VERGENNES — With the Vermont Department of Taxes release late on Friday, June 30, Vergennes officials said the overall city residential tax rate will rise by about 4.25 cents, or about 1.8 percent.
For fiscal year 2017-2018, owners of city homes will be taxed at a rate of $2.4375 per $1,000 of assessed value.
That figure includes the 81-cent municipal tax rate the Vergennes City Council adopted on June 27 in order to pay for city services. The council chose to use about $73,000 of a projected year-end fund balance of at least $140,000 to help fund services from July 2017 to June 2018, while retaining the rest of the fund balance as a safety net.
Added to the overall rate is an amount paid to the state that accounts for school tax revenue lost because of property-tax exemptions for disabled veterans and the Masonic building on School Street; it amounts to 0.38 cent on the tax rate, according to City Manager Mel Hawley.
The overall residential tax rate also includes the homestead school tax rate. State officials pegged the Vergennes homestead, or residential, tax rate at $1.6237 for those who pay solely on the value of their property. That figure is a 2.16-cent increase over the 2016-2017 fiscal year rate, or about 1.3 percent.
Many homeowners in Vergennes and other Vermont towns pay school taxes based on their income, not on the value of their property, and will be eligible for prebates under the income-sensitivity provisions of Vermont’ school-finance laws. Typically at least two-thirds of homeowners pay based on their income.
Those who do pay based solely on the value of their homes will be looking an additional $42.50 of taxes per $100,000 of assessed value.
Three of the four other Addison Northwest School District towns saw significant decreases after district unification approval (Panton’s rose slightly), one provision of which created a 10-cent discount for ANWSD residential taxpayers in the coming fiscal year and smaller discounts in the following four years.
But without unification, Vergennes could have seen a much higher increase in its tax rate because of decreasing enrollment at city schools and ongoing payments to eliminate debt at Vergennes Union High School due to past failures to properly account for the costs of special education.
Under the merger, all students at the four ANWSD schools are counted as one population. From the 2015-2016 school year to this past year the Vergennes residential school tax rate rose by 9.37 cents to $1.6021.
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Meanwhile, the overall Vergennes non-residential rate for 2017-2018 will rise by 6.17 cents, or 2.7 percent, to $2.3408.
The changes in the city rates are the same for the non-residential rate (an increase of 2 cents to 81 cents for the municipal rate), while the state non-residential school tax rate is rising by 4.16 cents to $1.5270.
CORRECTION: Due to a miscommunication in a June 28 phone interview, the Independent’s June 29 edition erroneously stated the amount of money the city council used from its fiscal year 2016 fund balance to offset taxes in June of 2016; the council applied $100,000 of what eventually proved to be an audited fund balance of $180,000.