In early August, a law took effect in Maine that will leave many Vermonters thinking “if only...”
Permanent Maine residents 65 or older who have owned a home for at least 10 years may apply through their towns to have their property taxes frozen at their current level. The Maine Policy Institute reports:
The cost of the program is expected to rise significantly as more individuals become eligible and sign up. According to estimates in the 2020 Census, roughly 16% of Maine’s population could potentially qualify for this program, as about 20% of Mainers are over the age of 65 and approximately 80% of that subset are homeowners. The bill’s fiscal note projects that the price tag of reimbursing municipalities will roughly double year-over-year, costing $2.6 million for FY 2023, $7 million for FY 2024, and $14 million for FY 2025.
Expensive for sure, and one wonders what the fiscal impact to Vermonters of such a policy would be. Vermont certainly has far less worthy endeavors that it has spent money on!
The last major attempt to change the way Vermonters paid property taxes came in 2018, as covered by EAI in a roll call which became law. Rather than alleviating the overall tax burden, Vermonters with higher incomes pay more while Vermonters with high-value properties pay less than before the change.
Both Maine and Vermont have a long way to go to achieve anything resembling true fiscal responsibility.
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First, some background:
Governor Mills of Maine, then up for and who recently won reelection, wanted to take knock the wind out of a similar proposal from that of her opponent, former Governor LaPage, who long favored in cutting taxes for Seniors. Governor Mills was smart enough to pass this legislation before she would face former Governor LaPage, in his hope to retake being Governor.
There are many elements that Vermont would have to look at. Would Vermont put an income cap on Seniors that would qualify? Would Vermont change the eligibility length in years as a Vermont primary residence? (vs Maine that I believe requires a 10 year minimum in ones declared primary residence.) How would cities and towns be guaranteed from any property tax revenue loss?
With Massachusetts passing the “Millionaires Tax”, I see no problem luring those of wealth that may flee Massachusetts for New Hampshire (Or more likely Florida) that may instead consider Vermont.
Christian M knows full well, many Seniors in Vermont are not in the millionaire bracket but her concern is only in part legitimate. I hope Christian M knows that many seniors have worked hard and should not be condemned if money was earned by their blood and sweat. Much as not to condemn seniors who struggle.
We are talking about most Seniors in Vermont, now on fixed incomes, who have paid more than there fair share in taxes, paying over and over for generations in educational taxes and other programs long after those seniors had “skin” or children in such programs. Should seniors still contribute? Yes, but at a far far lower level.
Vermont property taxes, taxes on military pensions and social security far more punish than protect seniors here in Vermont. What an insult to veterans with a pension in Vermont only putting forth an insulting minimal tax break for veterans living near the poverty line! In most states, military pensions are not taxable!
The bottom line: Much a Seniors have before you, if you have children that are now in the educational system and more social assistance is needed, then those who have children pay more and face that responsibility as Seniors have before you.
The Maine tax freeze for Seniors is a trial program, enough to have gotten Governor Mills reelected. I have no doubt Vermont would adapt many changes if ever to act on this. But, act we should!
Both Sheldon Katz and Christian M both bring merits to their points of view.
Lets hope Montpelier can work with both to make that ugly sausage into legislation that will give Seniors the tax relief they need and have earned!
While these programs might make life affordable for some individuals if they had income restrictions, without income restrictions, it only shifts the burden to a smaller percentage of working individuals who face their own affordability issues.