[R]ep. Carolyn Branagan, R-Georgia, urged her colleagues Thursday to use about $2 million from the education fund reserve to help avoid an increase in statewide property tax rates this year.
Branagan, vice chair of the House Ways and Means Committee, said freezing the base homestead property tax rate and the uniform nonresidential property tax rate this year would fulfill a Republican promise of no new taxes this year.
The committee voted 10-1 to accept Branagan’s motion, which would eliminate the need for a 2-cent rise in the homestead property tax rate and a 1-cent increase in the nonresidential rate this year. By moving the money from the reserve, rates would remain at 98 cents and $1.515, respectively.
The committee achieved the freeze by using $11.5 million from reserve funds and a transfer of $2 million from the stabilization fund, according to Mark Perrault of the Joint Fiscal Office.
Taking $2 million from the Stabilization Reserve within the education fund, would leave the reserve fund at about 4 percent. State statute requires a reserve of 3.5 percent. Full funding of the reserve is 5 percent. The total Education Fund budget for fiscal year 2016 is about $1.55 billion.
“The story here would be no increase to the homestead or non-residential tax rate; people would like to hear that,” said Rep. Jim Condon, D-Colchester.
“People would love to hear that,” agreed Rep. Alison Clarkson, D-Woodstock.
Rep. Janet Ancel, D-Calais, who voted against the motion, said that while the statewide rates would be frozen at the present year’s levels, the base tax rate on household income — for those who receive income sensitivity discounts — would inch up slightly, from 1.80 percent to 1.94 percent, as agreed to last year.
“Income (based) payers are going to pay more,” Ancel said.
Ancel also said she was concerned about drawing down the stabilization reserve.
Rep. James Masland, D-Thetford Center, commended Ancel for voting against the proposal. “I will vote ‘yes’ on the bill, but I think it’s too much,” Masland said. “Madame Chair, I commend you for your vote.”
Masland said he felt “uncomfortable,” with some of the directions being taken, saying, “I don’t know where the hell we’re headed.”
Clarkson said the reserve has dipped to below less than 4 percent in the past.
Prison high school
While the House Ways and Means Committee does not have the jurisdiction to restore $1.7 million in funding for the corrections department’s Community High School of Vermont, the committee agreed to write a letter in support of the program.
The governor has recommended cutting the Community High School of Vermont budget from $3.8 million to $2.1 million. The program’s funding comes from the Education Fund, but the administration proposes that the savings be applied to the General Fund.
Branagan said candidates last fall heard from Vermonters who wanted lawmakers to put the brakes on property tax increases.
With the action of the House Ways & Means Committee, that call for no new taxes has been heard, “at least at the state level,” she said.
“The school board members across the state worked very hard to limit the increases in most communities,” Branagan said.
Branagan said the 50-plus Republicans she serves with in the House are “committed to no new taxes.”
“This is what I am fighting for — no new taxes, and we have found a way,” she said.
