Also known as a ‘consumption tax,’ would shift school funding burden away from property tax
By Guy Page
Faced with a property taxpayer revolt this year, the House Ways and Means Committee is in the mood to listen to alternatives to funding education with property taxes. Yesterday morning, April 10, it heard a Rutland County senator suggest Vermont abandoning the property tax as a school funding mechanism and replace it with a 1% tax on all transactions.
The plan was originally floated in 2017 by a Rutland-area grassroots group called Make Vermont Affordable, Sen. Terry Williams (R-Rutland) told the committee.
“Make Vermont Affordable believes that education funding should be changed from a property education tax basis to a 1% (or higher, as required) transaction tax. This would be on a state-wide basis and would have the advantage of everyone, including tourists, and on-line purchasers helping to foot the bill. That way, education funding would be equitably distributed to everybody who makes a purchase in Vermont, not just property owners.”
The philosophy behind the transaction tax appears to be “many hands make light work.”
At present, it’s the property taxpayers who are doing the heavy lifting. Vermont has the third highest property tax in the nation, as measured by percentage of personal income, Williams said. The owner-occupied housing rate is 71%, as of 2021. New housing starts haven’t kept pace with population growth, meaning the load falls heavier on owner-occupied housing every year.
This March, an unprecedented number of voters said enough’s enough and voted no on school budgets at Town Meeting, including in many districts (Montpelier-Roxbury, for example) where budget approval is a perennial given.
A Senate bill proposed by Williams, and now in draft form, “proposes to require the Department of Taxes to submit a written report to the General Assembly analyzing and proposing new revenue sources to replace the education property tax and to fund education in the State.” In particular, it asks the Dept. of Taxes to evaluate “creating a new, broad-based tax type.”
Williams suggested a key point of the Vermont Tax Structure Commission of 2018 – “Recommend expanding the sales tax to almost all consumer goods and services.”
Rep. Scott Beck (R-St. Johnsbury) asked for clarification. “Are you talking about eliminating all education property taxes, or just the homestead, or just the non-homestead, or get rid of all taxes?”
“Yes all income tax, too, all taxes, one consumption tax,” Williams said. “We couldn’t figure out what percentage we would have to charge for consumption tax. That would be a tax on all goods and services everybody that came into the state of Vermont, you know including people that were here illegally or people were here selling drugs. They came to Vermont, they had to buy goods and services while they were here.
“Think if we’d had that on Eclipse Day,” Committee Chair Rep. Emilie Kornheiser (D-Brattleboro) said.
One lawmaker asked a question about consumption tax regressivity (“all taxes are regressive,” Williams said), and then Kornheiser thanked Williams for his visit.
Ways & Means is preparing a proposal to provide ‘foundation’ funding of required educational services through non-property tax means, while allowing school districts to impose their own, local property taxes to fund services and programs above and beyond the ‘foundation.’
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I like this opinion. Anouther is to consider a toll road with the payment being right before/after the Canadian boarder. 89 is the main transit road used by motorists from all over America and Canada who travel between these countries. Discount the fee or negate it completely for Vermont residents.
We can’t do toll roads in Vermont because of the amount of federal tax dollars we get for the highway fund . That’s what I was told by the governor if we loose federal tax dollars for that we wouldn’t make enough in tolls to compensate from lost revenue
That would mean the property tax goes away, right? Or is this like the Lottery school funding that just replenishes the general fund for the State’s share of school funding (and does not go directly to schools). Another question, will towns and cities up their taxes just to fill the void. Taxpayers never win.
ahhh, you are starting to see the light…tax payers never win……
This sounds good, but your property tax will never go away, they know you are the captive audience and they will drain you dry, YOU ARE THE MONEY TREE for all the frivolous spending …………………………………………
So Vermont has a property tax rate of 9.5%, while states like Tennessee have 1.9%, so what’s different……………Oh, yeah we have progressive lunatics running the show !!
Re: “Think if we’d had that on Eclipse Day,” Committee Chair Rep. Emilie Kornheiser (D-Brattleboro) said.
“With weeks to go, could lawmakers radically reimagine Vermont’s education finance system? The [Vermont House Ways & Means] tax committee is looking at potentially wresting considerable power away from local voters… The current version of the bill would impose what’s known as a cloud tax… ‘We put a bunch of big ideas out into the world,’ Kornheiser said Wednesday morning, telling her colleagues that the committee would continue ‘puzzling through’ the bill. ‘It’s fairly intense,’ she said.”
– VT Digger: 4-10-24
Good Lord, please, please, stop this nonsense. The level of hubris demonstrated by our legislator’s contrivances can’t be exaggerated… as though they can possibly come up with better solutions than does a ‘free market’.
