Three years ago, lawmakers and the governor asked us to spend two years studying Vermont’s tax system as a whole, and make recommendations for the system to be more sustainable, fairer and simpler. Lawmakers asked us to incorporate the demographic, climatic and technological changes Vermont is likely to experience over the next 20 years, and you asked us to pay particular attention to the Education Property Tax.
Last February, we delivered our final report and recommendations to lawmakers: 119 pages, plus 70 pages of appendices.
As the 2022 session approaches, we believe it is important and urgent that lawmakers act on our primary recommendation: base the Education Tax entirely on income, instead of basing it on the current complicated mix of property value and income. The recent outcry over property taxes in Burlington simply reinforces what we heard from Vermonters around the state: the Education Property Tax is the most burdensome tax in the state; it is the tax most likely to cause older Vermonters on fixed incomes to leave the state; it is impossibly complicated.
Lawmakers recognized that, while the three commissioners would get only a modest honorarium for our work, we would need full-time and part-time staff, as well as resources from the Vermont Legislative Joint Fiscal Office, the Vermont Department of Taxes and others, and lawmakers duly allocated over $500,000 to support this work.
We worked hard for a bit over two years, holding 36 public meetings and taking testimony from over 60 Vermonters, including tax experts and professionals, members of the administration, legislators, local officials and Vermonters who simply had an interest in this work.
We note that, 10 years ago, lawmakers commissioned the Blue Ribbon Tax Commission to undertake a similarly broad review, and that commission also identified the complexity of the Education Property Tax as a source of frustration, resentment, confusion and discord in our communities.
We are anxious that Vermonters get the benefit of the many hundreds of hours of work and the hundreds of thousands of their dollars that went into these two tax commissions. The only way Vermonters can benefit from all that is by lawmakers enacting the solutions we have recommended into law.
During the last session, lawmakers did a huge amount of critical work managing the health crisis and the economic crisis created by the pandemic, for which all Vermonters owe you a debt of gratitude. In the midst of all that, lawmakers found time to meet with us and discuss our recommendations, for which we are also grateful.
As we three commissioners talked through the relative importance of our recommendations, we agreed that, if the only one of our recommendations lawmakers acted on was to move the remaining part of the homestead Education Property Tax that’s not based on income, to an income base, all our work and all the taxpayer money we spent doing that work would have been worth it. Of course, we believe the other eight recommendations are worthy of your consideration as well, but the Education Tax is primary.
We look forward to joining you lawmakers in January to get the restructuring of the Education Tax done.
Bram Kleppner is a commissioner of the Vermont Tax Structure Commission.