State would seize town's surplus
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By Peter Hirschfeld Vermont Press Bureau - Published: January 22, 2009
MONTPELIER — The unorganized town of Glastenbury has amassed an impressive property-tax surplus, despite its sparse population.
The $254,000 reserve, funded by six full-time residents and a handful of seasonal dwellers, has accrued at a rate of about $20,000 annually over the past decade or so.
Now the state of Vermont would like to take it.
A quirk of statute lends government the authority to seize budget surpluses in unor-ganized towns or gores. Secretary of Transportation David Dill calls it a "distasteful" yet necessary measure to help mend the fiscal year 2009 budget. Rickey Harrington, Glastenbury's appointed supervisor, calls it highway robbery.
"The only difference between the state of Vermont and Jesse James is Jesse James had a gun," Harrington says. "That money was raised by the property owners of Glastenbury and the state is stealing it. There's no other word for it: This is stealing, plain and simple."
The residents of Glastenbury, situated on the northern edge of Bennington County, and Somerset, an unorganized town in Windham County, find themselves in an unenviable position as Vermont seeks to plug gaping holes in its 2009 budget.
Harrington says residents would prefer to use those surpluses to offset future tax rates. They may well be forced to bail out the state transportation budget instead.
"When you talk about how to budget with the negative numbers we're seeing, you do end up making decisions that adversely affect certain communities or groups," says John Zicconi, communications director for the Agency of Transportation. "There's no good or popular way to deal with budget deficits of the size we have."
Dill introduced the proposal to lawmakers this week as part of a $10.4 million rescission plan necessitated by a string of revenue downgrades in the budget.
Somerset and Glastenbury are sitting on about $382,000 worth of surplus; Dill wants to use 95 percent of the cash to relieve pressure on other areas of his budget.
"This is part of an effort to avoid additional cuts in town highway aid, Amtrak, and other places where we still have state dollars available," Zicconi says. "This is not a place we would go if we didn't have the statutory authority to do so or if we weren't in the financial situation we're in."
That rationale does little to appease Harrington, who occupies one of the three homes in Glastenbury. The only reason the unorganized town even has a surplus, he says, is because the state of Vermont has authority to set its municipal property tax rate.
Glastenbury and Somerset are the only two unorganized towns in Vermont that are subject to a state-set municipal tax rate. The rate, 50 cents per $100 of assessed property value, is intended to cover road maintenance costs and tuition for its school-age children (of whom there are now two in Glastenbury).
"They've been overcharging us for years, and now they turn around and say they're going to take our money because we've got a surplus," Harrington says. "It's absolutely unfair and it ought to be illegal. This is our money."
Zicconi and Dill say that in the past, Vermont has performed road maintenance even when Glastenbury had insufficient funds to pay for it.
"It's a situation where sometimes we've done work for them when they didn't have the money to pay for it," Zicconi says. "In the end, we think, it all kind of balances out."
Harrington says that's a bogus claim.
"We've been told that the state has been doing a lot of things for Glastenbury that we haven't paid for, and that couldn't be further from the truth," Harrington says.
Glastenbury lays claim to all of 1.3 miles of dirt road. The unorganized town measures 7 square miles, and almost 90 percent of the land there is federally owned.
"Glastonbury hires the state to grade roads, dig ditches and whatever else it is we need done," Harrington says. "But anytime they do anything, they submit a bill and we pay it, gladly."
Rep. Alice Miller, whose district includes Glastenbury, says she's looking into the legality of Dill's proposal. The statute indicates that the seized surplus money can only be used for road work in "adjoining" towns.
Zicconi says that's true. The state, he says, will use Glastenbury and Somerset monies on adjoining towns, in order to satisfy the statute, and then shift maintenance money that was to be used in those areas to fill budget holes elsewhere.
"We're being totally up front and transparent with this," Zicconi says. "We're not trying to pull one over on anybody."
Miller says she'll also pursue legislation that would lower Glastenbury's municipal tax rate, which she says is clearly too high. Harrington says he's hired a lawyer to advocate on Glastenbury's behalf, and is confident the state's proposal won't pass legal muster.
Bill Johnson, with the property valuation and review division of the Vermont Department of Taxes, confirmed Wednesday that Glastenbury and Somerset are the lone unorganized towns whose municipal rates are set by the state. He says the 50-cent rate, at the time it was assessed, likely raised a pot of money on par with local expenses.
"But that was back in a time period when towns had grand lists at very low levels of appraisal, so 50 cents didn't necessarily raise a huge amount of money," Johnson says.
Now, the rate apparently raises close to double what Glastenbury actually needs to pay for roads and schools. The unorganized towns additionally are assessed the statewide school tax rate.
One Glastenbury home, a multimillion-dollar mansion, accounts for close to three-quarters of all property tax revenue raised there. The home is owned by Robert Scott, the former president and chief operating officer of Morgan Stanley.
Contact Peter Hirschfeld at peter.hirschfeld@rutlandherald.com.
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