They’ve been failing now for decades. And still, they persist. Vermont’s children are less and less well educated, their physical and mental well-being is deteriorating at an alarming rate … and the legislature is financially bankrupting us in the process. Just stop.
This ‘tyranny sincerely exercised for the good of its victims may be the most oppressive. It would be better to live under robber barons than under omnipotent moral busybodies…” – C.S. Lewis
“Half the harm that is done in this world is due to people who want to feel important. They don’t mean to do harm; but the harm does not interest them. Or they do not see it, or they justify it because they are absorbed in the endless struggle to think well of themselves.” – T.S. Eliot
Vermonters: Just say no!
To paraphrase the character of George Castanza from Seinfeld; if every policy you’ve enacted has made things worse, the opposite would have to make things better.
kornheiser’s naiveté is astounding. yet there she is, trying to dictate tax and social policy thru her marxist wordview, and people applaud her pretense and pretending.
Re: Kornheiser’s naiveté…
Naiveté?
Why do people rob banks? It’s not because they’re naive. It’s because they know that’s where the money is.
We have entered the period in which our government has created economic and social anarchy. That point in time Benjamin Franklin warned “… can only end in Despotism as other Forms have done before it, when the People shall become so corrupted as to need Despotic Government, being incapable of any other”.
History shows us that this period is consistently the last phase in the collapse of any society. Free market transactions have ceased to exist. Valuations of goods and services are arbitrary. They are set by our elected officials and their appointees, not based on the voluntary transactions between individuals and the law of supply and demand. Rather, they are appraised so as to benefit these elected officials and their appointees personally, at everyone else’s expense. If someone in the private sector did this in NYC, Letitia James would indict them for civil fraud for falsifying appraised values.
Isn’t this exactly what our elected officials and their appointees are doing? What is the CLA (Common Level of Appraisal) that determines one’s net worth – and what these elected officials and their appointees determine to be the amount of tax we are obligated to pay them? What in the world is a ‘cloud tax’? This isn’t naiveté. It’s a willful breach of their social contract to serve the people who elected them. They are nothing but beggars, crooks, and thieves. It would, indeed, “be better to live under robber barons than under omnipotent moral busybodies.”
Smoke and mirrors…..
They’ll be getting more money from Vermonters…..just a little bit at a time and they are hoping you won’t notice!
They have no intent on working with the people of Vermont, they do not believe in the vote of the people…..clearly.
They have an agenda, Agenda 21 from the united nations and they’ll be dammed if any town hall vote or voting public in general will slow them down.
See they really don’t care how you vote, what you think…they are going to do as they damn well please. You’re going to own nothing and be happy, and no we don’t have to disclose bugs as an ingredient in your food. Hope you enjoy the new soylent green!
the vermont state house looks at you key board thumpers as just a pain in there …//// on tel//// lie//// vision/// the govie wants the franklin county sheriff to resign/// now is the govie trying to over throw an election in franklin county/// i think arrest warrants are long over due/// do you really need any more proof/// did govie and his construction company get any contracts from the state transportation agency////
I can hear the businesses in New Hampshire, New York, and Maasachusetts cheering already…
So those in Vermont legislature want to be the first in many thing….we only need to move up 2 places and we’ll be the highest taxed state in the union for our lifetime by percent earnings.
Feudal lords used to take 33%, Vermont takes 45%.
The average life time earning $1,442,000
Lifetime taxes $651,434
Sad part is you have to go down pretty far on the list to find a life time earning lower than Vermont, at which the percentage of life time taxes is much less at that point.
UNAFFORDABILITY IS OUT BIGGEST ISSUE FOR VERMONT RESIDENTS!!!!!!
https://www.self.inc/info/life-of-tax/
We may not like property taxes at this moment, but funding via consumption is very fluctuating and school funding needs stability. Property taxes are a much more stable source of income. And JT is right – border businesses would experience a marked shift.
Actually they really are not, due to property taxes being based on income. When I sell my 900 sq ft house I am looking forward to the state losing money. Because whom ever buys it will have a lower income than mine, or I could wait until retirement and pay less in property tax myself…….either way I win finally….. for now.
HHilltop: If our investment in school funding requires stability, is it not reasonable to expect a stable return on the investment? Our children are failing in every academic discipline. Suicide rates and drug overdoses are epidemic. Parental rights are virtually non-existent. The traditional family and middle class are being destroyed. All while this school funding is bankrupting average homeowners. Stability? For what?
Why is it that the schools and government need stability in THEIR funding, how come the rest of us little people have to deal with instability EVERY DAY? You know, the car breaks down, the heat system fails, our roof needs replacing, that is not part of our normal regular expenses and it impacts our income stream. You know what we do? We suck it up and make it work, what is so hard about the blood sucking public entities doing the same? Just saying…
“We couldn’t figure out what percentage we would have to charge for consumption tax. That would be a tax on all goods and services.”
