The Waitsfield Select Board finalized Australian ballot language asking voters to approve a 1% local option tax (LOT) applied to all three categories allowed under state law: sales, meals and alcohol, and rooms. That will come before voters at Town Meeting on March 3.
The decision means voters will see one consolidated question on the ballot rather than separate questions for each tax category. Voters will also asked — by voice vote from the floor of Town Meeting — to decide how the revenue from the tax would be spent.
CATEGORIES
Article 6 of the Town Meeting warning identifies these spending categories for LOT funds:
- 35% to the Bridge & Culvert Reserve Fund;
- 20% to the Paving Reserve Fund;
- 15% to the All Hazards Recovery Reserve Fund;
- 15% to the Waitsfield-Fayston Fire Department Building Reserve Fund;
- 15% to the Road Department Facilities Reserve Fund.
Based on updated data from the Mad River Valley Planning District, a one percent Local Option Tax (LOT) in Waitsfield is estimated to raise approximately $550,000 to $600,000 annually. The tax, covering rooms, meals, alcohol, and retail, is expected to collect the majority of revenue from visitors, with projections indicating it could generate roughly $400,000 in the first partial year, which would be this fiscal year.
At a January 26 select board meeting, town administrator York Haverkamp said the Australian ballot question would focus solely on whether the town should adopt the tax, while the allocation of funds would be addressed separately at the floor of Town Meeting on March 3.
ONE PERCENT
“Technically, this is just the adoption of the tax,” Haverkamp said, explaining that the spending purpose would appear as a Town Meeting agenda item rather than part of the ballot language.
The local option tax, authorized under Vermont statute, allows municipalities to levy up to a 1% tax on sales, meals and alcohol, and rooms, in addition to existing state taxes. Communities that adopt the tax retain the local portion of the revenue.
Select board chair Brian Shupe said he supported including all three categories in a single question and explicitly stating the intended use of funds.
BIG CAPITAL NEEDS
“I don’t want to just have it be open-ended,” Shupe said. “I think we want to tell them that we have big capital needs, and this is our revenue source to help pay for it.”
The draft language includes a reference to funding capital reserves and debt service, reflecting anticipated expenses such as a new fire station, a town garage and major bridge repairs.
Select Board member Chach Curtis said he strongly favored limiting the use of funds in the ballot language.
Select Board member David Babbott-Klein said he reviewed ballot language used by other Vermont towns that have adopted local option taxes in recent years and found that most chose to approve all allowable categories at once.
SEPARATE VOTES
“All of the towns that have done it in the past three or four years have done it as one,” Babbott-Klein said. “Many of them did include a purpose, and I’m very comfortable with this level of commitment and restriction.”
Select Board member Fred Messer raised concerns, noting that the board had previously discussed holding separate votes on each tax category.
“Last week, we took a vote, and we were going to have three articles,” Messer said. “What happened?”
CONSOLIDATED
Shupe said that was not his understanding of the earlier motion.
“You suggested it be three,” Shupe said, “but I didn’t think that was an agreed-upon part of the motion. I feel as though it should be consolidated.”
Shupe also argued that applying the tax broadly avoids fairness issues.
“It’s kind of an equity issue,” he said. “We’re going to tax taxable sales. Let’s just do it and not pick and choose winners and losers.”
Messer objected particularly to the sales tax component, saying it should be described as a “retail sales” tax to improve clarity.
STATUTORY ISSUE
Babbott-Klein responded that the wording must match state statute.
“It’s a statutory issue,” he said. “The local option tax statute says a 1% sales tax, a 1% meals and alcohol tax, and a 1% rooms tax. That’s why I wrote them exactly as they appear in the statute.”
Curtis added that defining it differently could create legal complications, especially for online purchases.
“You want to connect it specifically to the state’s sales tax,” Babbott-Klein said. “That’s what’s being added on to.”
Supporters of the tax emphasized that much of the revenue would come from nonresidents. Curtis cited a regional planning study estimating that roughly 82% of local option tax revenue would be paid by visitors and out-of-town consumers.
BRUTAL
“The point you’ve heard us all make is, how are we going to pay for a fire station, a town garage, bridge repairs,” Curtis said. “If we put that on the property taxpayer, it’s brutal.”
Messer countered that Waitsfield already generates substantial tax revenue but does not retain most of it.
“We take in a lot of taxes,” he said. “The problem is we send 80% of it to Montpelier.”
Curtis said the local option tax is one of the few mechanisms the Legislature allows towns to keep revenue locally.
“This is the one way we have to keep some of that revenue,” he said.
The discussion also touched on whether the tax would apply to online purchases shipped into town. Babbott-Klein said that under state rules, the tax would be based on the delivery location’s ZIP code.
Following the discussion, Curtis made a motion to approve the ballot article as drafted.
The motion was seconded and approved by the board.
