Vermont Legislature SmartTranscripts:

[Emilie Kornheiser (Chair)]: Here we are with me. Hello. Nice to see

[Bridget Burkhardt (Clerk)]: you all again. I think this is the second time we've gathered today. It is

[Emilie Kornheiser (Chair)]: 02:10PM, and we are here with Tim Devlin to talk about H-nine 54. We're going to go through the charter, and then I am offering an amendment to it that I think Damian will think us through, that's

[James Masland (Member)]: why he's is that true? I can Okay. However it works.

[Emilie Kornheiser (Chair)]: So anyway, over to you, Tim.

[Mark Higley (Member)]: Thank you very much. I'm the committee members. For the record, my name

[Timothy Devlin (Legislative Counsel)]: is Tim Bethlen, legislative counsel. And if it's all right with the committee members, I think I'll just work off of the amendment because there's only one section of substance that the Charter change addresses, and the amendment will be examining that. So here we have Charter change proposal to the town of Stowe adding in a provision specific for local option taxes. Now there are general provisions in Title 24 where we have what's for municipal law, that is general municipal law housed, and this is kind of building off of statute that exists elsewhere. So just to orient ourselves, we're in the 24 appendices, particular one, chapter 153 for the Founders Stowe, we're adding a new section nine zero four to be titled Local Option Tax. A, the selector is authorized to impose a 2% local option tax on sales, groomed, meals, now followed beverages. A tax imposed pursuant to the section shall be collected and administered by the Department of Taxes pursuant to 24 P. S. A. 138. Let's pause the note here. I'm sure you already know this is a recent history, it was just in the go last year, where uniform local opt in tax is 1%, up to, since the deviation in that sense. Subsection B here reads, Notwithstanding any contrary provision to Title 24 VSA 138, and the reference here, this is what deportions the local options tax to that 25 of those states, 75% being detained, essentially retained. It goes back to public health municipality. And then 32 VSA 3,709, and that's just a reference to the private special fund that local option tax revenues are paid into. So notwithstanding any contrary provisions to those two statutes, say, of any local property tax collected in excess of 1%, remember cap being 50% shall be paid to the local municipal transportation special fund established pursuant to 19 BSA, 306B, and the other 50% shall be paid to the town. So the first percent will be apportioned regularly, that is 25% the state, 75 local. And then beyond that, so between that 12% possibility, that will be apportioned 50% to the local option municipal fund, special fund, and 50% back to the town. And then we have subsection three reading, the local option tax outlined by the section supersedes any local option tax previously adopted and approved by the town. And just so these reference, section B is what is new here. Should be starting with our apologies. STOW brought forward A and C and this will zero. Okay.

[Mark Higley (Member)]: So, you go back to the paragraph, section one, the General Assembly approves the amendment to the charter. Select board is authorized to impose a 2% multiple option tax. Is that confusing? Because we're authorizing one more percent.

[Timothy Devlin (Legislative Counsel)]: Right. So all other municipalities have the option of going to 1%. This would be particular to just the town of Stone, where they could raise it to 2% if they want. So whether it's I

[Mark Higley (Member)]: don't know if I can

[Timothy Devlin (Legislative Counsel)]: apply to whether it's Could this be

[Mark Higley (Member)]: could this be misconstrue? I think there's 2% on top of the board.

[Timothy Devlin (Legislative Counsel)]: Oh, I see. Say it's a local option tax, it doesn't save an additional 2%. I think it'd be read since the local option tax is going to place with a maximum of up to 2%.

[Emilie Kornheiser (Chair)]: Any

[Bridget Burkhardt (Clerk)]: other questions? Yes?

[William Canfield (Vice Chair)]: Yeah, maybe following your questions, If they enact the passage of 2%, I presume that they could roll it back if they get a petition and decide who act on it and decide they know on. Yes, it's to the I want to make that clear.

