buzz (the Burlington Free Press blog) and the Magnificent Seven, the Seven Days aggregated news email subscription service.
The Vermont GOP got a hold of the story by early evening and used it as a graphic illustration of just how hard it is for Vermonters – of all stripes – to afford the state’s high property tax rates.
Pat McDonald, chair of the Vermont GOP, sent out an email blast to the party listserve using Campbell’s predicament as a cautionary tale for all Vermonters who have difficulty paying their property taxes.
In an interview, McDonald said, “There are so many people stuck on this issue. People are really struggling.”
McDonald blamed the Legislature, which is dominated by Democrats and led by Campbell and House Speaker Shap Smith, for sidestepping the need to reform the education property tax system. McDonald said Democratic lawmakers missed an opportunity to focus on the impact of the state’s high property taxes on the cost of living in Vermont.
“Obviously Sen. Campbell is not alone,” McDonald said. “I know because I work in Barre City, and you see the names of people you know. These people — they’re our neighbors and friends whose houses are sold at tax sale because they are not able to pay.”
McDonald said Campbell’s situation, which was embarrassingly publicized, “sadly brings home a case of someone in the public eye who has issues like our neighbors and our friends.”
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So the Republicans think property taxes are a problem. Does that mean they will support changes to the municipal non-education portion of the property tax? Unlike the education property tax, the municipal version is not based on ability to pay and is terribly regressive. Wealthy homeowners can pay as little as 1% (or less) of their income for municipal property taxes while moderate-income Vermonters can pay more than 4%.
How will the Republican plan address this problem?
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Last I knew, one of the favourite themes of Republicans is the abolition of the income tax. Their idea of the ideal replacement? The property tax. One can only speculate on why a top Republican in Vermont is griping about one of her party’s favourite means to extract wealth (or cheap real estate) from people of low income, low fortune, and limited means. My guess is if the Republicans held both houses and the fifth floor in the Pavillion, Ms. McDonald would be singing a different tune. What do you think?
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I believe that a significant part of the problem is the extremely low compensation that legislators receive. Our legislative leaders are paid less than half of minimum wage for the hours we actually work. For those at the very top, like Senator Campbell, the hours are so long that the rate of pay is approaching $1.50 – $2.00/hour, when viewed on a year-round basis. The Snelling Center confirmed this in a study several years ago.
It is an honor to serve and we do important and necessary work on behalf of the people of Vermont. While I do not expect the job to make us wealthy, it would seem only right to pay enough so that working folks could afford to serve.
In order to remain a true citizen’s legislature, the job should pay enough so that “regular folks” can afford to pay their taxes and feed their families. Senator Campbell’s delinquency illustrates that it does not.
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I think you’re right, Warren, it ought to pay well enough so that “regular folks” can serve, but since said “regular folks” can seldom raise the funds necessary to run a campaign to secure the election, what good does it do to raise the pay for someone who will never serve?
At the same time, why should Vermonters cough up more taxes to pay higher legislative salaries, when such salaries would often go to people like you, Brian Dubie, Phil Scott or Peter Shumlin who scarcely need it?
I agree that legislative pay ought to be increased for those who have little income prior to election, but I see no need to increase pay for those who have great incomes already.
So, create a scheme which compensates the Governor, Senators, and Representatives at rates which are inversely proportional to their income from private life, and I’m sure most Vermonter’s will support it. However, the likeliness that such a bill would ever get voted out of committee is also inversely proportional to the private incomes of said committee’s members. So where do you figure that places the odds?
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Warren makes an excellent point. Legislative pay is so bad that it is mostly rich, retired or self employed people who can afford to serve.
Yes, there are some teachers and folks working for non-profit organization who serve too. This creates potential conflicts of interest with legislators who are employed by interest groups (even if the interest groups do great work). And there is the occasional poor person, who chooses to work at a quick mart or drive a school bus when the lege is not in session — but most people don’t want to make that much of a financial sacrifice for a temporary part time job in the legislature.
Middle class people, with middle class jobs and children and mortgages, cannot afford to serve. This is a problem. If we want this ‘citizen legislator’ concept to work, we need to pay legislators a reasonable wage.
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Two things:
1) The senator’s tax bill is that high because his income is high. If his income was below average he would be paying his educational property tax based on his income and it would be much lower. There may be a seasonal cash flow issue but not poverty.
2) The current educational funding system is a reform effort passed by a Republican house and championed by Jim Douglas. Will the head of the Republican Party please accept a little more ownership?
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Hey Mr. Hoffer,
“Primary homeowners with incomes under
$47,000 may qualify instead for a reduction in their
assessment, and/or a rebate on their total property
taxes, INCLUDING MUNICIPAL TAXES.” (http://www.vermontrealestatetoday.com/newsletter/2011-Special-Report-on-Vermont-real estate-taxes.pdf)
Doug, you post often and you are often wrong. I’m sick of it.
