Panton tax increase irks residents
PANTON — When Panton homeowners opened their tax bills late this summer, they found an unwelcome surprise: a school-tax hike of almost 18 cents.
That sharp increase — although it represented basically Panton’s first since 2009 — has sparked reaction by residents and town officials alike, including a Sept. 24 selectboard meeting that was better attended than Panton’s town meeting.
Residents are upset with the pace of education funding reform, which was an issue in Montpelier even before Act 60 became law in the late 1990s.
“This is a very serious issue, and people are extremely frustrated that they can’t make something happen,” said resident Beverly Biello in an email. “My concern is that our legislators are just nipping around the edges and don’t have the expertise or strategic insights to think outside of the box and create a new paradigm for how we fund education in a more efficient and effective way.”
Biello and others said the higher taxes are devaluing their properties, the state’s many small schools and school districts are costly and inefficient to operate, and a school financing system that relies solely on property taxes is increasingly unfair.
The Panton jump this year did follow several years of stability:
The fiscal year 2009 residential school tax rate was $1.5818 per $100 of assessment, and in the next three years it changed little: It was still 1.5811 in fiscal year 2012.
After a 2011 Panton property reappraisal saw assessments increase dramatically, the tax rate dropped to 1.1185 in fiscal year 2013, which was the 2012-2013 school year.
But Addison Northwest Supervisory Union business manager and Panton resident Kathy Cannon said the state collected almost exactly the same amount of school tax money from Panton in the 2013 fiscal year as it did the previous four years.
“The tax rates between 2012 and 2013 were almost identical,” Cannon said.
Then the fiscal year 2014 rate caught the town’s attention.
There is no question of the impact: If a homeowner does not pay taxes based on income sensitivity provisions of the state’s school financing laws, the increase means:
• An additional $360 on a $200,000 home, and a total tax bill of about $3,800.
• An additional $630 on a $350,000 home, and a total tax bill of about $6,650.
• An additional $1,800 on a $1 million owner-occupied lakefront home, and a total tax bill of about $19,000.
Many Panton homeowners will not pay on the full value of their homes. In 2010 about 74 percent of Panton homeowners paid taxes based on income sensitivity provisions in the state’s school financing law and received prebates. The average adjustment was $1,700.
Still, the new bills drew three dozen Panton residents, not including the three-member Panton selectboard, to the Sept. 24 meeting, along with State Reps. Diane Lanpher and Warren Van Wyck, Cannon, and Bill Talbott from the Vermont Department of Education.
In a handout, Talbott explained how the residential school tax rate jumped from 1.185 to 1.3638, or almost 18 cents:
“Per pupil spending increased at the (Vergennes) union elementary and high school. The combined increase accounts for the rate going up 8.39 cents or 47 percent of the increase … Panton’s CLA (Common Level of Assessment) dropped from 104.21 percent to 96.7 percent. This accounts for the remaining 9.49 cents of the increase.”
The education department uses CLAs in order to collect taxes on the fair market value of real estate in towns. If assessments are low, as is the case in Panton according to state calculations, the state raises the tax rate to compensate. Conversely, if town assessments are higher than fair market value, tax rates are lowered.
The other towns that send students both to VUES and VUHS saw lower increases because of more favorable CLAs. Waltham’s CLA is almost exactly 100 percent, and the residential school tax rate rose by nine cents. The Vergennes CLA is above 100 percent, and the tax rate rose by 4.3 cents.
According to Biello, many did not want to hear what’s behind the increase and the long stalemate in Montpelier.
“Our group cut them short on these explanations because we don’t care about the reasons — we’ve been hearing for years how complex it is, the state blames the local boards, the local boards blame the state, etc., etc.,” she wrote. “Our angry reply back at the meeting was, ‘Don’t give us any more reasons, just fix it.’”
Despite the reaction, Panton selectboard members see positives, including greater civic involvement and momentum for creating change in Montpelier, where many believe solutions must be found.
“I thought it was a really great meeting,” said Selectwoman Beth Tarallo. “I was so encouraged by the large turnout both by residents and representatives from both the local and state level.”
Selectwoman Wendy Knight shared a similar perspective.
“In general, I thought the meeting was productive and informative,” Knight said. “I think it was important to hear taxpayer concerns and identify possible solutions and next steps.”
Those steps, she said, include forming a town committee of “residents interested in exploring the property tax issue including formulating recommendations (and) getting their voice heard in Montpelier.”
