MONTPELIER — Members of the tax-writing committee in the Vermont House expressed frustration Friday with the administration of Gov. Peter Shumlin over school property taxes.
Shumlin this week vowed to reduce what earlier had been projected as a 7-cent increase in the statewide residential school property tax rate. But Tax Commissioner Mary Peterson did not provide definitive answers on the governor’s ideas when facing questions Friday from the House Ways and Means Committee.
There has been widespread consternation in the Legislature and among the public about school taxes increasing sharply at a time of decreasing student enrollments. Vermont has a complex school funding system in which a statewide property tax supports a basic level of school spending, with many local school districts adding their own levies to pay for higher spending.
“There are a bunch of levers,” Peterson said, referring to the tax formula.
She said the administration was concerned about a proposed jump in the tax rate on commercial and vacation properties. A committee proposal would raise it 8 cents per $100 of value, to $1.52.
The residential rate, which Vermont homeowners pay on a house and up to two acres, would climb 5 cents under the committee’s plan, to 99 cents per $100 of value. That’s down 2 cents from earlier estimates.
Peterson declined to be specific about what rate the administration might prefer or about other changes the governor might seek as the bill moves to the Senate.
“It’s a conversation and we know that this conversation goes generally to the end of the session,” Peterson said.
The Legislature is expected to adjourn in May.
The state Constitution calls for financial bills to start in the House, and the Ways and Means Committee usually plays a key role in setting tax policy.
“We’re sort of less satisfied with the idea that we’re one step in the process and it’s going to look very different at the end,” said the committee chairwoman, Rep. Janet Ancel, D-Calais. “We’d actually like to have your best thinking right this minute.”
Administration Secretary Jeb Spaulding later defended the administration’s current stance.
“While the House is considering something with a lot of pieces in it and before their deliberations and floor action, it really wouldn’t be wise for us to start picking the package apart,” he said.
The House Ways and Means Committee worked through a list of proposed adjustments to the existing school funding system Friday, and is expected to wrap up its work on a bill next week. Among the changes:
Income sensitivity. The state allows homeowners to adjust their property taxes — within limits — to account for income. That benefit tapers off for household incomes above $90,000, with no benefit above $102,000. Committee members said they likely would extend the upper amount to $120,000 to extend tax relief to more “middle-income” households.
The maximum tax savings from income sensitivity would be reduced from $8,000 to $6,000. Committee members said that would reduce the instances in which state aid goes to people who report low incomes but live in expensive homes.
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