Tax rate less than predicted

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The new Maple Leaf Treatment Center in Colchester has appealed its assessed value to the Board of Civil Authority in an effort to retain its tax exempt status. (Photo by Jason Starr)

The new Maple Leaf Treatment Center in Colchester has appealed its assessed value to the Board of Civil Authority in an effort to retain its tax exempt status. (Photo by Jason Starr)

By Jason Starr

The Colchester Selectboard set a tax rate of 54.4 cents for every $100 of assessed property value on June 28, an increase of less than 1 percent over the fiscal year that ended June 30.

The increase will cost the owner of a $300,000 home, the average in Colchester, an additional $10 on his or her annual property tax bill.

The increase is about half the 1.3 percent increase town officials estimated before Town Meeting Day in March, when they request voter approval for a $12.1 million budget, an increase of 2.4 percent. Voters approved the budget by a roughly 2-to-1 margin.

Contributing to the lower-than-expected tax rate is higher-than-expected growth in the grand list, a measure of the taxable value of property in town. The town plans for a 1.86 percent grand list increase over the previous fiscal year instead of the 1.1 percent projection in March.

Assessor Bob Vickery undertook a reassessment of the office space on Water Tower Hill earlier this year that resulted in about $16 million in new taxable value. Before the reassessment, the town taxed those properties at 80 percent of their market value, he said.

Of the 426 properties that received reassessment notices, 42 appealed to the board of listers, and two furthered their appeals to the board of civil authority.

One is the office space at 302 Mountain View Rd., where the town reassessed the property to $4.8 million. The property was sold to WTH Partners LLC in March for $5.2 million, Vickery said.

The other appeal pending before the board of civil authority is the Maple Leaf Treatment Center, an outpatient addiction treatment facility at the Fanny Allen medical campus on Route 15 across from St. Michael’s College.

The space was previously exempt from property taxes when it housed an elderly services operation called PACE. The town is attempting to collect property taxes on Mapleleaf on an assessment of $1.6 million. Vickery expects that appeal will end up in court.

Colchester chief financial officer Aaron Frank dialed back the fiscal year 2017 grand list growth projection based on the potential for Maple Leaf to retain its tax-exempt status. If the two appeals are denied, the grand list would grow by about 2 percent over last year.

“We are cautiously very optimistic about the increases, and we have reflected a significant amount of them,” he said. “But Maple Leaf is a revenue risk to the town that may go through litigation.”

“The burden of proof if property owners wish to be exempt is on the property owner,” Vickery added.

The less-than-1-percent tax rate increase follows a 5.4 percent tax rate decrease from the previous fiscal year, which resulted from new revenue from a local 1 percent sales tax instituted in 2015. Excluding last year, one has to go back five years to find a tax rate lower than in FY17.

The municipal tax rate is only part of the tax bill equation. On July 1, the Vermont Department of Taxes set a statewide homestead educational tax rate of $1.41 per $100 of assessed value.