Candidates Disagree On Property Tax Burden

10/27/10 7:34AM By Bob Kinzel
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AP Photo/Alison Redlich
(Host) The major party candidates for governor can't agree on whether Vermont has a high property tax burden compared to other states.

You'd think it might be easy to measure states against each other to figure out which candidate's claim is true.

But as VPR's Bob Kinzel reports, there's no simple comparison.

(Kinzel) At almost every campaign stop in this year's race for governor, Republican candidate Brian Dubie makes a statement like this one:

(Dubie) "Well, my statement is pretty clear. Vermont has the highest property taxes in the country."

(Kinzel) The question is,  is this statement accurate?  The answer appears to be, yes, maybe, and no. The reason there's no definitive answer is because there many different ways to evaluate tax burden.

The Tax Foundation is a nonpartisan tax research group based in Washington, D.C. At their Web site, they list three different ways to evaluate property tax burdens using median income and median home values.

Using one analysis, Vermont is number 9; on the second, Vermont is number 8; and on the third, Vermont is number 3.

Dubie likes to single out yet a fourth way to measure tax burden done by former state economist Art Woolf.  Woolf  says it's very straightforward.

(Woolf) "If you take Vermont's total property taxes paid and we divide it by personal income and we do that for every state in the country, we get that we're number 1."

(Kinzel) Jack Hoffman is a senior policy analyst at the Public Assets Institute.  He says the flaw in Woolf's approach is that it fails to differentiate between residential and non-residential tax burdens and lumps them all together.

(Hoffman) "Part of the problem with that is it's assuming that Vermont residents are paying all the property taxes in the state, including taxes on second homeowners and businesses. We know that's not the case. So it gives you a distorted number."

(Kinzel) Woolf doesn't dispute this point. But he thinks his analysis still presents a valid national comparison.

(Woolf) "The measure is not a residential property tax number. It's just an aggregate property taxes paid by whoever pays them in the state - could be state residents; it could be non-residents; it could be businesses; it could be anybody. So there is no way of obtaining comparable numbers for all 50 states on residential property tax burdens."

(Kinzel) But Hoffman says that's the number that means the most because Vermont relies more on the statewide property tax to pay for education than virtually any other state in the country.

(Hoffman) "I think when Vermonters hear whether we're a high tax state or a low tax state or whatever, it is, I think, they're thinking about themselves. And they want to know how much the residents of Vermont are paying. And so I think that's the measure we should be looking at."

(Kinzel) The various tax studies do take into account that roughly 65 percent of all households in Vermont pay their school taxes based on their income, and not the value of their property.

For VPR News, I'm Bob Kinzel in Montpelier


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