How About Cutting Property Taxes?

May 24, 2018

by Rob Roper

Governor Scott’s staff presented the Administration’s plans for, primarily, preventing an increase in property tax rates this year and, long term, to create a five-year plan for getting some meaningful control over the Education Fund and saving hundreds of millions of dollars. Underlying the whole issue is Scott’s overarching promise not to raise taxes or fees.

Adam Greshin, the commissioner of finance and management, pointed out that the state has benefited from unanticipated revenue of roughly $160 million this past year, and, as such, there should be no need whatsoever to raise taxes. Good point.

The Governor’s plan, in a nutshell, is to use $34 million of the above mentioned unanticipated revenue as “one time funds” to hold property tax rates in line for this year, then put into place reforms that would generate net savings of roughly $300 million (gross savings of around $500 million) over the next five years. Some of those savings would be used to pay back the use of the one-time funds. The rest of the net, so the Administration pitched, would be “reinvested” into things like higher education, expanded pre-k programs, addressing pension liabilities.

Not a property tax cut?

Greshin bent over backwards to state and re-state in a variety of terms and phrases that this is “a reallocation of funds within the Ed Fund.” It’s not a cut in spending. At one point he assured legislators, as if this were a selling point, that, “We could actually have more money in education as a result.”

What?

If you can generate nearly half a billion dollars in savings on education spending in Vermont, shouldn’t CUTTING property taxes at least be on the list of things to do with the savings, and fairly high on the list at that. If Vermont property taxes are unaffordable today, merely holding the line on them does not make them affordable – it freezes the unaffordability in place! (Though it is certainly better than the Democratic alternative of higher property taxes as far as the eye can see.)

The Governor and his staff deserve a lot of credit for putting forward a number of proposals that could result in efficiencies and savings in public education. Even if the savings turn out to be $100 million rather than $300 million, that would be worth while. We can certainly agree on that. What to do with the savings? That might be a fight we have to wage down the road.

Rob Roper is president of the Ethan Allen Institute.

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