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Brandon voters back local option tax

BRANDON — On June 30, Brandon voters approved the establishment of a 1 percent local option tax on sales, meals and rooms, and alcohol, subject to the approval of the town charter, which was also approved.
The option tax measure passed by a vote of 328-132, with two ballots blank or spoiled. The charter was approved by a tally of 358-91.
Before a local option tax can be instituted in Vermont, the Legislature has to accept a change to that town’s charter. In the case of Brandon, this is actually its first charter.
The option tax  generated the most discussion at a public hearing the night before the vote, as any new tax would. It would mean an extra $1 on a $100 dinner check or hotel room in Brandon. A dozen other Vermont towns currently collect an option tax, including Middlebury, Rutland Town and Killington. Colchester will begin levying a local option tax on Oct. 1.
“The option tax is revenue,” Town Manager Dave Atherton said after the vote results were announced. “The voters asked for it and we found it.”
The State Department of Taxation and Finance oversees collection of the option tax, where 30 percent would be paid to the state and 70 percent would go to the town on a quarterly basis. Revenues from the tax will be used strictly for municipal purposes and not for education expenditures, according to state statute.
It is estimated that Brandon could collect roughly $120,000 a year from an option tax.
Brandon selectboard Vice Chair Seth Hopkins said the board wanted to make it clear in the charter language that the option tax funds will be used solely for town capital projects, meaning public works and/or infrastructure projects.
“This money will be collected and held in a separate fund from the General Fund,” he said. “It cannot be used for General Fund purposes, or to pay salaries.”
At the June 29 hearing, Atherton said it would take at least five years before there is significant money collected for capital projects because those are the most expensive.
“Look at what $100,000 can buy,” he said. “About one mile of resurfaced road,” adding that a 10-foot long culvert on Wood Lane that needs replacing will cost the town $285,000.
“It costs a lot to do these jobs,” Atherton said.
But Brandon Inn owner Louis Pattis said he has contracts with tour companies that bring visitors to the inn. He said those contracts couldn’t be amended to include an additional 1 percent tax.
“We are going backwards with these companies, and losing money,” Pattis told the board at that hearing.
Hopkins agreed that applying the tax to advance bookings is a challenge.
“I don’t have an answer,” he said. ‘I think that’s a question for the state tax department.”
Now that voters have approved both the charter and the option tax questions, the state Legislature will have to approve Brandon’s request to levy the option tax during the next legislative session in January. Hopkins said once that happens, the tax would likely go into effect in July 2016.
Selectboard Chair Doug Bailey said the local option tax was the best thing the board could think of to create new revenue.
“None of us want more taxes,” he said, “but at least this is spread out over everybody. Most of the comments this board has gotten from folks is that we need to generate revenue to fix our roads and we need to attract new businesses. Pardon me, but how do you attract businesses to a town that looks like crap?”

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