Dan
Knutson sold the house he's owned in Milton for 28 years in August and
moved with his wife and daughter to a condo less than a mile away. A big
part of the reason: Property taxes.
"It was driven by property
taxes and the cost-of-living. I had to sell," said Knutson, a
67-year-old retiree whose bum arm put him on disability.
He said
he watched his taxes increase from under $1,000 when he bought the house
to more than $4,000. Now he struggles to pay the $1,500 a month rent on
his condo. He is eyeing a move next year to South Carolina.
Knutson is part of an ever-more vocal chorus of Vermonters reeling from rising property taxes and looking for relief.
Whether
relief is on the way is no sure thing, but here's an interesting
development: It appears in this election season that a pile of
politicians are starting to pay attention.
EARLIER: Milne lays out education plan
EARLIER: Governor candidates debate
EARLIER:
Shumlin's liabilities grow
Town
leaders from Milton to South Burlington to Killington are so frustrated
by smothering property taxes that a growing number of them are calling
for a two-year cap on property tax rates in hopes of forcing a change to
the state's complicated system. Scott Milne, the Republican candidate
for governor, embraced the idea. Democratic incumbent Gov. Peter Shumlin
denounced it. But even those who are wary say the call for a cap could
draw attention to the issue.
Around the state,
legislators, school boards and state officials are holding meetings
where they are hauling out charts to show that reliance on property
taxes keeps rising while school enrollment keeps shrinking. Once
divergent groups are conceding in new ways that this issue — among all
the challenges that face the state — is top dog.
A recent
Castleton Polling Institute poll indicated 59 percent of Vermonters
think the education funding system needs to be changed, a response
consistent across political lines, age and region of respondents.
Politicians
on the campaign trail are hearing a resounding cry from constituents
asking them to do something to simplify and repair a property tax system
that few understand and an education system that grows more expensive
while teaching fewer students.
"Every legislator is hearing from
the public. It's not health care, it's not GMO's, not Lake Champlain.
It's property taxes," said Steve Jeffrey, executive director of the
Vermont League of Cities and Towns.
"I do think it's louder this
time than in the past," said House Speaker Shap Smith, D-Morristown, who
is running for re-election in his Lamoille County district and pledged
the issue will be a priority in the 2015 legislative session. He
conceded the solution is hardly a slam-dunk as there are flaws with just
about every proposal.
A group of Democratic legislators held a
news conference three weeks before the November election to say they
feel their constituents' pain and pledged to make changes.
"I'm
glad they're starting to hear it," said Republican House Leader Don
Turner of Milton, who accused the Democratic majority of being late to
the game. "I'm disappointed they've been the super-majority the last six
years and nothing's changed."
"I wouldn't say we're late to the
party," responded Smith, the House speaker, who argued that instead
there has been disagreement within the Statehouse about how to solve a
complicated issue. "I think the problem was there was not consensus
within the building about what the problem is," Smith said.
Late
or not, town and city leaders say they're heartened to see the growing
number of conversations going on about possible solutions, whether on
the campaign trail or in conference rooms.
"It really seems to
have picked up in the last couple months," said Brian Palaia, Milton
town manager, who joined other town and school officials at an August
summit in South Burlington on the topic.
Property tax cap: tourniquet or bad idea?
The
Milton Selectboard is among those that have passed a resolution calling
for a cap on the property tax rate after seeing school budgets fail two
years in a row and the margin of victory for the town budget grow
narrower, Palaia said.
The Milton board went a step further and
passed a second resolution with more detail. They wanted a new system
for financing education within two years, even if it means considering
the ever-controversial mandatory consolidation of schools, a statewide
teachers' contract and changes to the system to make those eligible to
pay their taxes based on their income to have a greater stake in the
process.
Some players, including Gov. Shumlin, have greeted the idea of a cap on the property tax rate with immediate criticism.
"It's just a bad idea," said Burlington Mayor Miro Weinberger. "It would do nothing but shift the burden onto other taxes."
Capping
the rate would leave an estimated $42 million hole in school spending
next year, according to the Legislature's Joint Fiscal Office.
Milne,
who is challenging Shumlin in next month's election, has argued that
the Legislature should come up with other ways to cover the gap for two
years while creating a more workable way to fund education.
"I've
got a cap that's a tactic to force the Legislature to act," Milne said.
"It's their job to come up with a way to figure it out."
Smith,
the House speaker, isn't buying it. "Scott Milne decides he's going to
take the cupcake and give the spinach to the Legislature. I think if you
want to do something you ought to put how you're going to do it on the
table," Smith said.
The South Burlington City Council also passed a
resolution calling for a cap on the property tax rate. The council
never intended for the cap to be the solution, said City Manager Kevin
Dorn. "This is a tourniquet to stop the bleeding and give the
Legislature time to come up with a solution," he said.
Rising
property taxes to pay for education have forced South Burlington into
tough decisions about the city budget, Dorn said. Last year, the city
used its reserve accounts just to keep the city budget to a 1 percent
increase and hire one new police officer, he said. "That significantly
depleted our reserves. We couldn't do that for another year," Dorn said.
