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ACT NO. 49

(H. 548)

Equal Education Opportunity Omnibus Act

This act makes numerous amendments to education finance law, state tax law and administrative fees.

The act creates substantial tax reductions and taxpayer benefits, the major provisions of which are:

1. Education property tax: The burden on local share education property tax is reduced through various provisions of the act, including (a) equalized yield guaranteed to be at least $40 in fiscal years 2000 and 2001; (b) additional transportation reimbursement funding; (c) inflation indexing of the block grant; (d) delay in caps on special education funding; (e) state support grant enhancement through maximum ADM loss and added small school support.

Income sensitivity provisions are expanded through various amendments, including (a) removal of the $75,000 income cap for homesteads valued at $160,000 or less; (b) expansion of benefits for certain co-owners; (c) expansion of benefits for business owners.

In addition, property tax bills will now be issued by the towns, not the state; and the income sensitivity adjustment is paid each year in advance of property tax bills, as a "prebate", with an annual "true-up" adjustment the following spring.

2. Personal income tax: Rate is reduced from 25% to 24%, beginning January 1, 2000. The earned income tax credit is retained at a minimum of 25% of the federal credit.

3. Sales tax: A new exemption is created as of December 1, 1999, for each article of clothing which costs $110 or less. Footwear will also be exempt from sales tax, for items costing $110 or less, beginning July 1, 2001.

In addition, the act extends the grand list freeze for hydroelectric facilities; adds a generation-skipping tax to Vermont law (does not increase the tax burden on the taxpayer, however); extends to 2004 the time in which a municipality may opt to impose local sales or meals taxes; and makes numerous other changes to tax laws and administrative fee provisions.

For further detail, a section-by-section summary of Act 49 is available in the office of the Legislative Council.

Effective Date: Various effective dates are provided in the act.