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BILL AS INTRODUCED 2007-2008

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S.61

SHORT FORM

Introduced by Senator Mullin of Rutland District

Referred to Committee on

Date:

Subject:  Property taxpayers’ bill of rights

Statement of purpose:  This bill proposes to:

(a)  Reduce the impact of grand list growth on property tax rates.  It would create a CLA “circuit breaker,” which would limit the amount by which a town’s common level of appraisal could be reduced in any one year to five percentage points for purposes of determining education property tax liabilities.

(b)  Limit the annual increase in the education property tax burden to the rate of Vermont’s overall economic growth and the current rate of inflation.  Thus, for purposes of calculating the annual adjustment of the homestead and nonresidential property tax rates, the education fund balance would be projected using the lesser of:

(1)  the actual growth in education spending; or

(2)  education spending growth limited to the average of:

(A)  the current annual inflation rate; and

(B)  the current annual growth rate in the state gross domestic product.

(c)  Cap the amount of property tax adjustment (prebates and rebates) allowed in any one year at $7,500.00. 

This cap would relieve property taxpayers from the extra burden created by paying large property tax adjustment amounts to homeowners living in expensive houses.  Following are two examples of what a $7,500.00 cap could mean:

Rebate example:  An owner with $45,000.00 in household income must pay the first $2,250.00 of total property tax (five percent of household income).  Assuming a combined local municipal and education tax rate of $2.50, this means the owner is required to pay the equivalent of property taxes on the first $90,000.00 of housesite value. 

Even if the rebate is capped at $7,500.00, this owner’s housesite value could be as high as $390,000.00, and the owner would pay no additional property tax.

Prebate example:  An owner with $75,000.00 in household income, who lives in a district with education spending of 50 percent above the per-pupil base amount, must pay $2,025.00 of education taxes (2.7 percent of household income).  Assuming the town’s education tax rate is $1.75, and its municipal tax rate is $0.75, under the prebate calculation, the owner is required only to pay the equivalent of education property taxes on the first $116,000.00 of housesite value. 

Even if the prebate is capped at $7,500.00, this owner’s housesite value could be as high as $544,000.00, and the owner would pay no additional education property tax.

(d)  Control education spending growth.

(1)  Towns choosing to spend more than 110 percent of the prior-year statewide average per pupil would raise any additional spending on their own grand list.  That is, towns would be required to share revenues only to support other towns’ spending up to a maximum of 110 percent of the statewide average.  

(2)  No municipality would be allowed to spend more per pupil than 125 percent of the prior-year statewide average per pupil. 

(e)  Repeal the mandatory payment of property tax adjustment amounts to towns for payment of property taxes and reinstitute the payment of the property tax adjustment amounts directly to claimants.

(f)  Require consolidation of school boards so that there is no more than one board per supervisory union or district.

(g)  Require all districts to contract for an energy audit of all school buildings and to file with the commissioner of education the audit, together with a plan to reduce energy consumption.

(h)  Prohibit districts from paying for the health insurance of any employee an amount that exceeds the average per person cost of health insurance paid in Vermont, as that average is determined by the commissioner of banking, insurance, securities, and health care administration.

(i)  Require that the commissioner of education negotiate a statewide teachers’ contract to be presented to the general assembly and the governor by January 1, 2008 for approval or disapproval in the 2008 legislative session.

(j)  Prohibit any district from spending more than 35 percent of its total budget on expenses not directly related to the classroom unless the district receives express pre-approval from the voters in the district and from the general assembly.

(k)  Create a committee comprised of two members appointed by the president pro tempore of the senate, two members appointed by the speaker of the house, and four members appointed by the governor to develop a system by which districts that consolidate receive a tax benefit.  The committee shall present the report to the general assembly no later than December 1, 2007 for enactment in the 2008 legislative session.

(l)  Vest within the department of education all responsibility for the provision of special education services in the public schools, including the development and implementation of individualized education plans; appropriate to the department for this purpose all funding related to special education; and shift all special education budgeting considerations and responsibilities from the districts to the department.

(m)  Prohibit state aid for any district in which the number of children in any classroom is less than 75 percent of the average number of children per classroom on a national level.

(n)  Direct the commissioner of education to report to the general assembly by January 1, 2008, on whether to institute a bulk purchasing program for school supplies, cleaning supplies, textbooks, and other school items.

AN ACT RELATING TO A PROPERTY TAXPAYERS’ BILL OF RIGHTS

It is hereby enacted by the General Assembly of the State of Vermont:

(TEXT OMITTED IN SHORT-FORM BILLS)



Published by:

The Vermont General Assembly
115 State Street
Montpelier, Vermont


www.leg.state.vt.us