In just a few weeks, Essex Junction residents will decide whether to separate from the town of Essex and create their own city — a decision that could drastically alter property tax bills, the ability to provide municipal services in Essex and the relationship between the two communities.
The question will be on the Nov. 2 ballot, the Essex Junction Board of Trustees decided Tuesday night in a unanimous vote.
“At this point I believe we now officially will be having a vote on Nov. 2,” said board president Andrew Brown, with a tone of excited disbelief about arriving at this milestone. “Trustees, staff thank you all for getting us to this point in time. It truly is appreciated and has been a significant lift, so thank you.”
Essex Junction is a village within the town of Essex. A bit over 22,000 people live in Essex, with about half of them residing within village limits.
Now, village property owners pay property taxes to both the village and town governments. Residents outside the village pay taxes only to the town government. That means village property owners pay a higher rate of local property taxes than residents outside village limits.
Under separation, village residents would no longer have to pay town property taxes in addition to their own village taxes.
The complicated relationship between Essex Junction and Essex Town has been an issue for years. Residents voted several times on merging the two governments but decided against the merger every time.
After the last failed merger vote, which took place in April, village residents asked their board of trustees to look into separation, a process that led to Tuesday night’s warning.
Separation could shift property tax burdens and the ability to finance services in the community. If the village separates from the town, the town would lose around 42% of its annual property tax revenues. Consequently, property taxes for outside-the-village residents would have to increase to maintain municipal projects and services, while village property owners would see a similar tax decrease, according to a financial analysis done by the joint village-town finance office.
However, the November vote would not be the final word. The new Essex Junction city charter would need approval from the state government — the House, Senate and the governor. Multiple committee reviews would be involved.
A few other Vermont communities once had both town and village governments but dissolved their village structures in favor of a single town government. What’s unusual to Essex is that the village would create a new city government.
Rep. Lori Houghton, D-Essex, would be among the state legislators who would work to shepherd the new charter through state approval. Houghton said she hopes for a charter outlining a process in which both the village and town could slowly adjust to operating as two totally separate entities, a transition that would not be too much of a shock to the system.
The town selectboard and village trustees have been working on a separation charter for months and, “quite frankly, I think they’ve done it,” Houghton said of the town-and-village separation charter. “They’re continuing to work on the transition plan and they’ve allocated a lot of time at each meeting and kept up public engagement. Getting public engagement is a main priority and they’ve done a good job with that.”
One sticky element will be separating government operations that have been merged over the years. For instance, the village and town governments share a finance department, an IT department and a public works manager. It’s possible that the town and village could continue to share certain services over the next few years and move gradually to full separation.
“Our focus is trying to avoid a steep ramp-up of the tax rate,” said Andy Watts, chair of the Essex Selectboard. “The challenge is to make sure we don’t end up as feuding neighbors.”
Despite his concerns, Watts said separation seems to be the best path forward for both communities. “This has been going on for what, 60 years,” he mused. “Merger, separate, merger, separate. Separation is starting to feel more like it’s the right thing to do.”
