Select Board agrees on option tax policy
BENNINGTON — As it prepares for a public hearing on instituting a 1 percent local option tax in Bennington, the Select Board resolved this week to create a policy of annually reviewing spending priorities for the revenue and allowing public input.
The board didn't vote Monday on a policy, pending a hearing Feb. 17 on the town ballot question, but it is expected to develop policy wording to review at subsequent meetings.
Chairman Donald Campbell said the board has received "a wide range of responses from the community," and more are expected during the hearing.
Referring to prior suggestions and the experiences of other communities that have adopted the tax, Campbell proposed a formal policy of holding two hearing during the annual town budget season and then voting on how the revenue should be allocated that year.
The board has placed the tax issue on the warrant in four questions, asking whether voters approve adding a 1 percent tax to state sales taxes on retail sales, rooms, meals and/or alcohol purchases.
Under the state's Local Option Tax program, the extra 1 percent tax is collected with the rest of the state sales tax revenue, and 70 percent of the additional revenue is returned to the town. In addition, 30 percent goes to the state's PILOT (Payment In Lieu Of Taxes) program for communities, like Bennington, that host state property not subject to local property taxes.
Campbell noted that opinions from residents and officials have ranged from total opposition to the tax to having it allocated almost entirely to reducing the local property tax burden, to spending most of the revenue on promotional marketing of Bennington, or on projects or large purchases that would benefit the town.
Estimates based on state tax figures from last year indicate the town could realize in the vicinity of $1.27 million if the 1 percent is collected on all four tax categories, with the retail sales tax bringing in the lion's share of the total.
Board member Jeannie Jenkins said she favors such a board policy as long as the decision and wording are finalized this year after the upcoming public hearing. She and others suggested that town staff prepare draft language for a policy for consideration next week.
Town Manager Stuart Hurd and town staff prepared a suggested list for the board, offering a possible percentage breakdown of where the revenue could go if the tax is approved.
That include using 50 percent to reduce property taxes, 10 percent to market the town, 20 percent to reduce debt on which the town is paying interest, and 10 percent toward refurbishing the community park at Willow Park.
Campbell said those suggestions would be a good starting point for the discussion.
Jeanne Conner asked that more data on the experiences of other communities with the option tax be made available for the hearing. Other towns in this area include Wilmington, Brattleboro, Manchester and Rutland Town.
Two opponents of the property tax, Select Board candidate Colleen Harrington and her boyfriend Kevin Hoyt, spoke against the idea Monday.
Harrington said the town can't afford another tax at this time. She also asked for additional information prior to the vote on the impacts of such a tax on individuals and businesses.
Hoyt said the tax burden already is too high, adding that even if all of the revenue from an option tax was earmarked toward property tax relief, that still might not offset the proposed 3.4 percent tax rate increase in the budget on the annual town warrant.
The hearing on the option tax proposal is set for 6 p.m. Monday at the Bennington Fire Facility.
Additional information is posted on the town's website.
Jim Therrien writes for New England Newspapers in Southern Vermont, including the Bennington Banner, Brattleboro Reformer and Manchester Journal. Twitter: @BB_therrien
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