City tax bills jump 20 cents after smaller increases

VERGENNES — After two years of modest tax increases — 2.4 cents in 2018 and 4.25 cents in 2017, or between 1 and 2 percent — Vergennes homeowners are seeing a more dramatic change when they open their tax bills this week.
The new overall city tax rate calls for an increase of 20.21 cents, or about $202 of new taxes per $100,000 of assessed value.
Of that total, 11.69 cents is due to an increase in the homestead school-tax rate. Declining Addison Northwest School District enrollment, higher fixed costs, and rising health insurance expenses are pressuring the district budget.
Residents who pay based on their incomes are likely to receive prebates for a portion of their school tax bills, however. About two-thirds of county residents receive prebates, according to state data.
The portion of the city tax rate that will support city spending is rising from $0.8385 to $0.9237, or a tiny fraction more than 8.5 cents.
That rate includes 0.37 of a cent to account for tax breaks awarded to the Vergennes Area Rescue Squad, the local Masonic lodge, and disabled veterans,
Homeowners with $47,000 or less of annual household income might be eligible for an adjustment on their municipal property taxes, according to Vermont law, and should seek tax advice.
The increase this year brings the total tax rate on city homes to $2.6597. Despite this year’s larger increase, over the past three years the overall increase has averaged a little less than 4 percent a year —  roughly 11.2 percent from the overall tax rate in 2017 to this new rate.
The city’s new non-residential rate totals $2.5159, including a $1.5922 commercial school-tax rate.
It represents an increase of almost exactly 11 cents over the past year’s rate, meaning a tax increase of $110 per $100,000 of assessed commercial property value.
City officials said the main driver in the higher municipal rate this year was a 15-percent increase in the cost of providing health insurance to city employees. That translated to an additional $94,000 in spending, enough on its own to add about 4 cents to the rate.
The city council made final a 92-cent tax rate at its June 28 meeting, and City Clerk and Treasurer Joan Devine and Assistant Clerk and Treasurer Melissa Wright calculated the small additional local rate earlier this month.

The city council did not formally adopt a budget on June 28, but attended to that detail at its Tuesday meeting this week.
The final number, exclusive of sewer spending supported by user fees, came in at $2.55 million, higher than the $2.426 million initially proposed by City Manager Matt Chabot.
Some of the higher spending came after the council ultimately declined to support proposed cuts in the Vergennes Police Department, even though four members of the council had agreed at one point that one officer should be laid off.
Many residents as well as Police Chief George Merkel argued against the cuts, although some also supported Chabot’s point that police spending was too high of a percentage of the overall budget and the department was too large.
Others backed the department’s size and performance, and according to data supplied by Merkel and members of his department the force’s staffing level is at or slightly less than regional averages for the city’s population.
The budget the council adopted increased police spending by about $25,000 to $890,472. Counting $72,500 needed to pay off the bond that helped fund the 2014 construction of the city’s police station, police spending is about 38 percent of the budget’s total.
Many towns do not include bonded debt within department budgets. Vergennes has historically accounted for bonded debt as line items within those budgets and does so now for public works and fire department spending. Council members and Chabot on Tuesday said they would talk this year about how to account for bonded debt in the future.
That $72,500 line item to pay for the police bond in the previous year’s budget had been taken out of the city’s Water Tower Fund, which is used to help fund city infrastructure projects.
City officials concluded this spring that in 2014, when voters supported the police station project, residents also agreed to pay for construction through the taxpayer-funded general fund. The Water Tower Fund is fed by payments from cellphone companies who install broadcast equipment on the city’s former water tower.
Other changes made to the budget Chabot originally proposed in June were minor.
Andy Kirkaldy may be reached at [email protected].

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