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Montpelier Budget Brings 7.6% Property Tax Increase if Voters Approve it in March

large granite building with tree in front and tower on top. Gray sky in background.
Montpelier City Hall. Photo by Carla Occaso
It took two meetings last week for Montpelier’s City Council to approve a $11,495,881 FY24 city budget and finalize the warning for the March 7, 2023 ballot. Confusion over public information regarding meeting dates, motions, and corrections of documents slowed the process. 

This budget represents a 7.6% property tax rate, equaling a $1.35 city tax rate per $100.00 assessed value, and amounting to a 3.9% total increase over last year. In FY24, city residents will pay a combined average of $7,271 for schools, sewer and water, and city services, said city manager Bill Fraser.

Given inflation, “That’s actually really good,” Fraser opined, adding that in 2021, 65% of Montpelier homesteads received an average state education property tax credit of $1,566. Another 16% received state municipal property tax credits, averaging $1,200 each. Average renter rebates of $766 were received by 206 Montpelier taxpayers, he said. However, those income protected totals may fall this year. 

In addition to the city budget, the Montpelier Roxbury Public Schools budget is also on the March ballot, at $28.6 million; a $1.70 residential tax rate, and a 1.3% tax increase over last year for Montpelier residents. It also represents a 9.59% tax decrease for Roxbury residents.

Fraser told councilors that despite the property tax increase, the Capital Investment Plan funding is level-funded at $2.149 million, about $250,000 below goal. A concrete impact of this is that street paving will be “drastically reduced,” he said. 

Although the council reviewed a city survey showing that 52% of the 268 respondents said they do not support increasing revenues through increased taxes and fees, and after hearing from members of the public asking them to reduce the property tax burden in Montpelier, councilors increased taxes twice during the budget approval process.

In addition, the council continued to support, at last estimate, the more than $2 million Confluence Park project concept, in part through $600,000 in bond funding.

When asked why not decrease the bond total by the amount allocated to Confluence Park in order to reduce the property tax burden, Fraser responded ”that of course would be up to the council. The fact is we could do that.” 

Asked if the council is “comfortable with the property tax burden” Jack McCllough responded “that $600,000, none of the money that’s in that bond goes on to anyone’s property taxes until we vote to expend the money and draw down the bond.” The council has not made a final decision on the Confluence Park project. Lauren Hierl, who is running for re-election in District 2, stated that she supports the project. 

Local Options Tax

Local businesses showed up to protest a proposed “local option tax.” Councilors decided not to vote on a charter change proposed by Fraser, which would have allowed for a local option tax (LOT). Fraser estimated the new tax could raise $493,000 in revenue in the future had it been approved; about 4% of the current proposed property taxes. 

Fraser told councilors that Montpelier has gone from a tax base of 53.6% residential and 30% commercial (in 1985), to today’s 68.6% residential and 25% commercial base. Peter Kelman suggested this could be an indication that local businesses have struggled and property owners have a high tax burden. Montpelier has also had a 2% population decline while the other towns in the area have grown, according to Fraser.

Montpelier Alive interim director Katie Trautz said 77% of downtown businesses opposed the local option tax, due to logistical issues, increased credit card fees, and slow business recovery from COVID, plus the resulting increased reliance on on-line shopping for all types of goods. Another concern expressed was that revenue from the tax be used towards infrastructure needs. Business owners objected to Fraser’s pitch that a LOT would make outsiders pay for the services they use when shopping in town as the primary means to redress the increased property tax burden on homeowners. 

Lauren Andrews of AroMed Essentials reminded the council that businesses pay increased rents on the commercial property they use. Businesses contribute to the increase in real estate values in Montpelier, she said, because they contribute to a vibrant community.

Preparing for Town Meeting Day

The council discussed and adopted a Nineteen Article City Meeting Warning for March 7, 2023. 

Absentee ballots must be requested this year. The ballot will be available and mailed out starting the second week of February. The City Voter Guide contains information regarding candidates, ballot items, and requesting an absentee ballot.