A House panel will bring the property tax rate down from an initial 7 cent increase down to 4 cents for residential homeowners. The proposal pushes commercial rates up 8 cents.
The House Ways and Means Committee took a straw poll on the proposal on Tuesday, and lawmakers supported it in a 7-4 vote. Rep. Adam Greshin, I-Warren, voted against the proposal because he said the 8 cent increase is a roughly 5 percent jump in the tax for non-residential taxpayers and it “strains the notion of fairness.”
Though legislators on the panel are still working through a number of details in the committee bill, they agreed to a 98 cent tax on the base rate for homeowners and a $1.52 rate for commercial payers. The base education amount, which is used in the formula for calculating the actual rate property taxpayers are assessed, will go up to $9,382.
Taxpayers who earn less than $47,000 a year will see no change in their income sensitized rebate under the plan. Middle class taxpayers who earn between $47,000 and $90,000 and get a partial subsidy will see a slight adjustment in rebates, according to Rep. Janet Ancel, chair of the committee. The slope has been extended and now includes people who own houses valued at $250,000. (Previously, the cutoff was $200,000.)
The panel lowered the limit on the total amount in income sensitivity rebate money that can be distributed to an individual household from $8,000 to $6,000.
In addition, the base income rate will go from 1.84 percent to 1.9 percent. Raising that rate, Ancel says, will address growing inequity in the Education Fund.
“This bill reduces the impact, and more fairly distributes the impact as compared to the recommendation from the administration,” Ancel said.
The tax reduction comes from changes to the formula numbers and $6 million in surplus funds.
School budgets came down from the anticipated high of 3.8 percent to 3 percent, Ancel said, and gave the committee more leeway (roughly $8 million) to reduce the rates.
Nevertheless, spending went up 3 percent, she said, “and that 3 percent is going to show up in the rates, but we need to recognize the fact that they went up less than anticipated. That’s the work of school boards.”
Gov. Peter Shumlin and the Vermont Department of Taxes recommended a residential tax increase of 7 cents next year unless school boards could significantly reduce spending.
The statewide property tax is going up 5 cents this year.