Joined by legislative leaders and the Vermont League of Cities and Towns, Gov. Peter Shumlin today announced a plan of action to enable towns to abate education taxes for property owners hard-hit by Tropical Storm Irene and spring flooding.
The plan will authorize the Tax Department to set up procedures to reimburse towns for such extraordinary abatements.
The plan will require legislative approval when lawmakers return to Montpelier in January. Recognizing that taxpayers who have lost use of their property may petition their local boards of abatement for tax relief even before then, however, Gov. Shumlin and legislators have agreed on a plan that will guide localities as they consider these requests.
"Clearly many Vermont homeowners have been severely impacted by Tropical Storm Irene, and will be turning to their local towns to abate their taxes given the damage done to their properties," Gov. Shumlin said. "Our plan will allow towns to pass along that assistance to property taxpayers, whose loss was extraordinary, without having to take a significant financial hit themselves."
Governor Shumlin was joined by legislative leaders who have worked collaboratively with the administration on the plan and pledged to pass the relevant legislation in the upcoming session. "The legislature stands committed to helping those affected by natural disasters this year," said Speaker Shap Smith. "This bill will take a heavy burden off those hardest hit by the storms of this spring and summer. I anticipate its swift passage when the legislature reconvenes in January."
"This is one step in our attempt to minimize the loss sustained by individuals and towns," added Senate President Pro Tem John Campbell.
Municipal officials in communities hit by the storm have been voicing concern about the number of abatement requests either received or anticipated, and worries those abatements might force towns to reduce services or take other harmful steps to live within their annual budgets. The Vermont League of Cities and Towns worked with the Administration and lawmakers to develop the bill. Executive Director Steve Jeffrey stated, "While abatements remain a local decision, we have a statewide property tax. This measure will spread some of the cost of abatements across the state, giving towns the tools to grant relief to the hardest hit property owners."
Mary Peterson, Commissioner of the Vermont Department of Taxes, immediately announced the procedures that the Department will adopt in order to provide clarity and consistency for taxpayers and localities. Reimbursement of abated education taxes will be approved when the local Boards of Abatements make four findings:
* The property damage was due to a 2011 federal declared disaster;
* Municipal and educations taxes are proportionately reduced;
* The primary structure on the property suffered at least a 50 percent value loss; and
* The property owner lost use of the primary structure for at least 90 days
The reimbursement will only cover the taxes for the portion of the year during which the use of the property was lost. The state anticipates the reimbursed abatements will total about $2 - 4 million, money that will come from the Education Fund.
The Tax Department will provide information and forms to local communities who might want to participate.