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Legislature Provides Some Flood Aid To Cities and Towns; Will There Be More Coming?

Photo by Bob Fitch, Courtesy of Montpelier Alive.
Two months after returning to Montpelier, Vermont legislators have passed one bill providing tax help to flood-ravaged communities and are on the verge of passing another — the Budget Adjustment Act (BAA), also known as H.839 — that will provide funding to these municipalities.

The BAA would make available $825,000 in economic damage grants to Montpelier and perhaps as much as $1,075,000 to Barre. A total of $6.25 million in such grant money is included in the bill, with the size of grants dependent on the degree of damage. The funds cannot be spent on FEMA-related projects, according to the language of the BAA legislation.

A conference committee between the House and Senate negotiated the final details of the BAA. That version has passed the Senate and is due to be voted on in the House on Friday. Gov. Phil Scott has indicated he will likely sign the bill.

Rep. Conor Casey (D-Montpelier) said that getting funding from the state has been “a heavy lift,” but he called the BAA a “good win.” Casey added, “We’re just getting started.”

Among other things, Casey is hoping for additional funding for flood mitigation and to secure the $2 million needed to raise the foundation of 10 badly flooded buildings that have 18 housing units in Montpelier.

On Feb. 8, Gov. Scott signed a different bill — S.160 — that reimburses municipalities for education property tax payments of properties that have received tax abatements. The law is expected to cost the Education Fund $1.1 million.

When abatements are granted, municipalities not only lose municipal taxes but have to make up education tax payments to the state. After Hurricane Irene, education taxes for abated properties were forgiven, and this bill does the same things for cities and towns hit by the July flood.

According to Montpelier City Clerk John Odom, the city has had requests for 23 flood-related tax abatements, and five more for other reasons. The Board of Abatement has held hearings on all of the requests except Capital Plaza Hotel, he said.

Not counting the hotel, the city is looking at potential lost municipal tax revenue for the abatements of $65,000, Odom said. The hotel’s request could roughly double that. The hotel has not been paying its taxes and has accumulated late fees, but those could be forgiven if its taxes are abated for the first three quarters of the year or so, he said. The hotel is scheduled to reopen in April.

S.160 provides the education tax relief to qualifying cities and towns for flooded properties that meet one more of the following requirements: a 50% or more loss in value of the primary structure; loss of use of the structure for 60 days or more; loss of utilities for 60 days or more; or an official condemnation of the structure on the property. The Montpelier Board of Abatement has been following these guidelines, Odom said.

The law also changes the definition of household income for purposes of the homestead property tax credit to exclude all disaster relief payments.