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Newport Considers Alternative Commercial Tax Structure

December 28, 2011

Newport City Zoning Administrator Paul Dreher. Photo by Christopher Roy

NEWPORT CITY – Someday commercial property in the designated downtown may be worth more than the buildings that sit on it.
During the Dec. 19 Newport City Council meeting, City Manager John Ward Jr. said he, Mayor Paul Monette and Zoning Administrator Paul Dreher met with University of Vermont Professor Gary Flomenhoft to engage with a preliminary study of the potential positive impacts of a Land Value Taxation system as an alternative to the conventional municipal taxation system.
At the meeting, the council gave the okay for the free study to continue.
As it is now, taxes increase when property owners improve their buildings, but property owners who let their buildings go in disrepair see a decrease in taxes. The intent of a reformed tax structure is to give property owners an incentive to fix up their buildings and not see a tax increase.
“Some people are holding to their empty store fronts, waiting for the deal of the century,” Dreher told the council. “They’re (the buildings) appraised at $300,000 and they’re going to turn around and sell them two years from now for $10 or $11 million when the biotech is in place. They don’t have any incentive to do anything with the properties because their taxes are so low.”
Communities elsewhere in the United Sates that have done this have seen improved economic development and healthy growth, Dreher said.
The problem with the proposed taxing system is that it is not legal in Vermont, at least not yet. Dreher has asked the Department of Housing and Community Affairs to look into changing legislation.
Smart Growth Vermont and the Vermont Land Conservancy will strategize with Newport. The UVM Department of Applied Economics will do the research at no cost.
“The state wants to change the policy,” said Dreher. “It’s a win-win for everybody.”
The legislature will probably not take up the issue until at least the 2013 session.
If passed, Newport could become a pilot city for the system.
The new taxation system would not affect non-commercial properties in residential areas.

ORLEANS–The Lake Region Lady Rangers opened their season with a 2-0 win over Enosburg on Wednesday...
NEWPORT–The North Country boys soccer team kicked off their season on Tuesday, as they played host...
The 2015 Lake Region Soccer Previews will be available to read in the Express on 9-1-15.

 

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