By BOB MARTIN
Eagle Times Staff
SPRINGFIELD, Vt. — While the official tax rate cannot be calculated until after June 30 when the towns receives the education tax figures from the state, Springfield Town Manager Jeff Mobus said as long as the town approves the local option tax article (Article 6) there will only be about a four cent increase on the tax rate.
“That would be fantastic,” Mobus said. “The local option tax, I think, is a viable option for diversifying the revenues of the town. A lot of the meals and rooms tax revenue will come from people not living in town. Town residents do eat at the restaurants, but they draw people from other communities. Of course, outside visitors stay in hotels.”
Article 6 is to see if the town will authorize the assessment of a 1% local option tax on rooms and meals. The proceeds would be applied as General Fund revenue to reduce the municipal tax rate. Most of the burden would fall on residents coming in from other areas. An example the town uses is that $1 would be added onto a $100 meal.
Mobus said this is a way to diversify the revenue stream for the town, and to a small degree reduce the burden on property tax owners.
Mobus explained to the selectboard on Monday night that an audit showed that there was a surplus, and what he has done the last couple of years is take the surplus from the previous year to collect taxes. He explained that they have the surplus, but not necessarily the cash.
Mobus told the selectboard that that in FY23 there was a large surplus of $750,000, so they are bumping up the amount to give back to the taxpayers. There was $200,000 more in unbudgeted revenue that year, and he said this was the first year that “interest rates started really popping.”
He explained that $10,000 was budgeted in interest, and there were also American Rescue Plan Act (ARPA) funds coming in, so there was $2.6 million in the bank in interest. This meant the town made an extra $100,000 in interest alone. He said it is added up piecemeal, but the extra revenue was a pleasant surprise.
Mobus told the selectmen that “unbudgeted revenue is every accountant’s best friend,” and in this case it will be to help reduce the tax rate and get money back to residents.
“I think using the surplus to bring down the tax rate is a great thing,” Mobus said. “If we have extra money from the taxpayers, we should be returning it to the taxpayers. To me that is logical, and we should be doing it, and we’ve been doing it the last three years.”
Mobus is recommending that $300,000 be used from the fund balance to bring down the tax rate, which would make it an estimated six cent increase.
If the town approves Article 6, the tax rate will go down to about a four cent increase, making it a 2% increase overall.
In the ensuing years, Mobus proposed using $250,000 and then $200,000. Mobus said this procedure has worked well the last three years, and the numbers are just higher this time around.
“I think that it is a nice way to moderate the tax increase, give the people back their money for services they didn’t receive, which is how I categorize vacancy savings,” Mobus said.
A report by the Springfield town offices stated that the town has been working to increase the Grand List and reduce the tax rate alike. The grand list is a list of property and taxable personal property in town used to raise taxes.
“Springfield has faced a 2.64% decline in the Grand List over the past decade, despite two real estate appraisals,” the report stated. “In 2023, the Grand List stood at $661 million. This decline leads to higher tax rates.”
The town is investing in economic development to grow the Grand List. This is through expanding middle-income housing, as well as attracting businesses and supporting the ones they have to grow. Springfield is investigating what other towns in Vermont have done, as well.
A public information session will be held at Springfield High School on March 3 at 7 p.m., where there will be reports from town and school officers and committees to discuss the articles on the town and school district meeting warning.
Residents will have a chance to vote on Article 6, and other items including the town and school budgets, at the annual town and school district meeting on March 4. Voting takes place at the Riverside Middle School Gymnasium from 8 a.m. to 7 p.m.
