MONTPELIER, Vt. (WCAX) – With days left in the legislative session, state lawmakers are wrapping up their efforts to find property tax relief to offset expected double-digit increases.
Senate President Phil Baruth Tuesday called it a “dark legislative session,” saying the property tax issue has lingered over everything. He says raising taxes to address the full $200 million in new local school spending isn’t possible, so the Senate is poised to approve a plan to tax Vermont businesses through software storage and add a three percent tax on short-term rentals. The Senate plan would also set aside $25 million in excess tax revenues, meaning homestead property taxes and non-homestead taxes covering renters are slated to increase 12.5%.
“Is it bold, is it groundbreaking — I would say we’re going lower than we ever have on the excess spending penalty than we ever have. But there’s a lot more to do and I think at this point that’s the process of the coming year,” Baruth said.
The bill also includes measures for cost containment — a penalty on school districts that pass budgets over a certain threshold. It also funds an 18-month study on what the future of the state’s education system should look like and how to pay for it.
The House also passed a $120 million package of taxes — including on wealthy Vermonters — to help fund health care, housing, and positions in the criminal justice system. But Baruth says that tax package is not moving forward over cost concerns.
Meanwhile, Baruth says a plan from Governor Scott to loan school districts from state reserves to buy down the rate is off the table.