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Editorial: How to make silk out of a sow's ear in New Haven

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Posted on September 3, 2015 |
By Angelo S. Lynn



The town of New Haven offers an interesting lesson in the value of property as it relates to the town’s grand list and tax rates. At issue is a proposal by Anbaric Transmission that essentially adds $130 million to the town’s current grand list of roughly $260 million. That 50 percent increase would seemingly create a huge windfall in terms of property tax relief.

But huge is a relative term, and it is mitigated by numerous factors — primarily that the increase to the education portion of the tax rate (typically as much as 75 percent of the total taxes on a property) goes to the state where it is dispersed and ends up being a relatively small benefit to the local resident in the host town.

If Anbaric’s proposal were approved at today’s rates, for example, town taxes would drop about a third, meaning that a house valued at $200,000 and pays municipal taxes amounting to about $750, would see their taxes cut to about $500. As a percentage, that’s a big number. But when it’s part of the total amount of taxes paid on the house (education and municipal) it amounts to less than a 10 percent decrease (see story on here). Furthermore, when you consider that about 70 percent of property taxpayers in New Haven receive income-sensitivity rebates, and another 10 or so percent have land in current use, the impact on the community is even less.

Now, cutting town taxes by 33 percent is no small matter for those paying full freight, but saving $250 annually, and on a declining basis as depreciation takes effect, is not making anyone wealthy.

What, then, is the town to do?

Should it reject offers like Anbaric Transmission and shut down future offers to tap into the VELCO substation, or is there another approach the town might consider? What if New Haven residents changed their outlook and considered the VELCO substation an asset, not a liability?

How so? It’s an asset because it is the northern terminus of the power line that carries 345 kilo-volts. The power lines going north to Burlington have far less capacity; that’s why Anbaric wants to tie into the substation in New Haven and not points further north. In short, the town has an asset that is important to power transmission companies. Furthermore, with renewable power increasing in demand (from a public policy perspective) in Vermont and southern New England, that demand is likely to grow. With ample hydro and wind power available in Quebec (the supply), New Haven finds itself blessed and cursed with the VELCO substation that can handle increased capacity to meet the demand down south.

The curse is the visible blight on the community, the alleged humming sound that is disturbing to nearby residents, and meager property tax impact.

But if New Haven thought of that substation as a gold mine, in allegorical terms, what could it do? Might it create a greater industrial zone around the substation, have interested parties (like Anbaric or a competing transmission company like TDI) agree to make nearby residential owners “whole” in their property values, and then proceed to create a commercial zone around the substation in which the town generates real value for its residents over the long term — and potentially also help the greater good of the state and region (which the transmission of renewable power does.) What does real value mean? Well, like wider shoulders along the public roads that Anbaric hopes to parallel; or perhaps annual sums or benefits to the town as Cornwall leaders had contemplated with Vermont Gas Systems if that company’s pipeline project to Ticonderoga, N.Y. had been approved. Ask for too much, and companies can pay the extra money to bury their lines further and hook into a similar substation in West Rutland, but that’s a cost that can be put on the table.

One essential question must first be addressed: Would an increase in power transmission mean the VELCO lines would need additional infrastructure to handle the load, and would that mean a further degradation of property values along the length of the line to Rutland? The 2006 VELCO project was an aesthetic disaster from the start, and making it worse will undoubtedly cause howls of protests up and down the corridor (which is reason why they should be part of the solution.) But if the additional power load doesn’t require unsightly upgrades to the VELCO transmission line, one might think there is value in maximizing the asset the town has, rather than wishing it weren’t there.

Like it or not, the VELCO line is a part of New Haven. The question is whether the town prefers to consider it an albatross it can’t shake, or works to make silk out of a sow’s ear.

Angelo S. Lynn

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