by Hugh Kemper As, barring a significant course correction, property taxes are likely to
increase significantly yet again over the next three years, it is useful to revisit the property tax itself. More specifically, revisiting (1) who pays property taxes and (2) income sensitivity and current use policies that continue to narrow the tax base thereby placing more of the property tax burden on fewer Vermonters. In practice, these policies desensitize the pocketbooks of a large majority of Vermont homeowners (and voters on school budgets) from the full impact of public K-12 spending and, thus, have undoubtedly encouraged the profligate education spending that has occurred since enactment of Act 60. Common sense suggests that desensitized voters on school budgets won’t be as fiscally responsible when spending others’ money as they would be when spending their own money.
Vermonters Pay 84% of Education Property Taxes
Implemented in FY 2005, Act 68 split Vermont’s education grand list into two components, homestead and non-homestead. Homestead property is defined as the principal domicile and contiguous property owned and occupied by a resident individual. Non-Homestead property is all other real property.
From an individual town’s property tax perspective, non-homestead property is non-resident property and, as non-resident owned property generates approximately 60% of statewide education property taxes, many Vermonters believe or assume that out-of-staters pay the lion’s share of property taxes. The truth is quite the opposite (view chart here) – Vermonters’ pay 84% of statewide property taxes as Vermonters own 73% of the grand list value of non-resident properties. (Note 1)
While Vermonters pay 84% of statewide education property taxes,
an increasingly disproportionate share of this tax burden is falling on
fewer Vermonters as income sensitivity and current use policies
continue to narrow the tax base.
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