[S]outh Burlington voters will decide two tax measures in March, as the City Council approved votes on both a short-term rental car tax to pay for road maintenance and a local-option tax to pay for an arts center and indoor recreation facility.
The local option tax vote passed 3-1, and if approved by voters and the Legislature, will raise South Burlington’s sales tax from 7 percent to 8 percent, making it the first municipality in the state to do so. The current local option tax brings in about $3.5 million annually, and goes toward a police station bond and keeping property taxes low.
“We are eager to see economic development in the city and eager to have the services that these taxes might be able to fund that would serve at least the region, if not broader than that,” said City Councilor Meaghan Emery, who chaired Wednesday night’s meeting.
The City Council favored the local option tax over other an increase in property taxes because of an expected upcoming property tax vote from the School Board.
“We do not want to handicap the School Board if they complete their master visioning and planning process that could very well include a bond ballot item or something that would go before the School Board that would impact property taxes,” Emery said. “We want to leave their hands as free as possible to pursue those needs.”
Even if voters approve this measure, Emery said it will take some time and effort to get approval from the Legislature.
“We fully expect that will take time and that it’s not a certain victory,” Emery said. “It’s something that I would say got the ball rolling in order for the public to start considering what these taxes could mean for us and how they will be impacted.”
And the other vote of the night, on increasing short-term rental car taxes, was approved 4-0 at Wednesday’s meeting. Originally proposed as a 5 percent increase to the existing 9 percent state tax, the City Council amended the measure to be a 0.5 percent increase, citing bad math on the original proposal.
This measure came with more opposition, as management at the Burlington International Airport and South Burlington rental car facilities worried over how the increase could affect their customers.
“I don’t want to become unfriendly to the traveling public,” said airport Director of Operations Gene Richards. “People are cost-sensitive and I think we need to be aware that we’re lucky to have the people visiting our great state, and that we need to be conscious that every penny counts.”
The airport has $35 million in annual expenses that its customers pay out, according to Richards, who is concerned that travelers might not be able to afford coming to Burlington if costs continue to rise.
Emery, on the other hand, said she thinks that’s a small price to pay for better roads in South Burlington.
“If we think that on average, a rental car costs $30 a day, that would add up to 15 cents,” Emery said. That would allow for these users to give a few pennies per day for the city to maintain our roads. We have the most heavily traveled roads in the state in South Burlington, and every year, when we have our budget talks, the cost of paving is something we talk about. It’s important.”
The local option tax will come with a sunset clause, meaning if passed, it will only stay in effect for 10 years, unless specific action is taken to extend it. Emery said this clause was especially important to her in these “yes” votes.
“We know that it’s never easy to think that costs will go up, and that’s why the sunset clause for these very specific projects that will have a regional impact,” Emery said. “This grows from councilors’ sensitivity that taxes should be used sparingly, for specific purposes, and with the support of the public.”
An earlier version of this story referred incorrectly to the proposed duration of the tax proposals. While the local option tax would sunset after 10 years, the rental car tax would be an ongoing tax levy.
