Editor’s note: This opinion piece is by Doug Hoffer, a candidate for state auditor.
There he goes again. A recent VPR story quoted Brian Dubie as saying “Vermonters have the highest property taxes in the country.”[1] As with his comments about Vermont’s income taxes,[2] this statement is less than meets the eye.
First, Mr. Dubie is undoubtedly referring to Census data for state level property taxes.[3] As has been reported many times (and as Mr. Dubie well knows), Vermont is the only state in the country that has shifted education costs to a statewide property tax. As a result, statewide comparisons for this particular measure are meaningless.
When we look at state and local per capita property taxes Vermont ranks seventh behind NJ, WY, CT, NH, NY, and RI.[4] But there is a fundamental problem with these figures.
The figures do not account for the amount of property taxes paid by non-residents, which is an important consideration in a state ranked #2 in the percentage of vacation homes. In 2007, the Joint Fiscal Office estimated that Vermont exported approximately $244 million in property taxes paid for second homes and commercial properties by non-residents. If this is subtracted from the Census figure, Vermont drops down to 16th – quite a different story than “the highest in the country.”
Important policy debates should be based on relevant facts, not figures intended to mislead.
Note: The Census Bureau acknowledges that state tax rankings can be misleading.[5]
Doug Hoffer
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[1] Wednesday 9.8.10 http://www.vpr.net/news_detail/88767/
[2] See my response at Seven Days (http://7d.blogs.com/blurt/2010/09/visions-of-an-auditor-to-come-hoffer-challenges-dubies-numbers.html) and vtdigger.org (http://vtdigger.org/2010/09/01/more-time-sir-um-probably-not/) .
[3] http://www.census.gov/govs/state/
[4] Author’s calculations from Census data at http://www.census.gov/govs/estimate/.
[5] “The ranking tables should be interpreted with caution; analysis based on rankings or per capita statistics can be misleading and misinterpreted because of subtle yet important differences in state government organization and economic structure. For example, using total taxes or per capita taxes as a measure of tax burden on the citizens of that state can be misleading because different states use different approaches to taxation, comparing only the total taxes collected by each state is not enough to understand the economic impact of those states’ taxes – one must also understand how those taxes are collected. Comparing taxes across states can be difficult. The Census Bureau’s statistics on tax revenue reflect taxes a state collects from activity within the state, not necessarily from its people within a state. Alaska, for instance, does not have general sales taxes or individual income taxes, but it does collect severance taxes from companies that extract oil and natural gas. Like Alaska, Florida does not collect individual income taxes, instead Florida relies heavily on a general sales tax, which, because of its tourist industry, is partially supported by visitors from outside Florida. In that sense, both Alaska and Florida collect “exported taxes” – taxes from people or organizations that may reside outside of their state.” http://www2.census.gov/govs/statetax/2009stcmethodology.pdf#page=3
