by Chris Pearson Voters have been clear they want property tax relief. Crystal clear. Voters also consistently support school budgets, which leads me to believe strong schools are a high priority. These two desires aren’t necessarily at odds and I’m pleased to tell you a solution is underway in Montpelier. The way we pay for schools today burdens low-income and middle-class families more than anybody. That’s because most of us, two-thirds of homeowners, pay under "income sensitivity" which brings our bill down to 3% of our income. This benefit is extended to everyone with a household income up to $135,000.
Further up the economic ladder families are paying just 1.5% or even 0.6% of their incomes to support schools. These are the families who've seen most of the growth in income since the 2008 recession. If most of us can afford to pay 3% of our income to support schools it seems fair to ask wealthy families to pay the same amount.
H656 is a bill I introduced with 34 co-sponsors at the start of the 2016 legislative session. Our proposal would have all households pay for schools through the income sensitivity structure. When we extend this to all Vermonters we raise $82 million from our wealthiest families. H.656 uses this money to relieve families earning under $200,000 as much as $500 a year. I don’t mean slowing how fast your bill grows, I mean charging you less next year.
The proposal has no impact on commercial properties, second homeowners, or renters. As with any new legislation there are details to work through so the House Education committee tucked a request into the annual tax-rate bill. It directs our Tax Department, legislative fiscal staff and legal staff to model the impact of our proposal. The idea is to come back next January ready to work through the proposal and make the change Vermonters have been begging for over the last decade.
We can make our school funding system more fair. We can save most Vermonters money on our property taxes and, as we deliver property tax relief, we can keep our schools strong.
Representative Chris Pearson is in his 5th term representing Burlington. He is a candidate for Chittenden County Senate.