Vergennes tax rate rises 3.6 percent

VERGENNES — Vergennes aldermen on Monday approved municipal spending for the July-to-June fiscal year that, combined with taxes needed to back school spending, required a 3.6 percent increase in the city’s residential property tax rate.
Aldermen set the new overall residential property tax rate at $1.7454 per $100 of property value, up by roughly 6 cents from the 2007-2008 rate of $1.6846.
They said that increase will require about $120 a year more in taxes for a home assessed at $200,000, or $30 per quarterly payment.
Aldermen also set the new city budget at about $1.54 million, an increase of about $102,000, or roughly 7 percent, from a year ago.
Most of the 6-cent hike to the tax rate was driven this year by city spending: more than 3.7 cents of that increase came from the municipal base rate of 60.29 cents, which includes a small amount needed to pay for voter-approved property tax reductions for disabled veterans. Last year’s municipal portion of the overall property tax rate was 56.35 cents.
The school tax portion of the overall rate for homeowners rose by about 2.35 cents to $1.1425 cents. The combination of the school and municipal hikes creating the overall increase. 
As is the case statewide, the non-residential tax rate will be higher. In Vergennes, the overall commercial rate will be $1.8379 per $100 of property value, an increase of about 7.1 cents.
That hike will translate to an increase of more than $140 a year per $200,000 of assessed value.
Aldermen said City Manager Renny Perry did well to hold the line on city spending considering rising fuel, energy, salt, paving and insurance costs.
Alderwoman Diane Lanphear said further cuts could be made to line items that included paving, but that the long-term costs would outweigh the short-term savings in virtually every case. 
“Renny did a really good job,” Lanphear said at Monday’s city council meeting. “We could trim it so there is no more in taxes, but we know what’s coming.”
Aldermen did consider whether to use $40,000 in a modest budget surplus toward reducing taxes — each $20,000 could cut the tax rate by one cent. But they accepted Perry’s argument that the money was better devoted to paving.
Perry said several roads are at critical points. For example, he said if Adele Drive had been paved sooner, a $3,000 to $5,000 overlay would have been needed, not a $20,000 rebuild, and other streets are nearing the same condition. 
“Now … we’re not too far behind that curve,” Perry said.
Aldermen also accepted Perry and Mayor Mike Daniels’ recommendation to leave about $9,500 to pay for energy saving efforts, including efficient light bulbs. Daniels said most of those investments would be paid back within three years.  
Perry also noted that he had cut about $54,000 since his first budget draft in early June and $25,000 since June 17. He had hoped for more of a budget surplus, but when that didn’t work out he went back to the drawing board.
“Because our revenue picture did not come out as great as I would have liked to have, I took out more,” he said.
The approved budget includes:
• About $356,500 for administration, an increase of almost $22,000. Insurance costs and other smaller increases drove spending.
• About $410,000 for the police department, an increase of almost $41,000. Fuel, part-time help while an officer goes to the police academy and insurance costs were factors in that hike.
• About $586,000 for public works, an increase of almost $25,000. Vehicle maintenance, fuel and salt drove spending higher.
• About $170,000 for general expenses, an increase of almost $27,000. The addition of Addison County Transit Resources and the Vergennes Area Rescue Squad to the budget boosted this miscellaneous part of the budget, as did the new line item for energy savings projects.
The fire department budget was not included in the overall $1.54 million figure because much of its support comes from contracts with surrounding towns, nor was the sewer department, because it is supported by user fees.
Aldermen said the new VELCO substation, which was assessed at $5 million, and an overall uptick in the city’s grand list, did help them keep the tax rate under control.
And Perry said he worked hard to keep costs down.
“I’m a fiscal conservative,” he said. “I’m putting in there what is needed to make it work.”
But aldermen still sat for a half-hour before acting on the motion to approve the budget and create the new tax rate. The mayor helped break the stalemate.
“I don’t think we have a choice, people,” Daniels said.
Aldermen also considered whether to write a letter of support for a Community Development Block Grant to help fund senior housing and a senior center on land near the American Legion clubhouse north of Monkton Road.
The council has passed a motion that it will oppose all nonprofit housing initiatives in Vergennes as long as a recent Vermont law is in effect that would allow nonprofit agencies to apply to have their properties appraised based on their ability to generate income, not on their comparable sales value.
Because most nonprofit housing developments are designed for low- or middle-income families or seniors, basing property assessments on their income flows can lower their assessed value and thus their tax payments to host communities.
Aldermen argue that affordable housing is a statewide good, and host communities should not bear the burden of taking in lower taxes.
Perry said he only put the request from the project developers before the council because of aldermen’s support for senior housing. He also noted that all nonprofits in Vergennes are now paying based on comparable values, not the income approach. He acknowledged, however, that future leaders of the groups could reverse field.
Aldermen said they would not make an exception for the senior housing and center project. 
“We ought to stick with it (our statement),” said Alderwoman Ziggy Comeau. “I think we ought to make a stand.”
Alderman David Austin said nonprofits should not ask to “run their businesses on the backs of taxpayers,” and that a program modeled after statewide current use legislation would be more fair.
“It’s basically a license for these entities to steal … Basing it on the income approach is ridiculous,” he said.
Lanphear was the lone voice of dissent. She said aldermen should support needed senior and affordable housing while opposing the law.
“I would not like to use housing as a weapon,” she said, adding that “almost 70 percent of the population needs affordable housing.”
Perry said momentum is building to amend the law.
“I think in the next session that’s going to change, anyway,” he said.

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