On September 22, 2021

Revising the education property tax

Editor’s note: This is an open letter to the Vermont Legislature written by Commissioner Bram Kleppner, CEO of Danforth Pewter, on behalf of the Vermont Tax Structure Commission.

Dear Legislators,

Three years ago, you and the Governor asked us to spend two years studying Vermont’s tax system as a whole, and to make recommendations that would make the system more sustainable, fairer and simpler. You asked us to incorporate the demographic, climatic and technological changes that 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 you — 119 pages, plus 70 pages of appendices.

As the 2022 session approaches, we believe it is important and urgent that you 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.

You 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 the resources of the Vermont Legislative Joint Fiscal Office, the Vermont Dept. of Taxes, and others, and you 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, you 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 your enacting the solutions we have recommended into law.

During the last session, you 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, you 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 you 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 in January to get the restructuring of the Education Tax done.

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