[T]he Senate Finance Committee voted out a bill Tuesday that would mean higher property taxes than the version the House passed last month.
The legislation, H.509, determines education property tax rates for the next fiscal year.
The panel approved the legislation late Tuesday afternoon on a 5-2 vote. The move came several days after the Senate Appropriations Committee unanimously approved its version of the fiscal year 2018 budget, which includes $14.5 million more in spending than the Houseโs budget.
The contribution, the stateโs share of which this year is $7.9 million, would instead be paid for out of the education fund.
The change in the teachersโ retirement funding, along with other changes, would result in higher property tax rates in the next fiscal year. The adjustments in the budget impact the so-called yield rate, which is a key factor in calculating local tax rates.
The committee approved a yield rate of $10,015 for landowners who pay based on property value and $11,820 for those who pay based on income. The version of the bill the House passed last month set the yield at $10,077 based on property value and $11,851 based on income.
Lower yields correspond with higher local property tax rates.
The proposal provoked some concerns among members of the Finance Committee about the impact on the education fund.
The committee heard from legislative budget analysts that the property tax impact of the teachersโ retirement contribution is mitigated by about $26.1 million that is left over in the education fund.
However, because that sum is available only this year, the property tax rate will likely increase more next year as a result of the shift with the teachersโ retirement.
Before the committee voted on the bill, several members suggested modifications, but none of those moved forward.
Sen. Mark MacDonald, D-Orange, offered a proposal to raise the income threshold below which households qualify to pay based on earnings, as opposed to property value. The goal was to keep pace with increases that households have seen in their incomes.
Pollina proposed requiring people in the highest income brackets to pay 2 percent of their earnings into the education fund. He said that would make the system more fair because high-income families would pay a similar portion of their earnings to the state as low- and middle-income ones.
Degree brought in language mirroring a proposal Gov. Phil Scott outlined earlier in the day that would have teachersโ health care benefits negotiated at a statewide level.
Senate leadership and the committee chair, Sen. Ann Cummings, D-Washington, initially were reluctant to take up the proposal, citing the late date in the legislative session.
Degree and the administration say it would save about $26 million in the education fund annually.
Others are skeptical the savings would be realized. Opponents raise concerns the proposal would step on the collective bargaining rights of teachers.
The committee tabled discussion of the plan, with the option to take testimony later in the week and to offer it as a floor amendment to the bill.
The bill will come up for a vote before the full Senate on Thursday.
Scottโs communications director, Rebecca Kelley, criticized the committeeโs action regarding taxes, saying the governorโs proposal makes it unnecessary to raise rates.
โItโs unfortunate the Senate Finance Committee voted to support the property tax increases in the Senate Appropriations Committee budget on the same day that Gov. Scott, along with school board members and superintendents from around the state โ further detailed a plan to achieve $26 million in education savings,โ Kelley said in a statement Tuesday evening.
โGov. Scott will continue to fight on behalf of taxpayers to realize these savings, reducing costs to the education fund, and providing property tax relief, instead of increases. We hope the Legislature will join us,โ she added.
