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The Property Tax Man Cometh!

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by Nat Frothingham

MONTPELIER — The municipal budget that will be presented to Montpelier residents at Town Meeting Day on Tuesday, March 1 comes in two parts. There is the municipal FY 2017 proposed budget and the proposed school FY 2017 budget. Both budgets are combined on a resident’s property tax bill. But each of these budgets is voted on separately on Town Meeting Day.

At press time for this issue of The Bridge (January 6) both city and school budgets are currently under review and public discussion with possible changes for each.

Proposed Municipal Budget

Referring to the city manager’s budget proposal that was published on page 7 of the December 17 issue of The Bridge, Sandra Gallup, finance director said, “I can’t tell you that anything has changed yet.” But she allowed that changes to the manager’s proposed budget could be introduced at the February 6 meeting or at a second public hearing on Thursday evening, January 21.

As published in The Bridge, the city manager’s proposed budget calls for a 1.8 percent property tax increase in FY 2017. Last year’s property tax increase was 2.4 percent.

The 1.8 percent tax increase for FY 2017 translates into an additional $41.36 on the tax bill for an average residential property (valued at $228,000).

Proposed Montpelier Public Schools Budget

Also, on January 6, Montpelier Public Schools Superintendent Dr. Brian Ricca was in touch by phone to discuss the school board of commissioner’s current budget proposal.

He emphasized at least two or three times that the budget proposal he is discussing could change because of actions by the Legislature and budget numbers that are subject to change.

Both the school board and the school administration have had several meetings already where the voting public has been invited to discuss the proposed budget.

The first budget presentation was December 16 and “was fairly well attended,” said Ricca. There is to be another budget meeting just after press time on January 6. And if changes are still indicated after January 6, there will be a final public meeting on Wednesday evening January 20, the day before the school system presents its final budget figures to the City Council.

Ricca commented on a number of figures from the school budget summary. These figures influence the final property tax estimates that are being offered for the FY 2017 proposed budget.

According to current estimates, in FY 2017 the State of Vermont will contribute a base education amount of $9,955 per equalized student. Again, this number could change.

On the “bad news is good news” front, Montpelier’s common level of appraisal is showing a slight decline to 95.3 percent. The bad news is that residents will pay more in property taxes because our property values are somewhat higher than other property values across the state. The good news has to do with the comparative strength, that is, the competitiveness of the  local housing market.

The total budget change for educational spending in the proposed FY 2017 budget is up by 2.31 percent over the FY 2016 budget and education spending per pupil is up 4.17 percent. Ricca said that Montpelier taxpayers would not be penalized tax wise because that 4.17 percent rise in per pupil spending does not trigger the state’s “double tax” penalty.

For taxpayers wanting to save money he noted that because enrollments have experienced a modest growth (enrollments in the district were 992 students in FY 2016 and are projected to be 1027 students in FY 2017, taxpayers in Montpelier will see more money contributed by the State of Vermont as part of the FY 2017 budget. “That’s good news,” said Ricca. “Growth (in student numbers) is good.”

When all the numbers and measures are combined, taxpayers will be paying less for schools in FY 2017 than they paid in FY 2016. Thus, if you owned a house valued at $100,000, in FY 2016 you are paying $1,603 for the school portion of your property taxes. But in FY 2017, you are projected to be paying $1577. The logic continues for a house valued at $200,000: $3,205 last year and $3,153 for the year ahead; or for a house valued at $300,000 $4808 in FY 16 and $4,730 in FY 2017.

What’s not to like about a cut on the school side of your property tax bill?

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