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Can’t find where your article says Doug H. is wrong – read it through twice.
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Interesting
Is it your contention that municipal non-education property taxes are not regressive? Notwithstanding the circuit breaker provision, it’s kind of a tough argument to make since the vast majority of moderate-income homeowners are not eligible.
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News Flash for Doug Hoffer: A smart solution is to cut spending and reduce taxes. It would work for Republicans, Democrats and Progressives alike!
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George Bush cut taxes. How’s that working out?
Are you seriously suggesting that wealthy Vermonters need more tax cuts?
And please tell us exactly what spending you would cut.
Republican sound bites are not “solutions.”
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“George Bush cut taxes. How’s that working out?”
Been working out real good if you’re in Bush’s income bracket. If not, well, hey, so what, that’s your tough luck.
I liked Warren’s comment about legislative pay being so low that they are working for 3-4 months on what minimum wages were forty years ago. This Pat McDonald could easily have made the same gaff if she were in the legislature and trying to run her own biz as well for those months. This is what the real issue is about here.
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Note to Steve Farnham,
Steve, where do you get your idea of my income level? I can honestly tell you that I live in a MUCH lower pay world than the people you named! My legislative pay, plus my social security is all I have . . . along with a very small amount of retirement savings.
Please, don’t make assumptions based on no knowledge whatsoever about me.
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Back to the subject: the need for property tax reform in Vermont. The system has become so complicated even the Pro Tem of the Senate almost let his house go to the highest bidder over $6K and became victim to the law he refused to reform. Why does Campbell call it shameful to be late on such a ridiculous tax bill. I call my taxes of $6,000 a year as Rent not tax. Did AP scrub the story? I have a hard time even finding it. No bigee, towns are foreclosing on landowners for outrageous taxes, in an arbitrary unregulated fashion. much more on my blog http://traveloguefortheuniverse.blogspot.com, see tax liens.
this is a repeat of tactics used in the 1930′s. get used to it.
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Somehow NH still has legislators even though they receive $200/2 year term. If they can do that, we certainly don’t need to be paying legislators more in VT. This issue of not being able to pay property taxes is a sad reality of being human and living beyond your means. Lesson learned.
It’s shameful and disrespectful to Sen. Campbell to see this as a stumping opportunity for raising legislative pay…which would require money out of his pockets he can’t afford to give.
http://www.empirecenter.org/html/legislative_salaries.cfm
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To be clear, Kristin, the Democratically controlled legislature REDUCED their pay last year. So it isn’t fair to say that Campbell is using this, “as a stumping opportunity for raising legislative pay.” Indeed, Campbell is blaming nobody but himself.
True, Kitzmiller raised this point. His point is that you can and will find people to do this job for $12,000 per year. But these people will all be retired or independently wealthy. Middle class, working people won’t be able to afford to stand and serve and that isn’t good for our democracy.
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Regarding the need for tax reform, those who advocate for taxing the rich more ought to look no further than the state payment system and here’s why:
1. Middle income Vermonters (like the Campbells)are struggling to pay the property tax at the current levels, because they receive little or no state payment from the Ed Fund. I am the tax collector in my town and I know who gets the prebates and who doesn’t. Middle incomers and businesses are carrying the ball for most everyone.
2. Our tax policy regarding state payments is seriously flawed. A real life example: A couple in my town own a $450,000 home, significant commercial real estate and a home in a gated community in Lido Key, FL. Because they fit the state payment formula so well (low income/high value) they receive $4,500 in state payments against a $6,000 tax liability–millionaires who are paying just $1,500 per year in property taxes. The state Ed Fund (that’s all the rest us) pays all of their education tax and half of their municipal taxes. Every town clerk/treasurer can tell you similar stories, it’s unfair to the working folks.
3. Reducing taxes overall,and fixing the state payment problem, would especially help moderate to middle-income Vermonters who are fast becoming a myth.
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Some clarifications based on Wendy’s post. First of all, any Vermonter with household income of about $100,000 or less can pay the school taxes on their primary residence based on their income. Two-thirds of Vermonters are paying school taxes based on their income instead of paying a school property tax on their primary residence. If the Campbells are paying school property taxes on their primary residence, their household income must be above $100,000.
Secondly, for the example of the couple with a $450,000 home and “significant commercial real estate,” if that commercial real estate is in Vermont, they would pay property taxes on it as there is no provision to pay school taxes based on household income for commercial real estate. So this couple would not be paying just $1500 in property taxes. They would be paying this amount plus their taxes on the commercial property.
Thirdly, if someone is getting a reduction for both education and municipal taxes, they are getting a circuit breaker rebate, which was first put in place in Vermont in the 1970s. The Education Fund doesn’t pay these rebates for municipal taxes, only for education taxes. Money for rebates to offset municipal taxes comes from the General Fund.
