Full Property Taxes

If the State of Vermont paid “full” property taxes for all of its tax exempt buildings and properties, wouldn’t we be just fine?

Act 60 has changed the way we look at property taxes for education. With the shared, state wide education grand list the effect of the state’s property tax exemption is spread over the entire funding pool - not just any 1 community. The state has, essentially, met its education portion of taxes through the Act 60 and Act 68 formula. In addition, $941,776 in income sensitivity payments were made to local residents to reduce their school property taxes. Over $420,000 in reduced Machinery and Equipment taxes is realized by local businesses. On top of that, the State provides a “circuit rider” program which reduces overall property taxes for people with lower incomes. In 2005, this program brought $601,503 in tax relief to Montpelier.

At the same time, the State’s total Payment in Lieu of Taxes (PILOT) has grown to $577,600 or about $0.11 on the tax rate. This is approximately 60% of their estimated “full” taxes for municipal services. If the State paid “full” municipal taxes, then, the tax rate would be another 8-10 cents lower, a savings of $108-$136 on the average residential tax bill.

City officials are continuing to fight hard for full payment of municipal taxes by the state. Residents, though, should be aware that much of this benefit is already in place and full PILOT will not create major tax reduction in the form of hundreds upon hundreds of dollars!

The presence 2,255 state jobs in Montpelier certainly creates the service demands discussed earlier but also provides economic benefits to the community. Most importantly, the state has come a long way toward assisting Montpelier - and particularly our most needy residents - with our tax burden. Its not valid to say “Its the state’s fault”. How does one explain the high local taxes in Barre, Rutland and the others with much less of a state presence?