In my experience, I have found that mischaracterizations and misinformation creep into debates that are often clouded by fear of “change.” This was no less the case in a recent opinion piece in which a 1 percent local option tax proposal was characterized as a 16.7 percent increase.
Through the LOT, the tax rate would increase by 1 percent on items subject to the Vermont sales tax and rooms and meals tax. This is an additional penny per dollar. The 16.7 percent figure is the increase in the amount that would be paid as a portion of a 7 percent sales tax, not an actual sales tax rate increase. The amount of tax paid would vary based on the cost and type of transaction, just as it does today. The rooms and meals tax, now 9 percent, would increase by 1 percent, making the difference in the amount that would be paid as tax 11 percent (not 16.7 percent). The sales tax on alcohol served, currently 10 percent, would increase to 11 percent, making the difference in the actual amount of tax paid 10 percent (not 16.7 percent). Accuracy in terms is required here, not misinformation.
PLAYING WITH NUMBERS
But all of this is playing with numbers. On typical grocery bills, the actual differences amount to cents, not dollars, especially since many items purchased at the grocery are not subject to sales tax. And, for a $100 restaurant bill for food and alcohol, with $20 of the bill being for alcohol, the LOT would increase that bill by $1. Where cents do matter to people, The Valley has a solid safety net to provide assistance, should it be necessary. However, experience in the other LOT towns has shown this not to be an issue.
Regarding concern as to the best way to use the funds, the Mad River Valley Planning District local option tax subcommittee has spent many months considering numerous options in developing a proposal. The work has been informed by three decades of study, planning and discussion within the framework of the Mad River Valley Planning District. Meetings have been, and continue to be public, as have been the meetings of the tri-town LOT MOU negotiating committee. Through the services of Mad River Valley public access TV, meetings are taped and can either be viewed on Channel 45 or streamed through https://mrvtv.com/category/community-meetings/.
Perhaps, the additional tax revenue will help to offset projects otherwise funded through municipal taxes, thereby lessening our other obligation. Perhaps, by lessening other municipal tax obligations, our towns will be better able to afford important projects which they are in the habit of deferring due to cost and impact on the taxpayer. Presumably, the initiatives the LOT committee intends to fund through this tax will be the type that draw more taxpayers to our community and improve quality of life.
LACK OF PERSPECTIVE
I continue to be amazed by a perceived lack of perspective on this issue amid desires for so-called “local control,” especially in the context of continued municipal and education tax rate increases. Any taxes one pays through the LOT will be solely influenced by one’s personal habits and spending and is, therefore, subject to the most local control possible. Any increase in the municipal or education tax rate is influenced by the spending decisions of others and the value of one’s home. These annual tax increases alone dwarf what one would pay through the LOT.
For example, this year’s first draft budget for the Harwood Unified Union School District projected an 11 cent tax increase for Fayston, a 5 cent tax increase for Waitsfield and 6 cent tax increase for Warren. For a $300,000 home, that is an additional $330, $150 and $180, respectively, that a resident homeowner would pay in the next fiscal year – on top of the thousands of dollars already paid. Nonresident homeowners will see roughly a 6 cent increase in their tax bill for next fiscal year. That’s about $180 more in taxes on a $300,000 second home. (Note: The adopted budget shows reductions from these original projections.)
The debate and opposition to change I have seen around the LOT is outsized compared to that around the increasing costs of funding our school district budget when one considers the actual money involved. When the district board seeks changes aimed at bringing down costs and improving quality, opponents claim that a few pennies on the tax rate is insignificant. Which is it? Do increases in the amount of taxes we pay matter or not? In a resort community, doesn’t it make sense that all users contribute through an LOT?
Informed discussion is critical to help people learn about the LOT proposal, the need for a charter change in Waitsfield and other spending and tax decisions. Whatever the case, discussion and information gathering should continue. It makes for an informed electorate. But discussion should not be clouded by mischaracterizations and misinformation. That helps no one.
Sullivan lives in Waitsfield, serves on the Harwood Unified Union School District Board and is former chair of that board.
