PDA

View Full Version : Taxes in the Valley: Problems and Solutions



win
03-23-2008, 08:13 PM
The number one cost is payroll, followed by energy, insurance and property taxes. Energy costs everywhere are up substantially and far more than season pass prices which are up on average only 5%. Vermont is still the most regulated energy distirbution state and makes it more difficult for us to find competivice sources. We can only purchase our electicity though GMP. Worker's Comp in this State is also very challenging. There is virtually no competition because of State regulation, and one carrier has a virtual monopoly and is making a huge amount of money on our account by making our premiums incredibly expensive. Our fourth largest expense is property taxes and Vermont's Act 68 has increased everyone's cost dramatically in ski towns, and there is no evidence that the quality of education has improved in the State. Essentially the local control of school budgets has been ceded to the bureaucracy in Montpelier. Clay Brook owners paid over $750,000 in property taxes and litlle of this went to the town of Warren. The town and school budget is approximately $5 million so this new found money should have reduced everone's property tax in Warren. instead they went up! Unless these issues are addressed by local voters, skiing and riding is going to become even more expensive for eveyone. There is an election in November!

notorious
03-24-2008, 02:34 PM
The issues raised in Win's last message are worthy of a separate thread.. Particularly those of us who are property owners, but not VT residents, are getting croaked by the regressive real estate taxes in the MRV. However the residents are also facing nothing but bad choices regarding the finances of local government. Win raised these issues in a letter to the Valley Reporter last fall, I believe. But I have yet to see any public dialogue. The local state legislators write weekly reports on state house issues for the VR, but they never discuss these issues, obviously because they have no potential solutions. The editor of the paper pontificates on all manner of global events, but doesn't touch the third rail of taxation. As long as they are not held responsible for their failure to address the situation, nothing will change. Despite the tradition of citizen activism on social issues in VT, there is a reluctance of citizens to become involved in organized lobbying at the state house--maybe it's too "city" for their tastes. The whole valley got into an uproar over a quarry, but no hue and cry over much more critical subjects. The only way to redress the problems which Win has again stated is to get involved in the politics. There are better solutions to funding government,
but both local and non-resident taxpayers need to organize.

And although I have mainly replied to Win's points on real estate taxes, I understand and agree with him regarding state energy policy and worker's comp. The state needs policies which enhance competition, not prevent it. Same goes for health insurance.

Any takers?

ski_resort_observer
03-24-2008, 03:22 PM
The property tax issue is very complicated. The current system is the result of a decision by the Vermont Supreme Court to level the playing field regarding poor towns and wealthy towns. They felt that a child in Chelsea has the right to the same education as a child in Stowe or Warren. The sticky wicket is that the wealthy towns have to send money to the state to be given to the poor towns to achieve that equal access to a quality education as required by the court's decision.

I feel local towns do have local control as it is the towns who determine their particular school budgets on town meeting day. The state has nothing to do with that. Vermont property taxes are divided into two separate bills, the town part and the state part. Everybody pays the same tax rate on the state part, it's the town part that can vary depending how much each town wants to spend on their schools.

As far as the rates for out of state property owners vs Vermonters I think Vermonters should pay a lower rate as their Vermont home is their primary home and this is Vermont we are talking about. I own a second home in Maine and have no problem paying a higher rate than Mainers. I don't need the home in Maine to live...they do. I would never expect to pay the same as a Mainer but thats just me.

The last couple of years the legislators have promised to work on a better system to fund the schools but two years ago they spent most of the session fighting over a bill to impeach Bush. This year they did discuss paying for the schools via the state income tax instead of property taxes but that didn't get to far. Right now they are arguing over the state budget, nothing else will probably get done this year.

The bottom line is this...the folks in the sending towns hate the system....the folks in the receiving towns love it so they have no interest in changing it.

madhavok
03-24-2008, 04:08 PM
There is no reason why out of staters should have to pay higher taxes than "Vermonters", in fact that sounds a lot like discrimination. Actually it is worse then that. Who is the burden on local and state services? Obviously it’s the people who live in Vermont 365 days a year, aka Vermont residents! So what do they do? Burden the out of staters with the taxes! That’s wrong, unfair and unjustified. But just when you thought it couldn’t possibly be more unreasonable, out of staters can’t vote on school & town budgets.

What a crock, unless you’re a Vermonter!

Talisman
03-24-2008, 04:10 PM
As far as the rates for out of state property owners vs Vermonters I think Vermonters should pay a lower rate as their Vermont home is their primary home and this is Vermont we are talking about. I own a second home in Maine and have no problem paying a higher rate than Mainers. I don't need the home in Maine to live...they do. I would never expect to pay the same as a Mainer but thats just me.


