MONTPELIER — Those who own property in the Capital City will soon be paying more for that privilege based on a pair of freshly set tax rates.
The rate increases —12.92 cents for homesteads and 14.56 cents for non-homesteads — will be reflected in tax bills that will be printed and mailed by the end of the week.
The City Council did its part during a brief special meeting at noon Tuesday. Councilors approved the municipal portion of the tax rate during the remote session, keeping the city on track to stick with its traditional schedule of quarterly installments.
Typically, the first installment is due Aug. 15 in Montpelier, but because that falls on a Saturday this year, taxes paid by Monday, Aug. 17 will be considered timely.
Many central Vermont communities — including Barre and Barre Town — aren’t expected to set tax rates until early next month, pushing the due dates for the first installment into September.
That wasn’t necessary in Montpelier, though councilors were told a larger than usual wave of amended tax bills will likely need to be sent to some who took advantage of income tax deadlines being extended from April 15 to July 15 as consequence of the COVID-19 pandemic this year. Homestead declarations and property tax credit claims for some properties won’t be available until Aug. 1 and in many cases that information will require issuing an amended bill.
Those who didn’t take advantage of the pandemic-related extension and filed their homestead declarations by April 15 can trust the tax bills they will receive in coming days.
Part of those bills will be the same for everyone from Capital City homeowners to commercial buildings in downtown Montpelier. That’s the part the council set Tuesday at the recommendation of Finance Director Kelly Murphy.
The tax rate required to finance the day-to-day operation of a full-service city, including its annual contribution to the Kellogg-Hubbard Library will increase 4.9 cents — from $1.129- to $1.178-per-$100-assessed property value. That increase is slightly less than city officials projected earlier this year and will mean paying an extra $50 in taxes for every $100,000 assessed property value.
Municipal taxes for a home assessed at $250,000 will increase by roughly $125, while the comparable increase for $500,000 commercial property will be roughly $250.
Also, property owners will pay a water and sewer benefit charge and a sewer separation charge, though neither of those rates — 2 cents and 7 cents respectively have changed and don’t contribute to this year’s tax increase.
When you add them to the mix the total municipal tax rate jumps to $1.268, but the increase is still 4.9 cents, or roughly 4.4%.
Then there are the property tax rates required to finance the Montpelier Roxbury Public School system.
Those rates — one for homesteads and the other for nonhomesteads — are set by the state and inflated to compensate for the city’s common level of appraisal (CLA) that has Montpelier property currently assessed at 86.86% of fair market value.
A reappraisal that is slated to start next year and be finished by the time the tax rate is set in 2023 will fix that, but until then the education tax rates will be set higher than they otherwise would be to make up for the fact property in Montpelier is assessed at less than what it is actually worth.
The CLA is at least partly to blame for an increase of just over 8 cents in the new homestead rate and nearly 10 cents in the non-homestead rate. The homestead rate has increased from $1.6455- to $1.7257-per-$100 assessed property value, while the non=homestead rate has jumped from $1.7776- to $1.8743-per-$100-assessed property value.
For homeowners who don’t qualify for the income sensitivity provisions of the state’s education financing law, the new homestead rate will mean paying an extra $80 in taxes for every $100,000 of assessed value. That is in addition to the municipal increase. Those who are income sensitive will see some relief, and if they filed on time, it will be reflected on the bills they will should receive next week.
The total homestead tax rate — municipal and education combined — is now just less than $3 to $2.9937. That’s up more than 12.9 cents from last year’s homestead rate of $2.8645.
The non-homestead education rate of $1.8743 reflects a slightly higher increase — about 9.67 cents — that will add roughly $100 in taxes for every $100,000 in assessed property value. That doesn’t include the municipal increase.
The combined non-homestead rate in Montpelier is up 14.56 cents — from $2.9966 to $3.1423-per-$100-assessed property value.