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Local town clerks receive state funds for income sensitivity/tax refunds

 

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07/06/2007

By Lisa Loomis

Sums of money ranging from $237,000 to $566,000 were deposited into the bank accounts of local town clerks and listers this week. The money comes from the Vermont Department of Taxation. It replaces what used to be checks sent to local property tax payers for income sensitivity under Vermont's education funding program.

Adopted two years ago but implemented this year for the first time, the program provides local towns with the money that would have been sent to individuals. Local clerks apply those funds to individual property owners' tax bills.

When tax bills are sent out there will a total tax liability for the property, then a line showing reduction for state income sensitivity payments and/or the application of state income tax refunds to property tax bills. The bottom line will be what is due from the taxpayer.

Town clerks in Valley towns are less than enthusiastic about this new program for several reasons. First, it's only going to be in effect for one year. Next year, the towns will not receive the money, just a credit from the state on the total amount of money each town pays to the state for the statewide education property tax.

Secondly, town clerks, and others, have concerns about how this system will affect the privacy of individual taxpayers' personal financial income, including household income. All of the documents relating to the individual parts of this tax bill are public record. That means that if the state credit or income sensitivity payment is a result of application of income tax refunds to the bill, it will not be possible to create the mathematical equation to determine the household income. In other cases, it may be easier.

Finally, some town clerks find it offensive that the state would not allow taxpayers who are due a prebate to receive their check and make their own determinations about what to do with the money.

In Waitsfield this week, town clerk Jennifer Peterson received a deposit of $566,290.85 from the state, which will be applied to the tax bills of 316 taxpayers. She said she expects tax bills to go out by the end of July.

In Fayston, town clerk Ginny Vasseur was still waiting to hear how much money the state had deposited in town accounts and how many taxpayers it would be intended for. She said that she had concerns about the fact that the tax bills, which are public, will show clearly the totals of money for people who applied income tax refunds to their property tax bills (and the amount of their refunds) or received income sensitivity (and the amount of that sum).

Duxbury town clerk Ken Scott said he finds it insulting that lawmakers would presume that adult taxpayers can't determine themselves how to disperse income sensitivity funds or what used to be prebate checks. Duxbury received $237,204 but has not received word as to how many taxpayers will receive those funds. Scott noted that Duxbury has only about 450 residential parcels.

"It outrages me that the legislature feels we adults aren't smart enough to determine, as grown-ups, how to manage our finances and spend our money. This is about the dumbest thing the legislature has ever done. I talked to our Representative Robert Dostis about it, and he just doesn't get it," Scott said.

State Representative Carol Hosford, who serves Warren, Waitsfield and Fayston, was contacted by email about the program and asked about her vote.

"I, too, was concerned about people's privacy regarding their property tax bills. However, after speaking with several legislators who had worked on this initiative, and who had studied the issue of privacy, I decided to vote for it. On a person's tax bill, it will say how much your tax is, then under it will be a line called 'credit.' A person can apply any refunds to this line, such as income sensitivity, rebates, or withholding. No one seeing
your bill can tell which variants made up the 'credit' line. I believe that the system of receiving a check that you were supposed to apply toward a tax bill that wouldn't arrive until some weeks later was confusing and expensive to administer. I expect the new system, in which the income sensitized taxpayer will pay what he/she actually owes, to be an improvement," Hosford wrote in her email response.

Representatives Maxine Grad and Anne Donahue, who represent Moretown, Roxbury and Northfield, did not respond to email on this issue.

Duxbury town clerk Scott also noted that the system of the state issuing payments to the towns this year, and crediting the towns next year, creates havoc at banks where many mortgage holders have their property taxes escrowed.

In Warren, town clerk Rita Goss said the state had deposited $559,449.47 into Warren's bank account, but she did not yet know how many taxpayers would be receiving credit for a portion of that money. Figures for Moretown were not available by press time, although town clerk Susan Goodyear, contacted earlier in the week, said she was no fan of this system which potentially exposed peoples' private financial information to the public.


Contact Lisa Loomis at This email address is being protected from spambots. You need JavaScript enabled to view it.

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