Finally, while it’s a good idea to reduce taxes on low and middle income Vermonters, we should not be doing this by cutting state services that these Vermonters rely on including K-12 education, health care, state parks, higher education, mental health services, fire protection, child care, elder care. When we reduce these services in the name of cutting taxes, we’re hurting middle income Vermonters by increasing their costs and reducing their opportunities. The best way to reduce taxes on low and middle income Vermonters is to make our regressive tax system more progressive.
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First and foremost Vermont taxes income, not property, the idea that our property tax system is actually related more to property than income is a flawed. My neighbor with 160 acres gets a 50% reduction on his taxes, they have no mortgage, and operate a “horse farm” claiming very little income. This is an epidemic in Vermont, people intentionally manipulating their income to get the most from a broken system. Having served on a school board I saw parents dropping off their kids in $50,000 diesel pickup trucks (they do snowplowing and lawnmowing, etc) and yet their kids qualify for free and reduced lunch. It is illogical that a young couple with a negative net worth is subsidizing a neighbor with significant assets (their home). The “representatives” in Montpeculier can’t understand why we have a mass exodus of youth, yet they continue to make it worse, under the guise of helping.
It’s really, really simple. When I got my mortgage in 2007 I sat down with my banker, we went over my income, house insurance, and property taxes to determine how much house I could afford. We never discussed how much government cheese I was going to receive to offset my property taxes. Property taxes are part of the carrying costs of owning a home, if you can’t afford them you downsize, or perhaps homeownership just isn’t right for you. At the end of the day, since we started subsidizing property taxes on a broad scale, we still need to raise X number of dollars to pay for our schools. If we subsidize neighbor A then neighbor B has to make up the difference, or we need to increase the broad tax rate across all levels, and subsidize the bottom 70% even more to make up the difference.
70% of Vermonters are getting government cheese. If we step back, rebuild the whole damn system from the ground up, make people responsible for their own decisions, rates and tax bills will fall.
Fixing the sytem won’t be politically popular, but continuing on the slow road to suffocation is not a “plan”
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Actually, the property tax is the single biggest source of public revenue in Vermont. In 2010, Vermont collected about $1.1 billion in school and municipal property taxes. This does not include the school taxes paid based on income. Property taxes are regressive and consequently make Vermont’s entire tax system regressive. The next biggest source of tax revenue is the state personal income tax, which amounted to about $500 million in 2010, half of the amount collected in property taxes.
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Hey Paul,
Vermonters do not care if their state payment comes from the Ed Fund or the General Fund. The example I cited is commonplace with wealthy individuals getting huge breaks on their residential real estate, paid for by middle income folks, and non-residential owners. Paul, no matter how you try to defend this system it’s problematic and unfair.
Here’s another example of the flawed system, this one a state legislator in my area:
State legislator and wife own two properties: One a farm with several hundred acres (most under current use) that is the primary home, which he (a retiree) declares as his homestead and gets a sizable state payment. The other property is a camp on a lake in a different town, which she claims as her homestead and gets a state payment. With all the tax breaks avaialable to them in this manner they pay very little proeprty tax and they obviously have significant assets. I call that double-dipping–Michael Garnder calls it the governement cheese–and it’s perfectly legal under today’s tax code. Michael is correct: this tax code is punishing to middle incomers and young people, it’s a boon to retirees and trustafarians. Hence we are creating and acerbating our demographic problems with our policy bent.
Again for all of you looking to end tax breaks for the rich–look into the state payment/property tax deal!
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Paul,
If your property taxes are based on income are they really property taxes???
70% of Vermonters have property taxes based on income.
I know in Vermont if your maple syrup isn’t 100% pure you can’t call it maple syrup. It seems only the government can get away with such dilution of definition without being held accountable.
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Except for those who take advantage of the circuit breaker, municipal non-education property taxes are most assuredly NOT based on income. They are terribly regressive and unfair.
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That’s correct Doug, the municipal property taxes, which are a whopping 18% of my property tax bill, are regressive. They also represent the hard costs of infrastructure in a town, and as a percent of local budgets have shrunk relative to education taxes. Can you share why you are so passionate about a regressive tax? With a progressive income tax, and education tax are you trying to eliminate the bottom 50% from any tax obligation whatsoever? Gasoline taxes, vice taxes, etc are EXTREMELY regressive, where is the picket lines to “fix” those???
My town has done a better job of doing much more, with much less, than the state has done with education. People that I talk to don’t bemoan the fact our road crew works overtime when it snows, or that the select board gets a $500 stipend. They are furious that our school went from 347 students down to 194, has only marginally less staff, and spends money like a bunch of drunken sailors because the state of Vermont refuses to be honest and tell people that “there is no such thing as local control, get over it, we stole your local control with Act 60, we have devised a system where you subsidize your wealthy neighbor, and taxes were increased on a broad based scale to make up the difference…oh and P.S. we could unwind the whole thing, consolidate some schools, save a fortune, and lower your taxes but it wouldn’t be politically expediant to the politicians that use these subsidies to buy your vote”
My 2 cents