Why is there a tax increase for TOV?

This is in response to a question about why taxes will increase as a result of merger and if the questioner’s understanding of my prior post is correct. I will answer the latter first. Yes, the increase is cumulative adding up to a couple thousand dollars over 13 years and, yes, this is effectively a permanent increase unless future Selectboards make significant changes, budgets are voted down or other sources of revenue are found.

Regarding why taxes will increase, the Village of Essex Junction has a proposed budget for fiscal year 2022 of $5,629,978. To pay for this budget, the Village Trustees will need to levy a tax on Village properties in the amount of $3,737,566. It is this amount that, if merger is approved, will be spread across all Town properties. While municipal taxes outside the Village go up over 13 years, municipal taxes in the Village will go down until the Village and TOV tax rates meet somewhere in the middle. The Town model says that a Village home assessed at $280,000 will see a tax decrease in the range of $567 – $674 or $44 – $52 per year each year. Please note that this may or may not be offset by other tax increases. Using the actual average Village assessment of $254,435, the range of tax reduction in the Village is $515 – $612 or $40 – $47 per year each year.

It should be noted that the rest of the Village budget comes from other revenues of $346,532 which comes from fees and such and a direct transfer from the Town budget of $1,545,880 which is part of the current Town tax rate. To be very clear, these numbers come from the current proposed FY22 Village budget which has not yet been approved by Village residents.

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