What I find interesting about out of staters paying a higher rate in VT is some states and muncipalities encourage out of state property ownership because second home owners typically use less of expensive services like schools. I think taxing out of staters at the same rate is fair and recognize there is not the ability for non resident land holders to vote on the tax issues in the town or state in most cases. Fortunately I don't have the means to buy in VT and can only watch from the sidelines.

notorious
03-24-2008, 05:45 PM
Actually, Win's thoughts were directed mainly toward the problems of running a profit-making business in VT.

The property tax problem is merely one of several issues which are connected only by the indifference of the political and civic leaders in the MRV to business. They seem to love the revenue business brings, and the jobs it provides, but it better not need the slightest accomodation by the powers that be. Examples: Small Dog, one of the cleanest, most progessive employers conceivable can't get minor alterations to its permits in order to thrive, so it opens a new store out of the valley. Ditto Canus goats milk cosmetics which had to move its operations to Waterbury. Jake's auto couldn't get permits to enlarge its service center, now it no longer exists. There are many similar examples. How about the tempest in a teapot over signage? Businesses are being harassed by the Waitsfield zoning administrator over temporary sandwich board signs announcing special sales.

Utility deregulation has not produced much rate relief to consumers in the states where it exists, but large volume users, including government as well as business, have the ability to shop for best rates due to economies of scale. Deregulation has worked for large users---and presumably reduced pass-through costs of the large users to consumers.

Workers comp and health insurers do not locate in states where the the system does not foster competition.

In general, it is fair to conclude that the state is hostile to business--except large scale agribusiness, which is favored at the expense of the future of VT agriculture, which is in organic and specialty dairy and food products. (Witness the flap over Gaylords chickens being sold to American Flatbread which was solved by a small but inspired group of citizen activists thus proving my point in the previous message relative to getting involved in the political process N.B. non-resident property owners)

Maybe the business and property tax issues should be split into separate threads..

At any rate, I admire Win for speaking openly about the anti-business culture of VT (my words, not his) in the context of next year's pass prices.

MikeTrainor
03-24-2008, 10:01 PM
Actually, Win's thoughts were directed mainly toward the problems of running a profit-making business in VT.

Utility deregulation has not produced much rate relief to consumers in the states where it exists, but large volume users, including government as well as business, have the ability to shop for best rates due to economies of scale. Deregulation has worked for large users---and presumably reduced pass-through costs of the large users to consumers.

Workers comp and health insurers do not locate in states where the the system does not foster competition.

While deregulation may not have a huge effect on a residential customer even a small to mid size business can see huge savings. For example with electricity many completive energy suppliers will let you lock in a rate for several years. Not only would this protect you from a sudden spike in energy but will help you budget out utilities for the year. For the most part you can figure out how much power you are going to use in the summer, winter etc. based on historical data. If you don't mind taking a little risk often a variable rate will end up being cheaper. One completive supplier in the Massachusetts area rate averages about 20% below the local power company NSTAR. If you are in a commercial building with an electric bill of $8,000 for the month that would be around $800 a month in savings, (power usage only represents half the bill the other half is delivery). To a smaller company that is a huge savings for the same product. I can tell you a ski resort is using quite a bit more power than that.

Same is true with telephones, T1 lines etc. that is a highly completive field in a deregulated state. Even with natural gas there is a little bit of saving through deregulation.

Don't under estimate how much deregulation is helping smaller business who often don't have the funds or resources of larger companies.

Same is true with health insurance. Most insurances wold even negotiate a rate to a company with under 50 employees, adding on even higher cost to a small business.

I don't see anything wrong with deregulation the more companies compete the more you save. At the end of the day local utilities are still making money too. The local power and gas companies are still getting you for delivery which is where they are making most of their money. Phone lines are still leased though the local phone company. No sense in having a monopoly.

ski_resort_observer
03-24-2008, 10:27 PM
Actually, Win's thoughts were directed mainly toward the problems of running a profit-making business in VT.

The property tax problem is merely one of several issues which are connected only by the indifference of the political and civic leaders in the MRV to business. They seem to love the revenue business brings, and the jobs it provides, but it better not need the slightest accomodation by the powers that be. Examples: Small Dog, one of the cleanest, most progessive employers conceivable can't get minor alterations to its permits in order to thrive, so it opens a new store out of the valley. Ditto Canus goats milk cosmetics which had to move its operations to Waterbury. Jake's auto couldn't get permits to enlarge its service center, now it no longer exists. There are many similar examples. How about the tempest in a teapot over signage? Businesses are being harassed by the Waitsfield zoning administrator over temporary sandwich board signs announcing special sales.

