The Village of Essex Junction has yet to split off from the town of Essex, but leaders in both communities are already budgeting for some of the impacts of separation.
In November, Essex Junction voters overwhelmingly elected to create their own city that is separate from the town, turning the page on a decades-long debate over how to even out what some say is an unfair tax burden on village residents.
Still, the future city’s charter to separate and become independent needs approval from the Legislature and Gov. Phil Scott. The bill detailing the charter, H.491, was read in the House Committee on Government Operations last week.
Essex Junction is governed by a board of trustees, which develops its own budget.
The proposed village budget for fiscal year 2023 is about 13% higher than for the current fiscal year, and the average homeowner would pay some 12% more in property taxes, said Andrew Brown, president of the village board of trustees.
That increase is driven largely by the village’s plans to hire three new staff members for positions that have existed within the shared Essex town government, he said: a village manager, finance director and human resources director.
The village has budgeted about $180,000 for a full-time manager position. Overall, the budget proposes a roughly $740,000 increase in expenditures.
Both communities have had a unified manager for almost a decade, said Andrew Watts, the Essex Selectboard chair. But that’s set to change: Officials from both governments agreed to eliminate the position starting Feb. 25, Watts said, and town officials have hired the current deputy town manager, Greg Duggan, as town manager.
Brown said having dedicated managers for the village and the town will allow each to look out for the specific interests of their communities. It made more sense to have a unified manager when the two governments were considering a merger, he said.
In decades past and as recently as April, attempts to merge the communities fell short — largely with village residents voting to merge, and town residents voting to remain as is. The most recent failed merger prompted the village to begin working toward secession.
One driving factor behind the separation vote was that village property owners pay taxes to both the village and town governments, supporting services in both.
Still, Watts noted that, even if the Legislature approves the village’s charter this year, its property owners will continue to pay taxes to both governments for another year.
In the 2024 fiscal year, Brown said, village residents would see their property taxes decrease by 7.25% — a figure that village officials have published before.
“That’s when village residents would see an overall tax decrease because we are no longer paying for a duplication of services,” he said.
Brown said village officials also have discussed using 10% of their American Rescue Plan Act funding to offset the costs of hiring new staff. He said that, with that money, the tax burden on residents could decrease from about 12% to less than 2%.
Personnel changes ahead of the separation have also affected the town of Essex’s budget proposal for fiscal year 2023, Watts said, since the town will no longer be able to share costs with the village for its manager or its finance director positions.
Overall, he said, town officials are eyeing a 4% tax increase for the upcoming fiscal year, which is higher than the roughly 3% increase they would have liked.
Currently, 42% of Essex property taxes come from the village, meaning separation would be a substantial financial hit to the town.
About 11,000 people live in Essex Junction, according to the U.S. Census, while roughly 22,000 live in the town of Essex as a whole.
So far the town has not discussed reducing or eliminating any services, Watts said.