What percentage will raise 1.94 billion for the projected 2025 budget? Consider that unknown percentage and how that upward spiraling tax will be affect everyone and everything. I say upward spiral because I can’t recall the cost of education ever decreasing.
For example, you hire an electrician to replace your breaker box because, of course, most things electric are being “mandated” so an adequate box is necessary, and the required electrician provides a service.
He/she (a master electrician) tells you (currently) the charge is $85/hr for the work as well as mileage, right up front (has to cover the higher gas or ev charging tax as well as the cloud tax for the GPS and any other subscription software).
If an assistant is sent, the hourly charge may or may not be lower, but probably includes the cost of an accountant and or bookkeeper to keep track of payroll and general business expenses. Add the cost of the box and other materials (plus tax) as well as the trash fee, which will be more because trash will have service tax added. Then there’s lunch and the business cell phone with the associated taxes. Have I forgotten anything?
Does it spread the burden, or is it an illusion on the level of David Copperfield’s disappearance of the Statue of Liberty? You might decide to move to NH to keep things simple.
We’re in dire budgetary straits for quite some time, with no real solution but, tax, tax, tax our elderly and young population right out of the state.
So, I have a proposal. It may not sit well, but here it is. Vermont has 14 counties, 30 Senators and allegedly 150 Representatives. My proposal would slash the Senate from 30 seats to 14 seats, plus minus the Representatives from 150 to 28 Representatives due in large part to the ineffectiveness of the body as a whole.
At $812.00 per week that would save the taxpayer roughly $120,000 a week. Now that doesn’t include the additional savings in perks. Budgetary issues, no problem, slashes, it’s what state agencies do when clientele don’t use their allotted sources.
Then perhaps a little wiser use of building maintenance budget. perhaps rather than gold lined seat cushions for the lounge chairs a fresh coat of paint of the East exterior of the Capitol might be in order. Just one peon’s opinion.
I like your idea of one senator and two representatives for each county. This would actually give a voice to the counties that comprise the northeast kingdom.
AND I’d propose an additional option to the reduction of “REPRESENTATIVES” go back to meeting every other year AND For a very short time period. FURTHER reducing the cost to tax payers. And MAYBE, just MAYBE they would stop with all the falderal and complete actual business.
Love this. I spoke at our town meeting about the propsed Value Added Tax(VAT) that was proposed in 1997ish as an alternative to Act 60 but it was only supported by a minority of House members at that time Proponents predicted that Act 60 would eventually collapse upon itself but they were labeled “Fear Mongers”.
this is why you need to learn the construction trades/// basic house pluming and electrical are not that hard to master///// i am the master of my house/// no help is needed/// property taxes are great until you wake up some morning and find your self living in a tent/// if you think you have a home less problem now , keep doing what you are doing now///
You liberal leftist Dem Swamp Rats 🐀 🐀
Stick more taxes where the sun doesn’t Shine! Up You know what period!!
Hey Vermonters have you had enough
yet from these so-called Ludicrous law- makers that tell you that they care !
Just more bull dung day in and day out!!
We need to send them packing in November 2024 period!!
Wake up Americans wake up Vermonters!!
$$%&×+==$$$$*&%$
VOTE RED, RED, RED, RED, RED VOTE RED
GET-R-DONE PATRIOTS GET-R-DONE 🇺🇸
Here’s a novel idea – how about reducing the education budget instead of trying to fund it? I am positive there are many places to be cut. Our school board members have limited ability to make cuts but the agency of education/legislature has that power. i.e. Do we need to fund after school programs? Let’s give that responsibility back to parents! Couldn’t the superintendent’s office in each district be analyzed? Let’s return to pre-pandemic staffing. There are many more cuts to be made, too numerous to list all.
The premise sounds great. EVERYBODY pays. But in reality, would 1% be enough for the ones in Montpelier when they say “FOR MEEEE???” when they see the money?
IF it would be written into the law that the school portion of property taxes were eliminated it would be a good thing. I agree that everyone, resident, tourist, drug dealer, and the infamous underground economy would pay.
How about a CONSUMER TAX, as in, if you use the school you pay an additional user tax on top of your already prohibitive property tax. That way folks will be even more keenly aware of the ridiculously overpriced education is in this state. Instead of the “many hands make light work” concept it is the “ if you want virtually one on one private tutor education for YOUR kid, YOU pay for it!!!
Have these geniuses in wondered about what the towns are going to use for funding if the really eliminate property taxes? Do they EVER consider the big picture or just remain fixated on their agendas? Stupid is as stupid does . . .