Local Option Tax Increases Brattleboro Revenue, But Property Taxes Will Still Rise

At Tuesday’s special meeting, the Brattleboro Selectboard discussed adding a 1% Local Option Sales Tax (LOST) to items purchased in the ‘boro. Adding this additional revenue stream to the Town coffers has been attempted before. Most recently it barely passed as an advisory vote, but was ultimately rejected.

The main argument in favor of the tax usually involves the expected revenue. In 2015, the estimate was $600,000. This, in theory, could offset property taxes by that amount.

But, taxpayers have seen these property tax reducing “deals” many times before, and property taxes do not go down. Spending rises to meet the new income.

This would certainly be true this time around. The Town Manager has noted loudly and often that Brattleboro needs to spend more each year than it currently spends. There is a long list of capital improvements that are underfunded, and there is a list of vehicles and machinery that shows how this money should be spent for the next 25 years. Add in rising health care costs, workman’s comp fees, and so on. There will always be something.

Any new tax income from a 1% Local Option Sales Tax will almost certainly go toward buying more necessities for the Town of Brattleboro, and not toward reducing property taxes.

At last week’s meeting a new argument was being floated – that the 1% LOST would somehow be a big help to the poorest people in Brattleboro. Dick Degray said that adding a 1% additional cost will help the poorest be able to afford to stay in town rather than move somewhere cheaper. He said that if the tax isn’t added, storefronts will close because no one will shop in town.

This makes no sense. People will stop shopping here if we don’t raise our sales tax?  Poor people won’t be able to live here unless we make local purchases more expensive?

Another argument of the board is that this helps level the playing field by forcing visitors to town to help pay for town services. But visitors already pay for the services they use – it’s called the Parking Fund, and Rooms & Meals taxes.

The idea that Brattleboro  is a special place that deserves an admission fee like Disney World is one that won’t go away. “Outsiders owe us” is a common refrain. This would be true if the people of Brattleboro never left town and used “services” of other towns and cites, but they do. It’s just that some don’t see that this all balances out in the end.

Take Northampton, for example. Brattleboro folks go to Northampton all the time. Should they pay extra taxes to Northampton for that privilege? Of course not, just as Northampton folks should not have to pay extra to visit Brattleboro. We take care of our space, they take care of theirs, and we visit one another.

If every town and city started charging extra, as Brattleboro suggests, the net result would simply be that everything cost more everywhere. Property taxes would not drop anywhere.

Need more reasons to avoid this new 1% LOST suggestion?

– many Brattleboro businesses operate on shoestring budgets with little margin for error. Throwing a 1% additional fee on products sold will have an impact. Some people will choose to avoid that tax and shop elsewhere and pocket that 1%. This will especially be true of big ticket items.

– the last time this came up as a revenue suggestion, it was to help pay for the Police and Fire facilities.  Now it’s suggested that the 1% LOST is to reduce property taxes.  The truth is that it is revenue that will be absorbed and figured in as expected each year, and taxes will not drop by an equal amount. It doesn’t directly save taxpayers money – it defrays costs.

– The other local option taxes did not reduce property taxes as promised. Taxpayers are paying more than ever, and also paying extra taxes when they go out to eat, etc. It just costs more all around for everyone.

Looking to the 1% local sales tax to reduce property taxes is not realistic. The way to reduce property taxes is to reduce the Town Budget, not create new taxes.  If the Selectboard wants to lower property taxes – a very good goal, long desired by taxpayers – they should do the hard work of trimming services.

Cutting services is more painful, but is more effective in the long run. It’s what surrounding towns do to keep their taxes down – surrounding towns don’t have the level of services that Brattleboro maintains. Guilford didn’t add two shiny new fire stations. Marlboro doesn’t have sidewalk plowing. Williamsville doen’t pay for a community swimming pool. Putney doesn’t pay for staff to see if parking meters are out of time. Those are Brattleboro choices and in some cases luxuries, and great for those who choose to afford them. Others live elsewhere.

The Selectboard can argue for additional taxes, and try to make it seem like they would be a good thing, but in the end, cutting services is the only way to reduce taxes.

1% LOST is one percent lost.

Final thought: the State of Vermont is on the edge of taxing marijuana. All the effort that will be put into the 1% LOST should instead be put into lobbying at the state level for a significant local share of what is expected to be a very lucrative, high tax on weed. This income would dwarf any 1% sales tax, and would be shared throughout the state so that Brattleboro isn’t singled out for raising taxes again.