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Local Tax Takes Effect In Burlington - WCAX.COM Local Vermont News, Weather and Sports-

Local Tax Takes Effect In Burlington

Burlington, Vermont - July 1, 2006

Burlington has waged a political movement for alternatives to the property tax for the last 25 years. In the 1980's the city won a franchise fee on utilities, in the1990's a gross receipts tax on bars, restaurants and hotels that's added onto the state rooms and meals tax. And now, as of Saturday, a tax of one cent on top of the state's six percent sales tax.

Burlington's Chief Administrative Officer, Jonathan Leopold, said, "The benefit this year is that we were able to balance the budget without significant cuts in vital services like police and fire."

Leopold says the one-cent sales tax will raise $1.6 million a year, bailing the city out of a precarious financial position. One-half will be set aside for the city's fund balance, a reserve kept for emergencies which fell dangerously low. The other half helped meet the budget for fiscal year 2007, which started Saturday.

Former Mayor Peter Clavelle won local passage of the tax and lobbied the legislature for its approval as a city charter change even after his final term as mayor expired. "Mayor Clavelle deserves a lot of credit for his foresight in bringing this proposal forward to the voters and I think that both the voters and the state of Vermont, which had to approve this, recognized how important it was," said Leopold.

Burlington Business Association Director Nancy Wood says she doesn't think the local sales tax will make Burlington less competitive overall. At least, that's the hope - that the extra penny won't drive retailers out of the city. She also says business, too, has an interest in a financially viable city.  "We certainly are not in favor of increased taxes," she said. "At the same time, Burlingt6on businesses do receive a lot of services. We have great fire protection and police protection. We like to do our part if we can. But we certainly like to see fiscal responsibility."

In a city where the budget went up by six and a half percent this year due to rising expenses, city officials say the sales tax should prevent the same kind of shock - at least in the near future. 

"With the sales tax this year and our plan for next year's budget, we're really looking at being able, I believe, to balance the city budget for the next two to three years -- maybe even four years -- without a tax increase," said Leopold.

Burlington's new tax mirrors the state tax. Clothing and footwear at a price tag of under $110 is exempt. That's not the case in Williston and Manchester, the only other Vermont towns with a local sales tax. Those local option taxes were enacted through a different law and do not exempt clothing. So quite a few Burlington merchants are happy for the break they got.

Andy Potter - Channel 3 News.

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