Bennington Select Board considers 1% local option tax
BENNINGTON — The Select Board began discussing Monday whether to ask voters if Bennington should impose a new tax: a 1 percent local options tax.
Board members will make a decision at their next meeting Jan. 27 whether the issue would be placed on the ballot this Town Meeting Day.
"Is this something that's interesting enough that the voters should decide what happens with this?" Select Board Chairman Donald Campbell said at the start of what would be a nearly hourlong discussion on the local options tax at the Select Board meeting Monday night.
Town officials said the tax would be a way for Bennington to generate more revenue without raising the local property tax rate. And the additional revenue would supposedly bring down property taxes over time.
The local options tax, permitted under recent revisions to the town charter, can be charged on any, all or a combination of the following categories: retail sales, meals, rooms and alcoholic beverages. It would be imposed on top of the state's 6 percent sales tax.
Revenue from the new tax would be divided between the municipality and the state. The state would get 30 percent, which will be used to reimburse municipalities for the tax-exempt state-owned buildings in their town, as well as cover the administrative costs of operating the local options tax program.
Based on 2019 figures from the Vermont Department of Taxes, Bennington could collect $1.8 million through a local options tax on all four eligible categories, said Bennington's Community Development Director Shannon Barsotti.
Bennington's 70 percent share of this amount would be nearly $1.3 million.
Bennington could set aside some of the money for property tax reduction. It could also create reserves for items like capital purchases and infrastructure improvements, parks and recreation, and marketing and economic development.
"It's really up to the board to decide how to use that revenue," Barsotti said in a presentation at the Monday meeting.
Town Manager Stuart Hurd said: "We talk about instantly being able to reduce the property tax." A home valued at $100,000, he said, would see a tax reduction of around $900 going by expenses in the town's new proposed budget.
The municipal property tax rate for Bennington village residents is currently 1.2036 percent.
Select Board member Jim Carroll emphasized there are exemptions to the taxable goods. They include grocery food items, prescription and over-the-counter medication, fuel for home heating, clothing and farm equipment.
Several community members in the audience spoke either in support or opposition of putting the local tax option on the ballot.
One said residents should have a say in such an important decision, while another said there wasn't enough time to thoroughly discuss the issue before Town Meeting Day in March.
If the Select Board decides to put the local options tax on the ballot, Select Board Chairman Campbell said a series of public meetings would be scheduled to discuss the issue before people vote.
Officials said 20 Vermont municipalities currently charge a local options tax, including Manchester, Wilmington and Brattleboro.
Contact Tiffany Tan at email@example.com, @tiffgtan on Twitter or 802-447-7567 ext. 122.
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