Utility deregulation has not produced much rate relief to consumers in the states where it exists, but large volume users, including government as well as business, have the ability to shop for best rates due to economies of scale. Deregulation has worked for large users---and presumably reduced pass-through costs of the large users to consumers.

Workers comp and health insurers do not locate in states where the the system does not foster competition.

In general, it is fair to conclude that the state is hostile to business--except large scale agribusiness, which is favored at the expense of the future of VT agriculture, which is in organic and specialty dairy and food products. (Witness the flap over Gaylords chickens being sold to American Flatbread which was solved by a small but inspired group of citizen activists thus proving my point in the previous message relative to getting involved in the political process N.B. non-resident property owners)

Maybe the business and property tax issues should be split into separate threads..

At any rate, I admire Win for speaking openly about the anti-business culture of VT (my words, not his) in the context of next year's pass prices.

You can add the hassle the Village Store had over their two parking spaces, The hoops Vt Canoe had to go thru to expand, the list goes on and on. While many of the businesses you mention are a local issue...statewide the mother of all things that is a huge obstacle to business growth in Vermont is Act 250. The original premise is great but it has too many loopholes making it a long and expensive process for any new business.

random_ski_guy
03-24-2008, 10:45 PM
The issues raised in Win's last message are worthy of a separate thread.. Particularly those of us who are property owners, but not VT residents, are getting croaked by the regressive real estate taxes in the MRV. However the residents are also facing nothing but bad choices regarding the finances of local government. Win raised these issues in a letter to the Valley Reporter last fall, I believe. But I have yet to see any public dialogue. The local state legislators write weekly reports on state house issues for the VR, but they never discuss these issues, obviously because they have no potential solutions. The editor of the paper pontificates on all manner of global events, but doesn't touch the third rail of taxation. As long as they are not held responsible for their failure to address the situation, nothing will change. Despite the tradition of citizen activism on social issues in VT, there is a reluctance of citizens to become involved in organized lobbying at the state house--maybe it's too "city" for their tastes. The whole valley got into an uproar over a quarry, but no hue and cry over much more critical subjects. The only way to redress the problems which Win has again stated is to get involved in the politics. There are better solutions to funding government,
but both local and non-resident taxpayers need to organize.

And although I have mainly replied to Win's points on real estate taxes, I understand and agree with him regarding state energy policy and worker's comp. The state needs policies which enhance competition, not prevent it. Same goes for health insurance.

Any takers?

Being out of state I'm not in a position to add much other than to commend you for calling out the situation. With all the local business churn in the Mad River Valley, it strongly suggests that its a difficult place to conduct business. Now maybe its mismanagement of the businesses themselves or maybe its the community strangling growth at all costs. I'm not sure which, but its a good bet is a combination with a strong tilt towards the latter.

smootharc
03-25-2008, 09:30 AM
.....and pretty soon you'll be as disfunctional and broken as my primary residence state......New York !

Talk about residence and business unfriendly. The Empire State sets the Platinum standard for "high taxation madness" married to "gross misuse of tax revenue". Talk about the bride of frankenstein !

Just call me the village idiot. I live in "The Empire That Was State", and also pay my flatlander second home taxes in VT. I must be mad. Oh, wait....I'm addicted to this little corner of the planet called the Mad River Valley.....so it must be okay....right ?

Can't wait to move from New York to the "Live Free or Die" state. Me and the old man of the mountains have a date with taxation destiny.

jkvt
03-25-2008, 10:30 AM
Actually, Win's thoughts were directed mainly toward the problems of running a profit-making business in VT.

The property tax problem is merely one of several issues which are connected only by the indifference of the political and civic leaders in the MRV to business. They seem to love the revenue business brings, and the jobs it provides, but it better not need the slightest accommodation by the powers that be. Examples: Small Dog, one of the cleanest, most progressive employers conceivable can't get minor alterations to its permits in order to thrive, so it opens a new store out of the valley. Ditto Canus goats milk cosmetics which had to move its operations to Waterbury. Jake's auto couldn't get permits to enlarge its service center, now it no longer exists. There are many similar examples. How about the tempest in a teapot over signage? Businesses are being harassed by the Waitsfield zoning administrator over temporary sandwich board signs announcing special sales.



