BENNINGTON — The idea of a local option tax has support on a committee considering changes to local government, but members haven’t decided what specific format they might recommend to the Selectboard.
Supporters of the idea consider it a method of reducing the burden on property tax payers while raising at least a portion of revenues from visitors to the area.
Whether to propose a 1 percent tax on sales and/or meals and rooms is one of the key issues the Charter Review Committee will consider. The panel was appointed to study the current charter for possible revisions. The Selectboard will then accept, reject or revise those recommendations for submission to the voters in March.
At their meeting Wednesday, some committee members favored adding the local option to the sales tax, while others indicated support for including the rooms and meals tax as well.
With a charter change, a 1 percent local tax can be added to the state’s 6 percent sales tax and/or the 9 percent rooms and meals tax and 10 percent alcoholic beverages tax.
After the taxes are collected by the state, 70 percent of the local option portion would be returned to the municipality.
The idea of a local option is an attractive one, Robert Ebert said, in that it shifts some of the burden from property tax payers and from residents when nonresidents are paying it. However, he added, “I think that meals and rooms should be excluded,” saying he believes that tax is high without adding a further 1 percentage point.
Daniel Malmborg said he believes meals and rooms taxes might more often be paid by nonresidents, while townspeople are likely to be affected by a hike in the sales tax.
Jonathan Cohen and P. Lynn Green expressed reservations about the effects on restaurants and motels if the meals and rooms tax is increased.
Green, owner of the Four Chimneys Inn, said that from discussions with people in the business she believes owners would be less likely to oppose a meals and rooms tax if some of the funding could be earmarked for tourism promotion.
Cohen recommended seeking the support of business owners by designating a portion of the new revenue toward promotion of the area. At any rate, he said, the committee should seek more input from the public on the tax issue.
Ebert contended that voters are more likely to support additional funding for street repairs or similar needs than for ads or videos to lure tourists.
Green said she also has heard that owners of lower- to medium-priced motels fear losing business to other towns if the rooms tax rises to 10 percent.
Committee members asked Town Manager Stuart Hurd to research what formats other Vermont communities have adopted for a local option tax.
He said the local revenue option was allowed for so-called gold towns after the passage of Act 60, which restructured Vermont’s education financing system. Those towns send more in taxes to the state than they receive back for their schools. They can adopt a local tax through a town meeting vote.
For so-called receiving towns like Bennington, the option tax now can be adopted, but only through a change in the government charter.
Communities that have adopted local option taxes include Montpelier and Brandon in 2016, Colchester in 2015 and Wilmington in 2012.
Manchester is among area towns with a local tax on rooms, meals and alcoholic beverages, adopted in 2008, and a local sales tax, adopted in 1999. Winhall adopted local option taxes in 2010, Dover in 2007 and Stratton in 2004.
The charter group also said Wednesday that an Oct. 26 forum on the charter review process will be rescheduled because of a potential conflict with an Act 46 merger informational meeting, scheduled for 7 p.m. at Mount Anthony Union High School.
