A larger-than-usual number of Vermont municipalities are considering local option taxes for Town Meeting Day this year. Some of the reasons: rising costs amid climate and health care crises, a desire to reduce property taxes, plus an easier approval process.
On Tuesday, residents will vote on a 1% local option tax on rooms, meals, alcohol and sales to fund flood mitigation projects and fire department equipment.
At a public forum earlier this week, Municipal Manager Brendan McNamara said the taxes would raise about $700,000 annually for the town and village 鈥� with almost all of it projected to come from visitors to the area, versus community members.
And he said the funds could come in handy when, say, Ludlow is still waiting on $2 million from FEMA for flooding in 2023.
鈥淚nstead of taking a loan at a crazy interest rate from the bank, we [would] have these funds that can help restore our infrastructure during a crisis,鈥� McNamara said.
The town of Hartford 鈥� which includes the Upper Valley villages of Hartford, West Hartford, Quechee, White River Junction and Wilder 鈥� will also decide next week
鈥淪o that would be in addition to the 6% sales tax the state charges,鈥� said Hartford Selectboard Chair Michael Hoyt. 鈥淎nd the proceeds of any local option tax would be used exclusively to offset the town municipal property tax rates.鈥�
Hartford already has a 1% local option tax on rooms, meals and alcohol. But Hoyt said over the last two years especially, there have been a lot of budgetary increases outside of the municipality鈥檚 control.
鈥淧articularly town staff health care costs and general inflation,鈥� he said.
Hoyt said he鈥檚 heard some worry about whether additional sales tax might put business owners at a disadvantage compared to businesses right across the 黑料吃瓜网 River, in New Hampshire.
鈥淭hey have zero sales tax,鈥� he said. 鈥淪o there's always some concerns, you know, our business is going to get up and move to Lebanon or to somewhere else in New Hampshire.鈥�
But Hoyt added that the upside is savings for homeowners on property taxes. Using state tax data, the town estimated the additional local sales tax
鈥淪o if we had the local option sales tax in effect this year, 鈥� Hoyt said.
Finding ways to lower property taxes is at the forefront for many public officials, according to Samantha Sheehan, the municipal policy and advocacy specialist for the Vermont League of Cities and Towns.
鈥淭his is a really challenging budget year for many communities,鈥� she said. 鈥淢unicipalities are looking for more types of local revenues that are not coming from property taxes alone.鈥�
Sheehan said there鈥檚 a significantly larger number of municipalities considering local option taxes, compared to years past.
From warnings Vermont Public has reviewed, at least a dozen towns and cities have it on the ballot for this Town Meeting Day.
In addition to the prospect of lowering property taxes, Sheehan noted that made it easier for municipalities to adopt local option taxes. Now they don鈥檛 have to go through a charter change, and they don鈥檛 have to get that change approved by the governor and the Legislature.
鈥淎bout half of Vermont's municipalities are unchartered,鈥� she said, adding that this is the first year they have the authority to vote on local option taxes.
VLCT is also advocating in the Legislature this year 鈥� 80% instead of 70%.
The other percentage of the money goes to the state for a fund . And VCLT wants those extra dollars to go back to the communities that raised the money.
Sheehan pointed out that most of the services and infrastructure Vermonters interact with every day are paid for by cities and towns.
鈥淐lean drinking water, sewer, safe sidewalks that everyone can use, trail networks鈥� All of that is maintained by municipal government, 鈥� she said. 鈥淪o it makes sense that with the challenges many communities are up against in Vermont today, that they're looking at considering these taxes.鈥�
Sheehan said there are currently 34 towns and cities with local option taxes.
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