Thirty-five Democratic and Progressive lawmakers have proposed that Vermont’s residential property owners pay education taxes based on their incomes — expanding a system in place for many state residents.
Rep. Chris Pearson (P-Burlington) said the bill would increase the fairness of the school tax by asking higher-income Vermonters to pay the same share of their pay as middle-income property owners. Vermonters with $100,000 in household income now pay about 3 percent of their wages in property taxes, compared to 0.5 percent for households with income of $1 million, he said.
“We believe we have a way to make our school funding more equitable and, at the same time, give most Vermonters a break on their property taxes,” said Sen. Anthony Pollina (D/P-Washington), sponsor of the Senate version of the bill.
Currently, the income-based system covers only taxpayers with household incomes of $90,000 or less and only for a house and two acres. Residential property owners with more than two acres pay an additional amount based on the property’s value.
The proposal would raise an additional $82 million, all of which would be used to provide residential property tax relief. Half of that would make it possible for property owners with incomes less than $90,000 and extra acreage to pay based only on their incomes. The remaining $41 million would be used to reduce the tax rate for all residential property owners.
Taxes on commercial and vacation properties would still be based on their value.
The new bills join more than two dozen other proposals to alter the property tax system for financing schools.
Rep. Janet Ancel (D-Calais), chair of the House Ways and Means Committee, which reviews tax bills, said the panel might consider the new proposal. She said she would want to see an analysis of who would pay more and who would pay less. “I don’t want to adopt a system that is less progressive than what we have now,” Ancel said.
Senate Finance chair Tim Ashe (D/P-Chittenden) said his committee already had a “walk-through” of Pollina’s version of the bill. He said it would be part of a broader discussion of property taxes that the Finance Committee will undertake this session.
Got something to say?
Send a letter to the editor and we'll publish your feedback in print!
Or how about we amend the state constitution to overturn Brigham and the Act 60 regime? Property taxes should solely go to fund localities, including local school districts, like every other place in the country. This system of taking people’s property tax money to Montpelier (as opposed to income tax, which is normal to go to the state) is insane! The property tax bills aren’t even transparent. You have no idea how much of your money actually goes to fund your school versus how much Montpelier uses for other things (like classes for prisoners in our jails who have broken criminal laws). Very strange system that makes no sense. You know it is messed up when even the chair of the House Education Committee (Dave Sharpe) admits he has no idea how it works.
The ultraleftist legislators have been flogging this proposal for years. Dean shot it down quickly when he was Governor, noting that it would take something like a 25% increase in everybody’s state income taxes to make up for the lost property tax revenue, and he was not about to go there. (Today it would probably be a higher percentage, given the much higher school budgets.) Superficially, this idea seems fair. But practically, it is not. Many people are property-wealthy but don’t earn an “income.” Under an income-tax-only system for funding schools, those property-wealthy people get off scot-free. NOT FAIR. Why should somebody with no income but a million dollar home, or huge tract of property, paid for by their grandfather’s trust fund, not pay into the system because it is based on income, not property wealth? In addition, when you jack up everybody’s income taxes, the few remaining Vermonters who actually can earn an income in this state get on the next plane to Florida, or drive across the Connecticut River. As usual, Vermont’s communistas haven’t thought this through. Or they don’t care.
I find it laughable to even suggest that the purported $82 million in extra revenue would be used to lower anyone’s tax rate and out-of-pocket responsibility, especially the middle class who pay proportionally more than anyone else. With $82 million in extra revenue possible, you won’t be able to count the number of special interest groups and State programs who’ll want to get their hooks into that loot.
The biggest problem with this proposal is that it punishes people who, while they may have a high income, have more modest properties in RELATION to their income. It punishes them for living within their means and rewards some (though not all) people who signed up for more house than they can afford. If someone making over $200,000 has a house worth $300,000 and a family of 4 who has an income of $70,000 but also obtained a $300,000 house on a sub-prime loan and are living OUTSIDE of their means…..why should the properties be taxed differently? Property taxes should be based on the assessment of property values, as in most states. Not on income. We already have progressive income taxes. Property taxes should be based on property alone.