Via Community News Service, a University of Vermont journalism internship, for Shelburne News
SHELBURNE – The selectboard is weighing a proposal to increase Shelburne’s local option tax from 1% to 2%.
The increased tax, which would require voter and legislative approval, could be levied on local sales, rooms, meals and alcohol in order to support the fiscal year 2027 budget.
The town finance committee last month recommended that the selectboard pursue the increase but some local business owners are already opposed.
Kevin Clayton, the owner of Village Wine and Coffee, would be directly impacted by the potential increase.
“It directly taxes everything we sell in the shop,” Clayton said. “We’re just getting taxed to death.”
In an economy that already feels uncertain for him, Clayton said a potential local options tax increase would only make things more challenging for him and his customers.
“Overall, you’re doing everything you can do to retain your customers,” Clayton said. “Do we really need to chuck another 1% on top of what we already have? When is enough enough?”
Shelburne voters approved the current 1% local option tax back in 2023. Shelburne Town Manager Matt Lawless said that raising the local option tax could help prevent the potential for property tax increases.
“[The local option tax] is roughly $1 million a year of additional local revenue,” Lawless said. “If the revenue were not there, the property tax rate would have to be significantly higher to earn the same revenue back.”
Some business owners have expressed concerns that increasing the tax could reduce shopping in Shelburne. Lawless said while he understands these worries, there has been no evidence of this occurring in Shelburne since the 1% local option tax was approved three years ago.
Under Vermont law, municipalities can pass local option taxes of 1% with local voter approval. But increasing the amount to 2% currently requires legislative approval as well, although the Vermont League of Cities and Towns is seeking to eliminate that requirement.
Several dozen Vermont towns have 1% local option taxes, according to the Vermont Tax Department. More are considering establishing them, with proposals bringing mixed results.
Hinesburg and Bennington voted against the idea Nov. 3. Voters in Essex approved a 1% local option tax on rooms but said no to the tax on retail sales and meals.
Stowe residents voted to increase the town’s local option tax from 1% to 2% in March. However, the Legislature has not approved the increase and some lawmakers oppose the idea. If the increase is approved in Shelburne, town officials say it could help raise revenue to renovate and repair the Shelburne town office, town hall and the Pierson Building.
It’s important for local people including business owners to have a chance to air their views about the proposal, observers say.
“The business community is an important voice in this discussion,” said Josh Hanford, the director of intergovernmental relations at the Vermont League of Cities and Towns in Montpelier. “All across the board, it’s a perfect way for democracy to work at the local level. It’s the process working as it should work.”
Lawless expressed a similar sentiment.
“The public input on this idea is very important,” he said. “We want to hear from folks and what they have to say.”
The Shelburne Finance Committee discussed its recommendation on the increase at an Oct. 13 selectboard meeting, minutes show. The item was on the agenda for the Oct. 27 selectboard meeting but no action was taken. If the selectboard approves the proposal, it could potentially go to voters on the Town Meeting Day ballot in March 2027.