Flemming: Property tax limits — a modest proposal from 46 states

By David Flemming

Vermont has the 4th highest property tax rate in the country, at 1.76%, according to research from the Tax Foundation. We are second only to New Hampshire among the New England states, which has a property tax rate of 1.89%. (New Hampshire however, has no income tax and no sales tax). We are one of only four states which don’t have place limitations on property tax hikes. Hawaii, New Hampshire and Tennessee are the others.

Thirty-six states, including Massachusetts, have a “rate limit” cap on the overall rates that can be set by local policymakers, but do not shield properties from increases due to rising values or from other policies designed to increase collections.

Thirty-five states, including Massachusetts, Rhode Island and Maine all have a “levy limit,” which constrains the total amount of overall property tax revenue a government can raise.

Nineteen states, including Connecticut, have an “assessment limit,” which restricts the amount an individual homeowner’s taxes can rise due to increases in a home’s assessed value.

These three types of limits are not mutually exclusive. Colorado, Arkansas, Arizona, Illinois, Michigan, Montana, New Mexico and Texas have all three.

Deciding where to cut spending in order to lower that hefty 1.76% property tax rate to make Vermont more economically competitive with other states will be tough. In the meantime, considering one of the three popular property tax limitations seems like a good place to start.

To see the Tax Foundation’s analysis, click here.

David Flemming is a policy analyst for the Ethan Allen Institute. Reprinted with permission from the Ethan Allen Institute Blog.

Image courtesy of Flickr/401kcalculator.org

7 thoughts on “Flemming: Property tax limits — a modest proposal from 46 states

  1. David,

    Very interesting information. I have been a tax accountant in VT for 25 years and I did not know this. Explains a lot. Obviously this is a result of schools being primarily financed with property taxes and our 4th in the nation per pupil spending.

    BTW, the recent Tax Structure Committee report includes a strong recommendation to replace the school property tax with an income tax. Out of the frying pan and into the fire.

  2. Why even bring up New Hampshire (other than to make yourself feel better)? It is a huge mis-comparison as the author well knows (and hides the substantial difference in his parenthesis).
    Poor, poor writing.

    • Bring up NH, precisely because it is our twin state, Same, Same Same, except important opposites

      Basically twice the population, and about half the bureauocracy,
      Creating a wonderful and vibrant economy, and max freedom for it’s citizens.

      It is not that NH is a shining example, it is that Vermont is such a dismal ecpensive demanding example

      • Yes, the above is absolutely true, but one of the most important differences looms in the forefront : Property tax money in N H STAYS in the town/city it is collected in. NONE goes to the state for any reason.
        This is huge, because once money goes to the state of VT, with very few exceptions, it is gone, gone, gone.
        In VT there is never enough money, in N H they are on the verge of a very appropriate tax cut, which will in the long run bring more money to the state. That is the way these things work, Vermont has not learned that concept yet. They cannot even let go of Military Retirement Tax; Tax Dept is a bunch of thugs of the first order, along with the legislature.

        • My Hall, thank you – you are absolutely right. We tend here to vote for the content of a person’s character as Mr. King admonished us years ago. We are blessed with a healthy conservatism balanced fairly well with a pretty honest and intelligent liberalism.
          We are also blessed (and totally different than Vermont) in this,
          “… The General Court is the fourth-largest legislature in the English-speaking world, behind only the British Parliament, the United States Congress, and the Parliament of Canada respectively; and the New Hampshire House of Representatives is also the fourth-largest individual chamber (exceeded in number by the United States House of Representatives, the British House of Commons and the British House of Lords).[12] The legislature at one time grew to 443 members due to population growth, but a 1942 constitutional amendment set its size at from 375 through 400 members.[13] There is one representative for about every 3,300 residents.[14] In order for the U.S. Congress to have the same representation, there would need to be approximately 99,000 representatives.” Wikipedia.
          Vermont has successfully consolidated power in the liberal Chittenden County and it environs at the expense of the two party system.

      • Mr. Richmond, I grew up in and lived in Lyndonville, VT, lived in East Burke for over 10 years as well but moved to Littleton 14 years ago. I am 75 and spent most of my life in Vermont. In my experience, I can assure you we are not twin states, save for being adjacent. There is no comparison in almost any way, between the two, even the topography is substantially different, as well as are our inhabitants and their view of the world.
        That was lens I was commenting with.
        I love living in NH!

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