Learn about Vermont Tax Rates
I’m not sure how I found this Vermont government web page (it was a while ago), but if you want to educate yourself on school and municipal taxes, you should check out a number of links here:
http://www.state.vt.us/tax/pvr.shtml
You should especially check the drop-down list of additional documents on the bottom of that page. These pages include numerous Excel spreadsheets and matching pdf files (aka Adobe Acrobat files, for those who don’t have Excel), making it possible to accurately compare Windsor’s taxes and property values.
The one I found most useful there was Annual Reports. The latest annual reports are for 2006, but that’s pretty good.
It’s going to take me a while before I understand what each of the spreadsheet columns indicates, because of acronyms and jargon. But I have found a number of definitions by reading through additional spreadsheets.
Hopefully studying these will help us all better understand how Windsor compares against similar towns (if those exist?).
Tags: annual report, state, taxes, vermont government
December 8, 2007 at 2:49 pm
Stew,
Thanks for posting the link to the tax info. I’ve reviewed information on this site each budget season for the past several years. Two documents that I find very informative are:
Tax Rates – Effective by County
Education Grand List – Equalized
I reviewed the “Tax Rates – Effective by County” report and found that Windsor’s effective residential tax rates for the most current year of data (tax year 2006) compare to the other 261 communities statewide as follows:
School - $1.2223 (residential or “homestead” rate)
129 communities have a residential school tax rate higher than Windsor
132 communities have a residential school tax rate lower than Windsor
Municipal - $1.0057
5 communities have a municipal tax rate higher than Windsor
256 communities have a municipal tax rate lower than Windsor
Combined - $2.2310 (this includes $0.0030 of “Local Agreement Effective Tax Rate”)
10 towns have a combined municipal & school residential tax rate higher than Windsor
256 towns have a combined municipal & school tax rate lower than Windsor
On the non-residential side, 205 communities have a higher non-residential school tax rate than Windsor. When the non-residential school rate is combined with the municipal tax rate, 12 communities have a higher combined municipal and school tax rate.
Note: Effective tax rates are computed using equalized grand list values, i.e., grand list values that are adjusted to reflect the differing levels of property valuation from one community to the next.
I’ll send you a copy of the excel worksheet that I downloaded, expanded and sorted to arrive at these numbers.
December 8, 2007 at 2:57 pm
I noticed an error in my last post. I stated that 255 towns have a combined municipal and residential school tax rate lower than Windsor. The correct number is 251. That part of my post should should read:
Combined - $2.2310 (this includes $0.0030 of “Local Agreement Effective Tax Rate”)
10 towns have a combined municipal & school residential tax rate higher than Windsor
251 towns have a combined municipal & school tax rate lower than Windsor
December 9, 2007 at 11:02 am
John/Stew,
This is a great resource and those of us who care enough to look at it and draw our own conclusions can learn a lot from it. Having said that, the majority of the tax-payers will not look at it, and will (as always) formulate their opinions based on the amount of their tax bills. There are two things we need to learn from that fact:
1. We cannot understate the importance on that bottom line tax bill. We can rationalize that it’s not all that bad in relation to the rest of the state, but for a fairly high percentage of our population, every little increase in the cost of living in Windsor is pretty painful. We have absolutely got to do our best to keep Windsor as affordable as possible.
2. We need to come up with a way to portray the tax situation in as simple and concise way as possible to get the points across to help the general populace understand how this system works. The numbers themselves speak for some of us, but certainly not the majority of the citizens.
I’ve been analyzing some of the data in some spreadsheets of my own. I’m not finished yet, but here are some preliminary observations and questions I have.
- First, we need a better data set than statewide comparisons. More than half of the towns on the list are tiny hamlets with infrastructures as varied as can be. No need to compare ourselves against towns like Ferdinand and Buell’s Gore.
- On the EPT side, when you peel away these small towns and hamlets, the education side of the property tax is fairly even across the state. Towns with large capital construction costs tend to be higher. Towns that have no High School (i.e. Tuition payers) tend to be lower, but in general, it’s fairly flat, perhaps +/- about .20 cents on the dollar.
- Windsor is not alone among the high overall tax-rate towns that appear to be very good at containing education tax rates. Part of this may be related to the amount of funding these towns get to support special education, since there is certainly a correlation between economic depression and higher percentages of special education (non-locally funded) outlays. So towns like Proctor, Brattleboro, Windsor, Springfield, North Bennington, Rutland City, et cetera are getting a higher percentage of their education dollars funded from the state and federal government.
- The biggest source of property tax variation among the larger towns and cities, however, is on the municipal side, as you point out. Much more analysis needs to be done in this area to help us understand why Windsor cannot adequately fund municipal services with a top-10 highest MPT rate in the state. I suspect a lot of it has to do with the fact that there are certain base costs connected with having fire, police, water, sewer, and highway services that are relatively fixed regardless of the size of the town they support. I think MRI has essentially said that, but it would be great to see a more in-depth analysis of the cost of these services, from which we can draw conclusions and courses of action.
- I would like to look at the CLA in more depth. The variation seems extremely high across the state, and I would like to get a better handle on the formula and the process in general. I am extremely skeptical of it’s validity based on my cursory looks at it thus far. In my view, this part of the statewide property tax system is extremely vulnerable to politics and corruption, and a great many municipalities possibly being slighted in the process.
- Jim Bennett
March 2, 2008 at 6:58 pm
I would like to look at the CLA in more depth. The variation seems extremely high across the state, and I would like to get a better handle on the formula and the process in general. I am extremely skeptical of it’s validity based on my cursory looks at it thus far.
It’s a 3 years study of sales, assessed value divided by sales price gives you a general idea. If a house sells for 200,000 and it’s assessed by the town at 85,000 the cla is 44% aggregated across all sales you can establish the town wide level of appraisal. Some towns are grossly under assessed based on current sales and the cla is low. The common level of appraisal is used to ‘equalize’ or bring all the properties into line with the market. I won’t tell you it is a perfect system. But I posit it is valid. Confusing as all get out, but mathematically valid.
It is part of the math that creates the homestead education tax rate. It is up to the municipalities to maintain the cla at or near 100. If the listers are not doing this then the cla goes down and the education tax rate goes up. It’s important that the listers and assessors do their jobs well. In some towns the cla is under 50%.
I believe that you can find the “introduction to the ratio study’ online, or I’m sure your listers and assessors have a copy of it.
If you look a the education part of your tax bill it shows you how it’s used.
March 2, 2008 at 9:41 pm
Thanks. I understand how it’s used, and am more interested in the statistical methodology used. I found the “introduction to the ratio study” document on the State website, but it’s fairly generic.
I’m particulary concerned with how the coefficient of dispersal (COD) is calculated and treated. It seems to me that COD is to some extent a measure of inequity between appraised/sales values, but also an indicator of town demographics (real inequity vs. appraisal inequity) and also seems to be greatly influenced by small sample sizes.
I know that high CODs (20 or higher) trigger reappraisals. Can we infer from this that the PVR considers a high COD to be an indicator of an inaccurate grand list even if the CLA is near 100? If so, does the state put pressure (direclty or indirectly) on town listers to alter their assessments to keep the COD within an acceptable range?
In other words, is there pressure on towns to assess a three-bedroom cape in good condition on a half-acre lot the same, regardless of location? That might make sense in Norwich or Williston or even in Springfield, but in Windsor, location is everything.
- Jim