In
Killington, Town Manager Seth Webb said, "The town has found it
increasingly difficult to raise funds for critical projects ranging from
annual maintenance to rebuilding aging infrastructure."
A
Killington town study shows that one resident's property taxes increased
more than 490 percent from 1997-2012 and Killington Ski Resort taxes
increased from $226,000 in 1996 to $780,000 in 2012, Webb said.
Jeffrey,
at the Vermont League of Cities and Towns, wants a new way to fund
education, but is wary of the cap because of the unanswered questions
about what might happen in the interim.
But he and others note
that Shumlin and the Legislature have contributed to the increase in
dependence on the property tax in recent years by adding costs to the
property tax, including early childhood education, dual enrollment that
helps high school students take college classes and school for prison
inmates.
"We're paying for more stuff out of the education fund," Jeffrey said.
"The
property tax could be funding 75 percent of all education costs in five
years," Steve Dale, executive director of the Vermont School Boards
Association, told a gathering of Vermont town officials recently.
Shumlin
responds to complaints about rising property taxes by reminding people
that taxes increase because local residents approve their school and
town budgets. The argument disregards new expenses paid for out of the
property tax.
Milne lays the lack of a solution for property taxes
at Shumlin's feet, for failing to find solutions during four years as
governor and four as Senate leader. "Education is not something Gov.
Shumlin mentions often as a broad-based tax," Milne said. "The property
tax is a broad-based tax."
In 2005, 61 percent of the education
fund was paid by property taxes, according to the Joint Fiscal Office.
Ten years later, 68 percent of the education fund comes from the
property tax.
Education spending?
As Vermont's eight mayors
gathered recently for a news conference in Burlington to endorse Shumlin
for re-election, they conceded they were doing so even though their
communities are reeling from property taxes. Weinberger, the Burlington
mayor, said the group spoke with Shumlin about solutions.
"He's told us he's open to change in the upcoming session," Weinberger said. He added, "We don't have the answer today."
Nobody seems to have the full answer yet, though people on all sides of the issue contend a solution can be found next year.
Shumlin
said his focus is on education spending. "I'm willing to consider any
idea that helps us to get our spending under control," he said.
Toward
that end, he has directed Rebecca Holcombe, the state education
secretary, to work with school boards and others around the state,
laying out statistics about Vermont's relatively high per-pupil costs
and student-teacher ratios and what programs sample schools are getting
for them. Holcombe said those stats show that two schools can spend the
same amount per-pupil but one has an extensive array of math and science
offerings and the other has few.
Ultimately, what Holcombe is
doing is selling local communities on the hard-sell idea of
consolidating school operations with their neighbors. Legislators
broached that territory this year, causing a lot of consternation among
communities fearful of losing their schools. Holcombe said the idea is
to help local school leaders better understand the realities that
shrinking schools face, offer them increased incentives and allow them
to make their own decisions.
Both Shumlin and Milne say they
support voluntary consolidation with incentives, but both are relying on
communities that havce refused consolidation in the past to reconsider.
"I
don't think we can look at reduced costs without consolidation,"
Holcombe said. She added that local boards are more amenable to that
discussion than they were earlier this year because they realize some
schools are falling short. "We're asking, 'Are you offering your kids
less than you did 10 years ago and are you spending more?'" she said.
Milne
said good conversations about working together are going on in
communities around the state, including his own town of Pomfret, which
is having the difficult discussion of working with neighboring towns.
Milne laid out education plans last week that calls for voluntary consolidation with incentives, but varies from Shumlin's.
Milne
highlighted a 17 percent increase in staffing among Vermont schools
from 1997 to 2012 while there was a 16 percent decrease in students. He
proposed forming 15 regional districts to replace the state's 46
supervisory unions and 12 supervisory districts. He would phase out
small school grants that have helped the state's tiniest districts
survive.
Milne would replace the statewide property tax with
regional taxes for each regional district. Each region would then have
the option of using savings to expand pre-kindergarten and pay for
in-state public college for Vermont students. In the meantime, he called
for enacting the two-year cap on the property tax rate within two weeks
of taking office in January, then working with the Legislature on a new
education funding plan.
Nobody seems to be promising how much
money consolidating school districts would save. This year, proposed
consolidation talks faltered over that question, but increasingly that's
where the conversation is headed.
"Somewhere in the state of Vermont, there are savings to be had," said Dale, the head of the Vermont School Boards Association.
Contact Terri Hallenbeck at 999-9994 or thallenbeck@freepressmedia.com
Thanks to Seth Webb, Killington Town Manager for forwarding this story to me so I can share it with you.
Vito
Comment: Notice how nobody seems to be talking about cutting school spending even though that would be the most direct way to affect property taxes. Note: "17 percent increase in staffing among Vermont schools
from 1997 to 2012 while there was a 16 percent decrease in students,". You would think simple logic would dictate cuts!
Vito