Middlebury residents can vote to help stimulate local economy
As Middlebury residents go to the polls on Tuesday, March 2, they’ll have the opportunity to change the long-term economic fortunes of the town through one measure: Casting a vote to phase out the town’s antiquated machinery and equipment tax. The measure is written as Article 10 and calls it a tax on Business Personal Property.
The tax is a holdover from the hay-days of American industrialization. During that era, big corporations built machine-intensive plants with high property value that were taxed by many towns. As industrialization moved abroad, jobs were lost and plants closed, the market for attracting any industry or business to town became more and more competitive, and towns quickly began to eliminate excessive taxes on those industries and businesses that would create local jobs.
Middlebury, however, missed the memo.
For the past decade, the emphasis has been on keeping tax burdens down without seeing that keeping this outdated tax on industry was putting the town at a competitive disadvantage with other communities and placing an extra tax burden on local industries and businesses. The tax currently raises $270,000 annually. The proposal is to phase the tax out of use over six years.
The result of keeping the tax in place, however, hasn’t been favorable.
In the past five years Middlebury has lost more than 500 manufacturing jobs, some of which were growing businesses that moved their manufacturing facilities to neighboring towns with larger facilities and no taxes on machinery and equipment. The result is not only a significant loss of jobs, but a significant loss of revenue on the town’s grand list as property values at those vacant buildings decline along with the general loss of revenue circulating throughout the town because workers and their families moved elsewhere. On a dollar-for-dollar basis, it’s easy to understand how the town has lost far more in tax revenue and dollars circulating in the community with the tax in place.
No one will suggest that the town’s M&E tax was the lone factor that prompted those industries to close or move to more favorable pastures. But town leaders do know that the tax is one more obstacle to overcome when trying to entice business to locate here during a time when other towns our size are actively courting industries with tax breaks and other benefits. If Middlebury is to keep its existing job base and has hopes to be an active commercial center, a new approach is critical.
Maintaining the tax in Middlebury, in short, is the classic example of being penny-wise, pound foolish. By passing the measure to phase out the tax on Tuesday, Middlebury residents and the selectboard will send a new message to the business community that it wants to encourage job growth and is actively working on concrete ways to make it happen. This is the first step on that hopeful journey.