LUDLOW, Vt. – During the October Ludlow Selectboard meeting, the possibility of instituting a 1% options tax was first brought to public attention. Discussions will continue in the upcoming Selectboard meeting but a vote will not be expected, should the Selectboard choose to bring the suggestion to the public, until the annual town meeting in March.
Ludlow Municipal Manager Scott Murphy also expects that several special meetings will be scheduled specifically for the public to discuss the issue in the months leading up to March’s town meeting. Murphy wants the public to be clear that there is plenty of time for public input and ongoing discussion before anything is decided.
The 1% local options tax is an additional 1% tax that is added to four different categories: meals, rooms, alcohol, and sales. Projected revenue for the town with the 1% local options tax would be approximately $563,000 based on 2017 figures according to Murphy. Approximately 20 towns in Vermont currently implement a local options tax with a little over 30% going to the state and approximately 70% going to the town.
The measure was defeated in Ludlow in 2016 by 13 votes. If the Selectboard decides to put the measure again before the voters, they want to make sure that voters are well informed. Murphy said that he just wants to encourage people to come out and talk about it. “I’m hoping the voters at least have a good discussion about it,” he said.
To bring the options tax to the voters, the Selectboard will have officially decide to move forward with the plan and then schedule informational meetings with the hospitality industry and citizens for their input.
For now, the Selectboard is in an information-gathering phase and will look at how other towns are using the tax among other public concerns. Some towns such as Barre have identified very specific categories, stipulating funds be used “solely for street and sidewalk reconstruction.” Other towns such as Williston use the funds only to reduce property taxes. Montpelier stipulates the funds be used for economic development and infrastructure. Other towns use a combination of several categories. All these options are something Murphy wants the public to be aware of and discuss at length.
Murphy in particular wanted to dispel the idea that the options tax was somehow linked to the upcoming vote for the school building on Nov. 12, saying that the purpose for the funds have not been identified and will ultimately be up to the voters.
Murphy has had some experience with the options tax. As town manager of Wilmington, he has seen the concerns and the benefits of an options tax first-hand. Murphy said that in his experience initially the hospitality industry was against the tax but once it passed they became one of the bigger advocate groups in support of the measure. He said they saw it had no effect on their customers but could see how much money was available to offset projects around town that improved the town experience overall.
The 1% local options tax is on the agenda at the Nov. 4 Selectboard meeting at the Town Hall at 7 p.m. The public is encouraged to attend.