Now 65 percent of Vermont property owners qualify for income
sensitivity; people with household incomes up to $90,000 are eligible
for full relief and some benefits are available to people with household
incomes of up to $97,000.
The Vermont House Ways and Means committee is working on ways to reduce
the total $161 million cost of income sensitivity to the state. At the
urging of Vermont Governor Jim Douglas, the committee is considering the
creation of a cap on income sensitivity for homes valued at or above
$400,000. So the first $400,000 of value would be income sensitized and
everything after that would not.
There are several glaring problems with the arbitrary assignation of the
$400,000 cap. First, a $400,000 home in Warren may not be worth
$400,000 in Barre, nor in Northfield, nor in Moretown. To offset the
fact that the same three-bedroom, two-bath Cape on two acres could be
worth $400,000 in Waitsfield and $250,000 in Roxbury, the state's
convoluted Common Level of Appraisal (CLA) would have to be applied to
the $400,000 number.
The CLA is a ratio calculated by the state to determine at what
percentage of fair market value towns have their property appraised.
This makes the complexities of Act 60/68 that much more algebraic and
indecipherable, but that is really beside the point. Four hundred
thousand dollars is a capricious and somewhat arbitrary number.
If the Legislature wants to crack down on income sensitivity, the
ceiling ($90,000 to $97,000) should be lowered, or some real effort
should go into researching the average home value in Vermont (after all
values are CLA washed, of course) and the average home value of all who
receive income sensitivity. Where did $400,000 come from? What is it
based on?
Why not create a system that assesses state property tax based on income
and assets? That would be a more honest system than the game of Act
60/68, which rewards towns for maximizing average daily enrollment (on
one particular day of the school year) and minimizing per pupil
expenditures to avoid the state penalty for spending? That's just a
shell game.
Creating some new value cap is no less of a shell game. Unless that
figure can be explained using current data, it makes no sense.
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