Post by Dr.Ken Sokolowski on Nov 15, 2006 11:27:37 GMT -5
courant.com
www.courant.com/news/nationworld/hc-vermont1114.artnov14,0,7774978.story
Property Taxes Choking Vermont
Homeowners Forced To Sell Because Of Spike In Charges, Residents Say
By ROSS SNEYD
Associated Press
November 14 2006
NEWARK, Vt. -- Ben Bangs pulls a scrap of paper from his pocket on which he has neatly listed in pencil how much he has paid in property taxes in each of the past several years.
Like everything else, the amount has gone up steadily each year, but it spiked 38 percent in the past year, driven by soaring property values even in his little town of 450.
"People are being forced to sell," Bangs said. "They can't afford to live comfortably and pay their taxes, too. They don't want to sell it. We've struggled to hold on to it."
Bangs, his neighbors and homeowners in dozens of other Vermont towns have reached a breaking point, demanding the repeal of a statewide property tax enacted nearly a decade ago.
The state adopted the tax in 1997 under pressure from the Vermont Supreme Court to eliminate unfairness in the way schools are funded. But homeowners complain that the law has led to another kind of unfairness: Their tax bills keep going up and up.
Property values have been soaring in Vermont recently because of a red-hot housing market - the result of low mortgage rates, the strong stock market and an influx of people from New York and Boston buying second homes in the country.
Bangs and his wife own a three-bedroom chalet-style house that used to be a schoolhouse. They paid $1,928 in taxes in 2002; this year, the bill was $3,135.
Fifteen states have a statewide property tax, according to the National Conference of State Legislatures. But in 2005, no state relied as heavily on its state property tax as Vermont.
Vermont's property tax generated more than 33 percent of the overall state tax revenue, the Federation of Tax Administrators said. New Hampshire was next on the list at about 19 percent.
Before Act 60, as the statewide property tax adopted by the Legislature is known, schools were funded primarily through local property taxes. Cities and towns set their own rates and spent it as they saw fit. But the high court found that system unconstitutional, because property-rich districts were spending more on education than poorer districts.
"I think the current system is providing equity for students," said John Friedin, a former lawmaker who was a principal co-author of the law. "But the equity for taxpayers is a little discombobulated."
Republican state Rep. Richard Westman, an organizer of the Revolt and Repeal movement, said: "We're right back in the same place we were before Act 60 passed."
Revolt and Repeal recruited nearly 70 candidates to run in last week's legislative elections. But nearly all of them were Republicans, and they didn't fare well on Election Day. Both houses of the Legislature are overwhelmingly Democratic.
Vermont's property tax system is actually a hybrid - the rate varies according to each town's school budget and each homeowner's income.
Republican Gov. Jim Douglas says property taxes need to come down, but he is not endorsing wholesale repeal. Instead, he has proposed a cap on local school spending.
Copyright 2006 Associated Press
www.courant.com/news/nationworld/hc-vermont1114.artnov14,0,7774978.story
Property Taxes Choking Vermont
Homeowners Forced To Sell Because Of Spike In Charges, Residents Say
By ROSS SNEYD
Associated Press
November 14 2006
NEWARK, Vt. -- Ben Bangs pulls a scrap of paper from his pocket on which he has neatly listed in pencil how much he has paid in property taxes in each of the past several years.
Like everything else, the amount has gone up steadily each year, but it spiked 38 percent in the past year, driven by soaring property values even in his little town of 450.
"People are being forced to sell," Bangs said. "They can't afford to live comfortably and pay their taxes, too. They don't want to sell it. We've struggled to hold on to it."
Bangs, his neighbors and homeowners in dozens of other Vermont towns have reached a breaking point, demanding the repeal of a statewide property tax enacted nearly a decade ago.
The state adopted the tax in 1997 under pressure from the Vermont Supreme Court to eliminate unfairness in the way schools are funded. But homeowners complain that the law has led to another kind of unfairness: Their tax bills keep going up and up.
Property values have been soaring in Vermont recently because of a red-hot housing market - the result of low mortgage rates, the strong stock market and an influx of people from New York and Boston buying second homes in the country.
Bangs and his wife own a three-bedroom chalet-style house that used to be a schoolhouse. They paid $1,928 in taxes in 2002; this year, the bill was $3,135.
Fifteen states have a statewide property tax, according to the National Conference of State Legislatures. But in 2005, no state relied as heavily on its state property tax as Vermont.
Vermont's property tax generated more than 33 percent of the overall state tax revenue, the Federation of Tax Administrators said. New Hampshire was next on the list at about 19 percent.
Before Act 60, as the statewide property tax adopted by the Legislature is known, schools were funded primarily through local property taxes. Cities and towns set their own rates and spent it as they saw fit. But the high court found that system unconstitutional, because property-rich districts were spending more on education than poorer districts.
"I think the current system is providing equity for students," said John Friedin, a former lawmaker who was a principal co-author of the law. "But the equity for taxpayers is a little discombobulated."
Republican state Rep. Richard Westman, an organizer of the Revolt and Repeal movement, said: "We're right back in the same place we were before Act 60 passed."
Revolt and Repeal recruited nearly 70 candidates to run in last week's legislative elections. But nearly all of them were Republicans, and they didn't fare well on Election Day. Both houses of the Legislature are overwhelmingly Democratic.
Vermont's property tax system is actually a hybrid - the rate varies according to each town's school budget and each homeowner's income.
Republican Gov. Jim Douglas says property taxes need to come down, but he is not endorsing wholesale repeal. Instead, he has proposed a cap on local school spending.
Copyright 2006 Associated Press