[Mark Higley (Member)]: Representative Higley? So, yeah, I'm confused as to is this new B, the amendment? Yes, it is. Okay, so I guess I'll have to go back to Representative Canfield's question. I mean, I can see, you know, the select board is authorized to impose a 2% local option tax. Then B clarifies that the local option tax authorized by the SEC supersedes any local office tax previously adopted. Why don't we still need that to make sure that what we're being of Canfield's concern is being addressed? The original B which now reads C in the amendment, there were

[Timothy Devlin (Legislative Counsel)]: a Board of Option Tax authorized by section sixes of the Board

[Mark Higley (Member)]: of Law and Tax through the state's act the proposed ballot. I'm sorry, Tim, I didn't see the C. One final question, though, is Section B now, was the town aware of that particular option for the money?

[Emilie Kornheiser (Chair)]: I am honestly not positive. I know that this is something that Senator Westman has been talking about for a while, and he's the senator that represents Stowe, but I'm not sure.

[Mark Higley (Member)]: Think does he even represent Stowe anymore? He used to represent Stowe.

[Emilie Kornheiser (Chair)]: No. No, he doesn't, right? Washington County Center, which represents Stowe. Yeah. Oh. He represented Stowe for a

[Mark Higley (Member)]: long time

[Emilie Kornheiser (Chair)]: and lives right next to Stowe. Representative Branagan.

[Bridget Burkhardt (Clerk)]: You clarify for me again that

[Carolyn Branagan (Member)]: first penny goes where and the second penny goes where? I think I've got the first one right. The 25% of what's collected under that first penny to the state and 75% to the town. So now we're on to penny number 250% of that one goes to the town. And where is that other than 50% going?

[Timothy Devlin (Legislative Counsel)]: The local option municipal transportation special fund.

[Carolyn Branagan (Member)]: All of it goes there?

[Timothy Devlin (Legislative Counsel)]: Of the second penny? Half

[Carolyn Branagan (Member)]: of the second penny? Sure. Is that a state fund or a local town fund?

[Timothy Devlin (Legislative Counsel)]: It's a state fund and

[Ted [Unknown] (invited witness)]: So

[Damien Leonard (Legislative Counsel)]: it's being created Who are you? Sorry, the director of the David Leonard from the Office of Legislative Council. So

[Ted [Unknown] (invited witness)]: this is

[Damien Leonard (Legislative Counsel)]: the reason why I don't care. This is language that was in the senate's T bill proposal that was then moved to the senate's big bill proposal. So that 19 GSA three zero six is being potentially created in the big government. So that it's a new state special fund. The proceeds from that fund are divvied up across all towns for general state aid for highways as an additional amount on top of the standard formula that goes out to towns now. So it takes a little bit of the, I'm assuming it passes in the conference committee report on the budget, takes a little bit of the excess revenues on local option taxes after you've made all your pilot payments and other payments out of there. And then also take money from this and then it splits it up across the various towns to provide a small bump to the general state aid they get, which is the most flexible form of town by way we give. Basically allows towns to take that money and use it for any purpose instead of just culverts or just bridges or things like that.

[Carolyn Branagan (Member)]: Do you know if this money's already been allocated, appropriated, or is it

[Emilie Kornheiser (Chair)]: still So we're gonna We'll hear from Ted about how the money is divided up. But what I The In offering the amendment, the idea is that the transportation fund is struggling. We know that. The more money we can free up through other means for town highway aid, the more can be going to state highways in the actual T bill. I understand that.

[Carolyn Branagan (Member)]: I just want to know if the money has already been allocated out

[Emilie Kornheiser (Chair)]: there somewhere and somebody's counting on it. It has not yet because this has a long way to go.

[Damien Leonard (Legislative Counsel)]: Yes, there's no market to fund right now. So the fund doesn't exist yet,

[Ted [Unknown] (invited witness)]: so it's

[Damien Leonard (Legislative Counsel)]: being set up for the future and then as revenues come in that money could then be allocated in future years for these purposes. Thank you.

[Mark Higley (Member)]: Why Emily setting up this special fund where we can just put in it

[Edward "Teddy" Waszazak (Member)]: for three years about that the money that goes through to this fund would only be sent back to towns and have multiple options.

