WEST WINDSOR — Two towns on the Vermont side of the Upper Valley will consider implementing local option taxes during this year’s Town Meeting.
Pomfret voters will consider all four taxes — meals, alcoholic beverage, rooms and sales — under one article, while West Windsor will vote on three separate articles: sales, rooms and meals, and alcohol.
Officials from both Pomfret and West Windsor said that they are proposing the taxes as a way to diversify revenue and take the burden off property taxpayers.
In recent years, health insurance premiums and paving costs, among others, have continued to rise, putting a greater burden on property taxpayers in Pomfret, Selectboard Chairman Benjamin Brickner said.
“The Selectboard has managed these pressures through careful budgeting, reserve funding, and capital planning,” Brickner wrote in an email. “But we reached a point where relying solely on property taxes is no longer sustainable.”
If the measures pass, the two towns would join Woodstock and Hartford among Upper Valley towns that have adopted local option taxes.
Royalton voters, meanwhile, last year narrowly rejected a local option tax on meals, rooms and alcohol.
In towns that have a local option tax, the state gets a 25% cut while the towns receive the remaining 75%.
Vermont also has a 6% sales tax, a 9% meals tax, 10% alcohol tax and a 9% rooms tax, which go toward funding state operations.
Combined, the local option taxes could raise as much as $105,000 for Pomfret, according to data from the Vermont Department of Taxes data and comparable towns, Brickner said.
Using $82,500 as an estimate for next year, Brickner said municipal taxes could rise around 6.5% as opposed to the 12.7% without the local option tax in the next fiscal year’s budget, which voters will be asked to approve during this year’s Town Meeting.
“The local option tax also asks visitors and consumers who benefit from town services — roads, emergency response, infrastructure — to contribute,” Brickner wrote in an email. “And it would give the town flexibility to invest in infrastructure and pursue state and federal grants that often require local match.”
The West Windsor Selectboard similarly hopes to capture some revenue from visitors to the town through the new taxes.
West Windsor has become a hub for outdoor recreation in the area, particularly through programs led by Ascutney Outdoors on Mount Ascutney, town administrator Matt Frederick said.
“It has become an event destination for outdoor sports, so we’re trying to capitalize on that,” he said in a phone interview.
The Selectboard decided to divide up the proposed taxes into three separate articles: Sales, rooms, and alcohol and meals. Alcohol and meals would each receive a separate 1% tax, but state law requires that they be passed together.
“We knew some of it would be more controversial than others, especially the sale of goods in town,” Selectboard Chairman Mark Higgins said in a phone interview, and the board wanted to give residents a chance to vote on each individually.
West Windsor could raise an estimated $7,700 from a sales tax, $10,350 from meals and alcohol tax, and $35,450 from a lodging tax, Higgins said.
If passed, all revenue from local option taxes would be “dedicated to offset capital expenses,” according to the articles on the town warning.
The new taxes could help the town keep up with the price of equipment for the town’s highway department, which has continued to rise over the years, Higgins said.
“The only way really, we have as a town to raise revenue is to raise real estate taxes. I don’t like it as a taxpayer” and neither do others in town, Higgins said in a phone interview.
Local option taxes could also help offset the cost of a new auditorium floor at Story Memorial Hall, which is used for dances, yoga classes and other community activities in addition to town business and needs to be replaced, Frederick said.
In 2023, the town got a $50,000 estimate for the project.
“I’m sure it has only gone up and we would really like to have to not raise that via taxes,” Frederick said, adding that local option taxes could help offset the cost. “It is 100+ years old and it can be sanded no more.”
Where to spend new revenue
Woodstock and Hartford have put revenue from local option taxes toward a variety of town projects.
Woodstock has had a local option tax on meals, alcohol and rooms since 2015 and a local option sales tax since 2024, according to a Vermont Department of Taxes map. Woodstock has used its local option taxes toward infrastructure improvements.
In the last fiscal year, Woodstock brought in $420,000 through its room, meals and alcohol local option tax and around $357,000 in its local option sales tax, municipal manager Eric Duffy said in an email. The money will go toward the town’s economic development director role, water system upgrades and a wastewater plant renovation, among other town projects.
Hartford has had a local option tax on meals, alcohol and rooms since 2017 and passed a local option sales tax last year that went into effect last July. Hartford has used the sales tax to reduce the tax rate and the other local option taxes toward town purchases.
This year, Hartford has $350,000 in local option taxes to distribute, which voters will weigh in on during Town Meeting voting. The Selectboard is asking voters to approve $137,500 to put toward reducing property taxes. Voters will be asked to distribute the remaining money among six projects, including purchasing equipment for the town’s public works department, life and safety improvements at the Bugbee Senior Center and resurfacing athletic courts at Maxfield Sports Complex.
The new tax proposals have detractors.
West Windsor resident Gregg Despart said he agrees that the cost of equipment and other capital expenses are rising and that the town needs to do something to address costs, but he worries that the taxes will make life more expensive for residents who live on fixed incomes. He noted that the sales tax will also apply to online purchases, which will likely affect residents more than tourists.
“I completely understand them wanting to do this,” Despart, who is retired, said in a phone interview. “I completely don’t agree with the way they want to do it.”
Instead, he’d like the Selectboard to pursue different ways of raising money including applying for more grants to cover projects such as the Town Hall auditorium floor and increase event permit fees.
“Instead of slapping a tax on at this point when we are in such bad shape tax wise in the state of Vermont, we need to tighten our belts a little bit and look at alternative ways rather than just tax, tax, tax,” Despart said.
Pomfret will host a Town Meeting informational hearing on Saturday, Feb. 21, at 9 a.m. at Pomfret Town Hall, located at 5233 Pomfret Road, and also on Zoom via pomfretvt.us. Voters can vote on the local option tax and other warning articles by Australian ballot on Tuesday, March 3, from 8 a.m. to 7 p.m. at the Pomfret Town Offices, located at 5218 Pomfret Road.
West Windsor residents will vote on the local option tax articles during a floor meeting, which will begin at 9 a.m. on Tuesday, March 3, at the Story Memorial Hall, located at 22 Brownsville-Hartland Road.