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Tunbridge to Weigh Farmer Tax Relief

Corey Chapman of Tunbridge speads hay for his cows at Chapman Family Farms in Tunbridge, Vt., on Feb. 20, 2014. Chapman, who rents his farm and owns a house a few miles away in Tunbridge, says the proposed dairy contract would not give him a tax break, since he doesn't own his farm, but it may affect him as a homeowner if the contract raises taxes on non-farm properties. 
(Valley News - Sarah Priestap)

Corey Chapman of Tunbridge speads hay for his cows at Chapman Family Farms in Tunbridge, Vt., on Feb. 20, 2014. Chapman, who rents his farm and owns a house a few miles away in Tunbridge, says the proposed dairy contract would not give him a tax break, since he doesn't own his farm, but it may affect him as a homeowner if the contract raises taxes on non-farm properties. (Valley News - Sarah Priestap) Purchase photo reprints »

Tunbridge Town meeting will be held at 10 a.m. on Tuesday, March 4, at the Tunbridge Central School to consider 14 warning articles. The school budget meeting will be held at 7:30 p.m. at the school on Monday, March 3.

Tunbridge — Residents at Town Meeting will debate a proposal to ease property taxes for farmers in a bid to stem the decline of dairy farming in Tunbridge.

Under a “dairy farmers contract” proposed by the Tunbridge Planning Commission, r esidents who earn two-thirds of their family income from farming could opt out of the state’s current use program if they are enrolled in it, and enroll instead in a tax stabilization program through a contract with the town, said Rudy Ruddell, a town lister who will present the proposal at Town Meeting.

It is also possible that a farmer could participate in both current use and tax stabilization, depending on whether the town adopts the program, and how it administers it.

Similar programs are in place in Stowe and Waitsfield, where a farmer must decide between the dairy farmers contract or current use, which taxes agricultural or timberland under its productive value, as opposed to market price.

In Brattleboro, farmers can be enrolled in both current use and a local tax stabilization program, said Ruddell. The Brattleboro plan “zeroes out the assessment on the farmer’s land and buildings,” he said. In other words, a farmer in Brattleboro would basically pay no municipal tax to the town, but still be responsible for the school tax.

Under the Tunbridge proposal, farmers who entered the contract would have to pay a penalty if they developed land in the program.

There are currently seven working dairy farms in Tunbridge with four more that abut or lease land in town, Ruddell added.

“If we look at the amount of land actively farmed by dairy farms in this community, it’s pretty clear what gives the community the flavor that it has,” he said.

Still open to question is whether the program would be limited to dairy farmers, or whether other kinds of farming, such as sheep, poultry or a mix of operations, would also be eligible.

It’s also unclear what the financial impact of such a dairy contract might have on nonfarming residents, who are already essentially subsidizing the statewide current use program. There will be upcoming meetings to flesh out a proposal, Ruddell said.

A hidden benefit, said Ruddell, is that once a town starts to develop more infrastructure costs and services, taxes almost always go up, whereas a town that still has open, undeveloped land may see lower expenditures.

“In terms of long-range planning, it’s cheaper for a town if it stays less developed,” he said.

In terms of Tunbridge’s proposed budget, residents can expect their taxes to go up this year because of a host of rising costs, including insurance and liability, according to Ann Fragnella, the town treasurer.

The general fund budget, which includes revenue from other sources, is estimated at $553,942, with $330,317 to be raised by town taxes. The highway budget is estimated at $741,844 with $632,544 to be raised by town taxes. (The general fund was, until this year, called the Selectboard Fund. The Selectboard elected to change the name because, Fragnella said, “it’s a better way to describe what that fund does.”)

Last year’s municipal tax rate of 65 cents per $100 of valuation is estimated to rise to 70 cents, Fragnella said. On a median home value of $250,000 this would mean a tax of about $1,750. For a taxpayer, this represents an increase of about $125 from last year.

Reasons for the rise in expenditures and taxes include rising liability, casualty and equipment insurance rates, Fragnella said. Unemployment and workman’s compensation insurance rates have also risen, she added. The Selectboard also made adjustments to the payroll to bring salaries more into line with current rates.

“Most everybody was way underpaid,” Fragnella said.

Town offices coming up for election include one auditor, one seat on the Selectboard and two listers, said Helen O’Donnell, a lister who plans to run for re-election. Attempts to reach possible candidates for the Selectboard were unsuccessful. Nomination for school and town offices in Tunbridge are from the floor.

Other issues on the warning include whether to establish a reserve fund not exceeding $10,000 per year to help with unexpected expenses that arise, and establishing a separate reserve fund to replace a fire truck not exceeding $30,000. An additional article on the warning asks town residents to consider the establishment of a public bank in Vermont, an issue currently being studied in the Legislature.

Monday evening’s school budget meeting will address the fact that schools statewide are facing increases in school taxes due to a change in Vermont’s education funding formula, said Tunbridge School Board chairwoman Lorinda Oliver.

The Tunbridge Central School budget shows an estimated increase of $28,615 from last year, or just under a 1 percent increase, said Donna Benoit, business manager for the Orange-Windsor Supervisory Union.

The overall student population over is up almost 2 percent over the past teo years, which is good news, she said. The projected tax rate, based on data from the state, will rise from $1.34 to $1.40, roughly a 4.5 percent increase. This would mean a $3,500 tax on a home worth $250,000 for homeowners who aren’t in the state’s income sensitivity program

“I think this will be a challenging year for many schools across the state,” said Oliver, citing such rising expenses out of the town’s control as special education and an estimated 7 cent increase in the base statewide property tax rate.

“We recognized that the tax rate for town would go up and so our responsibility was to minimize the impact of the tax rate,” Oliver said.

“Any reduction we make is going to have an impact so it’s a matter of doing our best to be careful and selective in areas we did reduce. It’s an extremely tight, frugal budget,” she said.

There will be a reduction in the area of the school’s library services, she said.

What has become apparent in the six years Oliver has been on the School Board, she said, is that the state’s current education financing model is not effective. “It’s not working for us.”

Oliver said there is a financial case to be made that it is less costly to the town to keep the school running than to close it. She noted that there are other conversations taking place around the issue of education financing, including consolidation of supervisory unions and changing the financing model from one based on the value of property to one based on a person or family’s income.

Nicola Smith can be reached at nsmith@ vnews.com