[Damien Leonard (Legislative Counsel)]: Yeah, so the general state aid for town highways, state aid for town structures and for class two rooms. So there's three different streams you can go out on. That money all typically comes out of the transportation fund. If you put it in the transportation fund it can go anywhere. This is setting up a dedicated special fund that has to go back to towns. Any town. So it's not just for local option tax towns, this gets split up among all towns. Towns So with local option taxes get a portion of the revenue from the local option tax, rest goes back to the state. The senate construct, and again I'm not advocating for this, but the senate construct basically says we want to take a portion of that money that comes in after we've made pilot payments and so forth and put that towards all municipalities and senate transportation because their focus is transportation, their focus is on tapping with municipal roads which has been a long standing issue. Typically the state aid has been a small line item that hasn't grown very fast. As many of you are probably familiar with, municipalities are falling behind and so this is intended to help close that gap. It's going to take a lot to close those weekends gaps, but this is intended to provide dedicated funding that can go to all towns, not just towns that can support local option tenants.

[Emilie Kornheiser (Chair)]: Any other questions?

[Charles Kimbell (Ranking Member)]: Only one. The current charter for Stowe, does it say basically up to 1%? The same construct is true that the select board can oppose a 1% local option tax?

[Timothy Devlin (Legislative Counsel)]: See, I don't think there actually is a local option provision in Stowe's charter. There's one general law on

[Mark Higley (Member)]: the 24 of them.

[Charles Kimbell (Ranking Member)]: Okay, so it's not specific to their charter at this point. Correct.

[Timothy Devlin (Legislative Counsel)]: Let's see.

[Charles Kimbell (Ranking Member)]: So they're just taking a bit

[James Masland (Member)]: It's really it's

[Emilie Kornheiser (Chair)]: still I feel like Stowe got a local option long before we let anyone get a local option.

[Charles Kimbell (Ranking Member)]: Right? I believe by the way from Acts 60

[Emilie Kornheiser (Chair)]: Oh, they were pre-

[Bridget Burkhardt (Clerk)]: Yeah, they were pre- They were first in the door of Photo Acts. There

[Mark Higley (Member)]: is. Is there a reason we don't have this version online? If you refresh it, I'll show them.

[Emilie Kornheiser (Chair)]: That's why you're not fresh enough. Please

[Mark Higley (Member)]: don't encourage it.

[Charles Kimbell (Ranking Member)]: Just wondering, do any other towns have this in their I know Burlington and Rutland do, but no other towns have where the select board can do it. Is that true or not?

[Timothy Devlin (Legislative Counsel)]: Under general law, let's see here, under title 24 BSA section 138, the legislative body, and let me just actually support this along. I'm just trying to figure

[Charles Kimbell (Ranking Member)]: out the mechanics of it.

[Timothy Devlin (Legislative Counsel)]: So here we go. Good. Okay. So if a municipality's legislative body by majority vote recommends, the voters in municipality may, at an annual or special meeting work for that purpose, by majority vote, those present in voting, assess any or all of the following: 1% sales tax, meals and beverages, 1% on greens tax.

[Emilie Kornheiser (Chair)]: Representative Higley.

[Mark Higley (Member)]: If you approve this, does it have to go back to collapse?

[Emilie Kornheiser (Chair)]: I mean, not go back, but they have to drop all their amendments. Okay, thank you. Ted? Tell us about what labs and boxes. Email this one of your ticket box.

[Mark Higley (Member)]: Probably what I'd spend the best time talking about.

[Emilie Kornheiser (Chair)]: Thank you. Okay.

[Ted [Unknown] (invited witness)]: Sabrina, only physical office. So there are two levels of detail I can go into. One is considering how the full picture of the local option municipal transportation special fund would receive revenue, including both the structure with the pilot special fund that's in the Senate's proposal for the budget and also the amendment currently for September. Madam Chair, would you like me to go kind of line by line through this document that shows both, or would you like to just consider the committee's amendment?

[Emilie Kornheiser (Chair)]: I think just the committee's amendment.

[Ted [Unknown] (invited witness)]: Okay. Yes. Then in that case, we can cut straight to the chase.

