Much has appeared in recent editions of The Valley Reporter about the success of other Vermont towns with their local option tax (LOT) programs. I use the word “success” because in every instance it has been a success.
Members of the Mad River Valley local option tax subcommittee and other volunteers have recently spoken directly to officials in almost all of the 21 towns and cities in Vermont that have implemented a local option tax since its inception in 1999. In every instance, these officials describe it as a success, with no negative consequences. Local option taxes have allowed municipalities to do things that otherwise would have been impossible because of lack of funds.
They describe skating rinks, critical infrastructure improvements, recreation facilities, lower debt service obligations and more – all financed through a local option tax. The Mad River Valley Planning District has studied our needs for almost 30 years. The needs are clear, as well as the lack of forward progress – there is no money.
In almost every conversation, these officials have asked, “What are you waiting for? It’s a no-brainer.” And given that only 12 percent of the tax revenue would come from the resident population at an estimated rate of about $2 a month, I have to ask myself that same question.
Also, the word “success” begs the question about Killington – they repealed their local option sales tax, didn’t they?
The answer is simple: Yes. It was repealed because they came up with a better solution unique to their circumstances.
The town of Killington has a population of a little more than 900 people. The bulk of the local option sales tax revenue was generated by sales at the Killington resort. The resort reasoned that rather than collect this tax, 30 percent of which went to the state by statute, why not fund the events and projects funded by that LOT and pay the remainder to the town, keeping the revenue amount whole. This accomplished two things: the elimination of a 30 percent payment to the state and the elimination of a 1 percent tax the resort would have to pay on major capital improvements that were planned. As a result, the local option sales tax was formally repealed and the replacement program has been a win-win for the resort and the town. Killington’s LOT on sales was not a failure but a springboard to a better plan for them, and the LOT on rooms, meals and alcohol continues.
Concerns have been also raised about the effect of this proposal on those with little financial means. As noted above, the individual residential impact will be small. Should this be a financial burden for some, there are resources in The Valley to provide that safety net. It is always good to be mindful of the less fortunate in our community and the effect a new initiative might have. However, it is time to put concerns about this potential impact of the proposed LOT to bed.
The other question I hear comes in two parts: What will this money be used for and how will the funds be administered?
Similar to uses in some of the other towns, extensive study has shown that the funds would be effectively used in the areas of recreational enhancement, transportation, promotion of the Mad River Valley to potential visitors, accessible housing and projects that enhance the MRV as a whole.
Here are examples of how LOT funds could have been used had the program already been operational:
- This year, the recreation district is asking each member town to up their contribution from $15,000 to $30,000 in the three upcoming town budgets for total of $90,000.
- Costs of current housing and transportation work done by the MRVPD, $40,000, could have been covered by the LOT.
- The three Valley towns are anticipated to see a request of $20,000 from each town – a total of $60,000 in contributions – starting next year, to help fund the Mad Bus service.
That already amounts to $190,000 where LOT funds could be put to use. This would leave an additional estimated $510,000 in LOT funds available for additional recreational district funding, promotion and, most importantly, projects focused on accessible housing guided by the outcome of the soon-to-be completed and released housing demand study.
The funds are to be administered in a fully transparent manner by a six-person LOT commission composed of select board–appointed members from each town, and a chair appointed by the Mad River Valley Planning District. Each amount awarded by the commission through a grant application process would require follow-up reporting and accountability.
Thoughtful recommendations have been made over the past 30 years, but a lack of investment resources have stymied progress. A local option tax is a low-cost, sustainable way to realize the collective vision of Valley citizens and advance the Valley community’s economic interests, vitality and sustainability.
Going forward, part of the process will include another change to Waitsfield’s town charter to align their ability to participate with Fayston and Warren in this proposal. I encourage Waitsfield voters to turn out and vote for the change.
A tri-town local option tax will be the first in the state, reflecting the unique community leadership that has characterized our Valley towns and the Mad River Valley Planning District concept from the beginning.
Let’s move forward – there is no downside.
Mazer lives in Waitsfield, Vermont and serves on the Waitsfield Select Board.