Knight also said Lanpher, a Vergennes Democrat, and Van Wyck, a Ferrisburgh Republican, agreed to “identify opportunities for Panton residents to testify at the Statehouse on education issues and taxes.”
Both emphasized that residents were ready to attend school board meetings to learn more about the budget process.
“Hopefully, this can be a good opportunity for people to get involved and make changes,” Tarallo said.
Certainly, school spending is a factor in the increase: The VUES budget increased by 4.5 percent this past year, and the VUHS budget by 5.98 percent, mostly due to rising special education and health insurance costs, Cannon said.
But historically, spending at the two schools has mirrored inflation. The average VUES budget increase in the past 10 years is 3.1 percent, and the average VUHS increase in the past decade has been about 3.8 percent.
Selectboard members and listers will also be working on the CLA issue. They were scheduled to meet this past Tuesday with the Department of Education’s district representatives to go over the property sales data that the state plans to use to set Panton’s next CLA.
“Our listers and selectboard are really committed to making sure we look at that report really closely to make sure the properties that are included make sense,” Tarallo said.
That meeting could be the first step in appealing the town’s CLA, something Vergennes and Ferrisburgh officials do routinely and often successfully, at least to a degree. The town will receive a preliminary number in December, and can informally appeal it then, and then a formal number in January that can be officially contested at a hearing in February or March.
Panton Board of Listers chairwoman Joan Burt also shed some light on the most recent appraisal, completed in 2011. Many of those most unhappy might well be lakefront property owners. Of those who appealed their new assessments two years ago, she estimated “nine out of 10” were lakefront property owners.
“I do know that the properties over on the lake went up as usual,” Burt said. “The properties on the lake always go up and the people on the lake are always upset about it.”
If the CLA continues to be a problem, it might make sense for Panton to do another assessment of the town’s properties.
“We’re getting to the point now where we’re looking at another appraisal two years after we just did one,” Burt said.
LOOKING TO THE CAPITAL
While residents will be acting locally, most say what can be accomplished in Montpelier is more important. Vermont is now fifth in the United States in per capita spending on schools, and the highest in New England.
“It is imperative that the Legislature create a new education finance system that focuses on cost containment and that includes local officials in the decision-making process,” Van Wyck said.
Van Wyck pointed to a new law that requires the Legislature “to examine our current education funding system. In order to achieve that goal, the House Committee on Ways and Means will continue their efforts to address concerns regarding education property taxes, including the financing, oversight, and educational outcomes of our current system and shall report its findings to the General Assembly by March 15, 2014, with the goal of implementing any statutory changes for the 2015-2016 school year.”
He said he favored an action that would have required the “General Assembly to replace the education funding system current in law with a new system of education financing by the 2015–2016 school year.”
Van Wyck said a new system should also tax those who are not property owners.
“I agree with those taxpayers at the Panton meeting who spoke that too many residents ‘do not have enough skin in the game’ and others pay a far greater proportion and amount of the homestead property tax increases,” he said.
Lanpher, who along with Van Wyck said she voted against recent increases in the state education tax rate, said education finance reform has indeed been a longstanding issue in Montpelier.
“Education funding and issues related to our Vermont system have been under deep and constant review,” Lanpher said.
What has been done, she said, is passage of the Challenges for Change (C4C) law several years ago that “challenged districts to hold costs down and work with less while still providing high quality education. Addison Northwest Supervisory Union did just this and for several years held budgets down.”
Lanpher also pointed to the law that created incentives for school consolidation, a measure that was defeated several times in ANwSU, although it found support in Panton.
And she cited H.538, which she said made “miscellaneous amendments to education funding law this past session.”
Lanpher said she supported a version of that bill that had “much stronger funding controls.”
Still, she expects to “see additional bills in the coming session that bring up similar spending controls,” and consideration of those will offer some of the opportunities for Panton residents to testify.
“I plan to be in communication and offered my assistance to the newly formed Panton citizens sub-committee that desires to look deeper into education funding,” Lanpher said.
Certainly, Panton citizens will be looking to Montpelier.
“The bottom line is that schools and Montpelier folks are trying to put Band-Aids on a patient that’s dying from major internal bleeding,” Biello said. “The system is critically broken and someone up there has to take some leadership and begin to create a new model.”
Andy Kirkaldy may be reached at [email protected].