[Emilie Kornheiser (Chair)]: Can you cut to the chase with larger font?

[James Masland (Member)]: I can. Absolutely. So

[Ted [Unknown] (invited witness)]: looking at the In FY 'twenty seven, an additional 1% for STOW for a full year of revenue. This is kind of taking what we have currently for 2025 and forecasting forward, would raise in total, the additional 1% would raise $4,800,000 In FY27, the additional 1%, if it were to go through, would not be implemented. It would not go live until October 1 year. And so that means you would receive 75% of that full year of revenue. So about $3,600,000 and half of that would go to the local option municipal transportation special fund, the WONT. Guess I'm going try and shop that.

[Bridget Burkhardt (Clerk)]: Maybe not.

[Ted [Unknown] (invited witness)]: Okay, I'm going to say all four words. So that would raise That would allocate $1,500,000 to that special punch in FY '27, and then with a full year of revenue, it would be about $2,400,000 four percent two of Stow's 1%. Thanks. Any questions?

[Carolyn Branagan (Member)]: Yes. So right now, Stow has just the 1% local option?

[Ted [Unknown] (invited witness)]: They have just the 1%, yep.

[Carolyn Branagan (Member)]: So, if this were to be implemented, it's the select board that would do it. Would the voters get a chance to vote on that?

[Ted [Unknown] (invited witness)]: So, the voters have already voted. And so, because this is outside of the 1% authority, and so any town that does the base 1%, I forget the act number, but it was two years ago, where you allowed any town to get a local option tax without having to go through a charter change. But because this is an additional 1% above that base 1% authority, what the voters voted on in March needs to be done through a charter change that has

[James Masland (Member)]: to go through you all. So

[Carolyn Branagan (Member)]: what we've done is that even though the local people vote yes, it's looking at the state census.

[Ted [Unknown] (invited witness)]: For this additional 1%, yep.

[Carolyn Branagan (Member)]: Any more questions for Ted?

[Emilie Kornheiser (Chair)]: Okay. Thank you, Ted. Does someone move the amendment?

[Bridget Burkhardt (Clerk)]: Ready? I'm chair. I would make a

[Edward "Teddy" Waszazak (Member)]: motion that we sign H954 favorable as amended by the Committee on Lightning and Aged.

[Emilie Kornheiser (Chair)]: Thank you. Representative Woodman who's that we find the amendment to H954 favorable. Any discussion? I just want to say,

[Carolyn Branagan (Member)]: this is tax increase, but I always struggle with these local option things because the voters vote to do it themselves.

[Bridget Burkhardt (Clerk)]: Yeah, they contested. Yeah. They did. And who are

[Carolyn Branagan (Member)]: we to cut in the way of what they have voted? So that's why I struggle with it. Think you understand. These are always difficult.

[Mark Higley (Member)]: 90% of the voters, which doesn't matter that somebody voted.

[Emilie Kornheiser (Chair)]: Very gobops of you.

[Bridget Burkhardt (Clerk)]: Representative, do wanna say anything? Well, just what is one to do? You know, like, you can't just ignore elections 100%

[Carolyn Branagan (Member)]: sure And wouldn't come

[Bridget Burkhardt (Clerk)]: so, I just think people, and usually it's something like that's not about, if you're duly opposed, you'd show up. And if you're like, you know what I don't even have to say, maybe you don't show up, but then you say, I guess I'll take it in. It's a very tourist heavy town, so they probably figure what, we'll do well with this. We don't know what they're thinking, but if they don't come to polls, we don't know, so we can only count on the people who do come. That's what

[Carolyn Branagan (Member)]: I want to say. Thank you.

[Bridget Burkhardt (Clerk)]: My concern is just that we haven't really heard from folks at Stowe about all these plans of what to do with their money, nor have we had our pilot special fund day that we had promised when we were reallocating pilot special fund monies earlier in the session. So I'm just a little surprised that we're moving ahead with an amendment that might surprise the folks in Stowe that the charter changed forward.

