Voters in at least 19 towns and cities across Vermont weighed new municipal taxes on some combination of meals, rooms, alcohol and sales this Town Meeting Day, with mixed results.
While local officials were largely supportive of the measures, which they said would direct new revenue into much-needed community projects under increasing financial pressure, some constituents expressed concern over rising fees for themselves and visitors.
But most municipalities that considered imposing such 1% tax increases on top of existing state levies this week passed them. Following a 2024 law on the subject, such action no longer requires a state-approved charter change. Those that did impose the tax increase will keep 75% of the resulting revenue to cover local expenses.
More than three dozen communities already had similar taxes, raising more than $50 million last year between them, according to a state Joint Fiscal Office report. The same report underscores the widely varying effects that local option taxes have on municipalities depending on economic attributes like tourism and retail presence.
The towns that approved such items were Bolton, Bristol, Fair Haven, Mendon, Morristown, Pittsfield, Pomfret, Stowe, Swanton, Vergennes, Waitsfield, and Westmore. Castleton, Chester, Hardwick, Londonderry, Milton, and Roxbury rejected their proposals. West Windsor approved an increase on rooms, meals and alcohol taxes but rejected the same suggestion for sales tax.
Ian Albinson, who sits on the Bristol Select Board, said he had been an advocate for the measure since “the beginning.” He helped the town arrive at an annual revenue estimate for the proposed tax — roughly $250,000 — and make plans for its use.
Unusually, Bristol has already earmarked 20% of its new cashflow for “climate resilience and emergency preparedness.”
“With the most recent news coming out with regard to FEMA requests that were being denied for Vermont, we were hesitant to rely on that funding for possible future emergenc(ies),” Albinson said.
The Federal Emergency Management Agency recently denied Vermont recovery funding after major damage from last summer’s flooding.
Bristol will also direct some new revenue toward economic development initiatives in town, which Albinson called a “no-brainer,” but will reserve 40% of the funding for infrastructure projects.
But elsewhere, specific initiatives failed to convince voters.
In Londonderry, where town officials already levy such a tax on meals, rooms and alcohol, an additional measure for sales tax failed, even though much of the revenue would have been used to decrease residents’ property taxes.
And in Chester, where officials had planned to support the town’s housing commission with fees on rooms, meals and alcohol, voter concerns prevailed.
“There’s a recognition that that money is needed,” said Chester Town Manager Julie Hance on Wednesday morning. But residents were concerned that this particular tax was the wrong way to pay for it, she said.
Primarily, local business owners “felt like even adding 1% was going to be a hindrance to people wanting to go out to eat in Chester or to rent a room in Chester,” Hance said.
This vote sends town leadership “back to the drawing board” she added.
Officials have often framed local option taxes as a way to share the tax burden on residents with visitors or tourists in the area, an idea that gained more traction elsewhere in the state. It’s a vision Bristol’s Albinson shares with Stowe Town Manager Charles Safford.
Stowe is unique among communities weighing local option taxes this year, as its ballot asked to double town taxes from a 1% levy on sales, rooms, meals and alcohol to 2% for each. Safford said the new tax rate would mean a total of roughly $3 million in new revenue.
Stowe’s thousands of yearly visitors “use our infrastructure and our services,” Safford said, adding that the town “feels a lot of tax pressure,” particularly as the area’s property values rise. He said the new fees are “a way to spread the load.”
Stowe’s proposal requires a town charter change, and thus approval from the Legislature. But the measure cleared its first hurdle Tuesday, passing by solid margins of voter support.
For Safford, who echoed much-argued concerns that Stowe’s state tax contributions are largely recirculated across the state, it’s also an issue of local control.
“They have a golden dome on their state Capitol,” he said of officials in Montpelier. “We don’t have one on our town hall.”
Theo Wells-Spackman is a Report for America corps member who reports for VtDigger. This story was republished with permission from VtDigger, which offers its reporting at no cost to local news organizations through its Community News Sharing Project. To learn more, visit vtdigger.org/community-news-sharing-project.