VERNON -- After extended negotiations in Montpelier, the town’s property owners now know when their valuable tax break will expire.
As the 2014 Legislative session wound down last week, lawmakers agreed on a bill that will phase out Vernon’s 25 percent break in the statewide property tax by 2019.
That’s a lot sooner than some Vernon advocates had hoped. But the schedule at least represents some extension of a tax reduction that could have expired when the Vermont Yankee nuclear plant shuts down at year’s end.
Windham County state Sen. Peter Galbraith, a Townshend Democrat, noted that some of his colleagues fully understood the impacts that Yankee’s closing will have on its host town of Vernon.
Sen. Tim Ashe, a Chittenden County lawmaker who chairs the Senate Finance Committee, "was a great ally who was much influenced by testimony we heard several years ago in economic development about the devastating impact on Wiscasset, Maine of the closing of Maine Yankee," Galbraith said. "The Selectboard head from Wiscasset said no matter how much you are prepared, you really are not. So there was great sympathy for Vernon on the Senate side, and that was very useful."
The tax benefit is specific to Vernon and dates to the 1990s. Because Vermont Yankee pays a state electric-generating tax, and because Vernon hosts the plant, those who own property in town pay just 75 percent of the state’s education property tax rate.
That tax break was in danger with Yankee’s pending closure, and Rep. Mike Hebert, R-Vernon, warned of a sudden jump in property taxes for Vernon homeowners.
Hebert initially proposed extending the tax break for as long as Yankee’s decommissioning lasts -- possibly for decades.
"That was never going to happen," Hebert acknowledged on Monday, just a few days after the session ended. "No one was with me on that one."
In April, the House passed a version of the education tax bill that phased out the Vernon tax break by 2018. Several weeks later, the Senate -- at the urging of Galbraith, who sits on the Finance Committee -- approved a version of the bill that preserved the tax break for an additional year.
As House and Senate members worked out the differences in a conference committee during the session’s final week, Hebert and Galbraith were pushing hard to keep the Senate’s Vernon language intact.
"It went to conference committee, and all day Thursday and Friday I worked to try and convince the House to see it my way," Hebert said.
Galbraith added: "I sat in on almost the entire House-Senate conference on the tax bill to make sure the Senate version of the Vernon tax break remained."
They got their wish, as the Legislature agreed on this structure: Vernon property owners will continue to pay 75 percent of the statewide education tax rate in 2015 and 2016, as if nothing had changed with Yankee.
In 2017, the rate rises to 83 percent, followed by another bump to 91 percent in 2018. The following year, Vernon residents will pay the same state education tax rate that property owners in other towns pay.
Galbraith said the extra year is significant: Overall, "the Senate language should be worth another $2 million to Vernon as compared to the House."
Hebert thanked Galbraith for his work on the bill.
Ideologically, "we differ on a lot of things," Hebert said. "But certainly, we both try to do what’s in the best interest of our constituents."