PROPOSED LOCAL OPTIONS TAX-LUDLOW
ARTICLE 5: Shall the voters of the Town of Ludlow authorize the collection of a 1% Local Option Tax on sales, rooms, meals, and alcohol pursuant to 24 VSA § 138, the proceeds of which shall be used as follows:
- Fifty percent (50%) of projected revenue will be used as general fund to reduce the municipal property tax rate.
- Residual balances will be directed to an infrastructure reserve fund pursuant to 24 VSA § 2804 (a) for future projects recommended by the legislative body and approved by the voters at a regular or special meeting.
FACTS FOR CONSIDERATION:
- Pursuant to 24 VSA § 138 (c) & (d) (Equal Educational Opportunity Act of 1997) taxes imposed under this authority are collected and administered by the Vermont Department of Taxes.
- The Town of Ludlow receives 70% of the collected tax (State of Vermont retains 30%) on a quarterly basis less a “per return” transaction fee of $4.172.
- Based on the last two tax years ending 6/30/2014 & 6/30/2015 it is estimated that the Town of Ludlow would receive (NET) +/- $600,000.00/ year for additional general fund revenue.
- On that basis taxpayers in the Town of Ludlow could expect a reduction in tax rate of approximately $0.02—– $40.00 on a $200,000.00 assessment; $100.00 on a $500,000.00 assessment; etc.
- Funds dedicated to infrastructure improvements, contingent on receipts, could save an additional $0.02 to $0.03 or more on future tax rates.
- Residual balances in the infrastructure reserve fund, subject to voter approval, can be used for capital spending projects such as paving, sidewalks, building improvements, equipment upgrades, etc.
- These funds, with voter approval, could also be used to reduce debt service payments on major projects such as Walker Bridge, or the Commonwealth Avenue Drainage project that would most likely be financed with long term bonds.
- Local Option Taxes are currently being collected in the “Ski (Gold) Towns” of Stowe, Killington, Stratton/Winhall & Dover as well as many of the larger Cities and Towns.
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