[Emilie Kornheiser (Chair)]: And this will go back to GovOps to do a straw poll, and maybe they'll be able hear from Stowe when it goes back to them. I was hoping that we were going to get this much earlier in the session, so we would have more time to do this.

[Mark Higley (Member)]: That's how things go. We have the ultimate power, that in China.

[Emilie Kornheiser (Chair)]: Indeed, yes, do. And as someone who has moved a few difficult charter changes through here on behalf of my town, I understand what an interesting balancing act it can be representing a town that has a charter change. Yes.

[Edward "Teddy" Waszazak (Member)]: I very much appreciate the push to try and get more money to towns as a town or as a city that has a lot of state roads. I very much appreciate that. And I will vote to support this, but I'm nervous that we are adding yet another iron in the

[Mark Higley (Member)]: fire that is local options taxes

[Ted [Unknown] (invited witness)]: in the pilot special fund and all of this.

[Edward "Teddy" Waszazak (Member)]: It's your use, Craig. We with the creation of this new special fund. It's just one more thing to balance as we talk about the inequities in the pilot fund as it exists now and the use of all of that money. I it's a worthwhile conversation, but as things go in May, state does.

[Bridget Burkhardt (Clerk)]: Thank you. Any further discussion? Okay, so quick could please call the roll. Representative Branagan? Yes. I'm gonna go ahead. As Representative Burkhardt on the amendment.

[Emilie Kornheiser (Chair)]: Representative Higley?

[Mark Higley (Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Holcombe? Yes. Representative Kimbell? Yes. Representative Masland?

[James Masland (Member)]: Yes. Representative Ode? Yes. Representative Page?

[Woodman Page (Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Waszazak? Yes. Representative Canfield?

[James Masland (Member)]: Yes.

[Bridget Burkhardt (Clerk)]: Representative Kornheiser? Yes. You've voted the amendment. Favorable ten-one-zero.

[Emilie Kornheiser (Chair)]: Thank you. And the Yes?

[James Masland (Member)]: We've been on transportation with Ritchie Westman a long time ago, recognized how difficult it is to get revenue for local transportation. I think this is fine. I can good good idea. But I agree with those who are concerned about mental health. We're here and there, and also what sarcastically would say, initially, you've seen a whole lot of money. And, you know, count by count. If I were being cynical today, I would say it's good we didn't do away with the penny completely because we may need them.

[Emilie Kornheiser (Chair)]: Reverend Almazlan, would you perhaps like to wrap up those comments by making a motion to find 954 favorable?

[James Masland (Member)]: I'm not I move that we find 964. 50. 954. I'm at the wrong one. I've done that. Favorable. Thank you.

[Emilie Kornheiser (Chair)]: Thank you. Representative Masland is fine. So we've moved so we find H nine fifty four favorable as amended. Any discussion? I think we've discussed.

[Mark Higley (Member)]: Alright.

[Bridget Burkhardt (Clerk)]: If you can please call that out. Thank you. Representative Branagan? Yes. I'll vote yes.

[Carolyn Branagan (Member)]: Then represent Burkhardt? Representative Higley? Yes. Representative Holcombe? Yes.

[Rebecca Holcombe (Member)]: Representative Kimbell? Yes. Representative Basland?

[James Masland (Member)]: Yep.

[Carol Ode (Member)]: Representative Ode? Yes. Representative Page? Yes. Representative Waszazak?

[Bridget Burkhardt (Clerk)]: Yes. Representative Canfield? Yes. Representative Kornheiser? Yes.

[Emilie Kornheiser (Chair)]: We've voted the bill favorable as amended eleven-zero-zero. Thank you everyone.

[Emilie Kornheiser (Chair)]: Representative Waszazak, can you report this?

[James Masland (Member)]: We

[Bridget Burkhardt (Clerk)]: love those municipal issues. I do indeed. We

[Emilie Kornheiser (Chair)]: are going to

[Bridget Burkhardt (Clerk)]: look for an attorney. Oh, we're going take

[Emilie Kornheiser (Chair)]: a

[Mark Higley (Member)]: five

[Bridget Burkhardt (Clerk)]: minute wait.