(The following rant is not related directly to Win's comments - which I find very interesting and relevant. It is also not meant to be a slam at anyone or their comments, I just think more information can help us to understand the real issues not just the superficial things)

Business in The Valley is tough but the towns are hardly indifferent to business - they are very well aware that they need them, Regulation is tough (but hardly anti-business or indifferent to business), also the regulations businesses are being held to were voted on by the whole town, and when towns enforce regulations it does not make them anti-business or harassing - they are just enforcing the agreed upon rules. Businesses have a choice - they can follow the regulations, they can break the regulations and face the consequences, or they can work to change the regulations. I see too many people opting to break them and then whine that they get slapped for it. The sinage issue is a perfect example... is it a frivolous regulation?, perhaps...but businesses know it is on the books and they can choose to follow it or not. A better option in my opinion would be to start a petition to remove or change it. Then the whole town can vote on it and be done with it.

From your remarks it seems you have only a little bit of information about the businesses you mentioned and why they have chosen to relocate. Allow me to add to that (and I am sure there is more that others can add)

SmallDog for example, that is a shame that they could not get an extended hours permit for retail operations, but when they chose that site for their operations they knew that it was zoned for a particular purpose (agricultural-residential - NOT retail). They knew there were going to be limitations on what and how they could operate and they chose to be there. They also bypassed a few hoops when they first opened and that left a bad taste in the select boards mouth. It should be noted that they did receive special dispensation for the retail hours they do have, so the town did work with them. One of the reasons that they did not receive permits to expand their retail operation was that the town did not want to get into the job of "spot" zoning because they felt it was not a fair way to operate (the boards actually like SD and their business model but felt it wrong to give preferential treatment that could open up pandora's box). There were also question as to Sprawl, if SD was allowed to operate a retail establishment in an area not zoned for it then anyone else could do the same. It was a Pandora's box the town did not want to open. I do think it should be revisited because they are a good business model for what the Valley should be.

Canus...had permits and was ready to move into the Waitsfield Business Park Their issues were not so much permit related. theirs were money and landlords. Also, Waterbury has a far better distribution set up than we do here in The Valley at the "end of the road" so to speak, with their access to the Interstate and rail.

Jakes...they did make Jake jump through a lot of hoops because he was located on a 'non-conforming lot' and in the end he did get permitting to expand. And when he did get his permits he sold. He also tweaked the town because he was not following his existing permits while asking for new permits, which lead to a longer process than was necessary.

As was brought up in a subsequent post

The VG parking... The previous owner bought the property knowing what the restrictions were on the property when he purchased it (which was to remove the two parking spaces in front). He chose to fight those permits. The town held firm on it's previous decision (prior to his purchase). So what should have just been a situation where new owner comes in and follows what his permits say he must do, it became a "pissing" match.
Which was too bad, because I think he could have had the town on his side to do some needed work to the road that accesses the VG, instead the rest of the people living on that road suffered in the cross hairs of the fight.

VT Canoe...they did receive permitting...Their biggest obstacle was their neighbors and it fell into an ugly fight.

The Moretown Quarry... opposition was really centered on Moretown residents, as they were the affected parties. It was hardly a whole Valley fight...in fact many conversations I have had with Waitsield and Warren residents and board members could be summed up by indifference.

All that said...business in The Valley is tough and it is even tougher when businesses and boards go up against each other. It doesn't mean that The Valley is anti business. I do think there can be more done to attract and retain businesses - tax incentives being just one. But just because someone whines loudly about not being able to do what they want with their business does not mean that they are right and the town is wrong.

Sometimes the town is wrong...sometimes they do screw things up...but I hear so much anti-business BS that when looked into is really the business just not wanting to follow the established regulations. If you feel a regulation is bad, work to change it.


Just a couple of cents worth.
Thanks

jkvt

random_ski_guy
03-27-2008, 05:50 PM
well jkvt, looks like you have killed this thread with all your facts and strict discipline to reasoning & logic. way to go. :x

jkvt
03-28-2008, 09:08 AM
well jkvt, looks like you have killed this thread with all your facts and strict discipline to reasoning & logic. way to go. :x

hehehe, hardly strict anything here :? I just think that there are definitely real issues in The Valley to find that balance between business and residential and tourism concerns and that getting bogged down in finger pointing for the sake of finger pointing doesn't help any of us get to the answers for the real issues. It is far easier to call anyone who doesn't appear to be on your side wrong than to try and put the name calling behind us and move forward.

I was looking at an older thread about restaurants where Win said we should look at the positive and not dwell on the negative; and while I think that on the surface that is a bit simplistic I do agree that a change in the way you look at things allows you to see new options and ideas for solutions. There is a Talmud quote to the effect that we do not see the world as it is, we see the wold as we are. So if we can change how we look at things we have a better chance of making what we desire.

Also anyone who knows me knows I love a good "discussion"; I feel that only through the crucible of debate can ideas be refined and made better. It may sound weird but I actually enjoy when someone points out a new way of seeing things that makes me rethink how I was looking at something.

jkvt