Tax Fairness Ad Hoc Committee

City Council - Tax Fairness Ad Hoc Committee Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Zoom Info: https://zoom.us/j/99773581882 Webinar ID: 997 7358 1882 1. Agenda Subject 1.1. Motion to amend/adopt agenda Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 1. Agenda Department Department of Finance and Administration Type Action Procedural Recommended Action Motion to adopt agenda. 2. Public Forum Subject 2.1. PUBLIC FORUM - Verbal Comments Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 2. Public Forum Department Department of Finance and Administration Type Action Procedural 3. Summary from Mayor's Tax Fairness Working Group Subject 3.1. Summary from Mayor's Tax Fairness Working Group Page 1 of 14  Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 3. Summary from Mayor's Tax Fairness Working Group Department Department of Finance and Administration Type Information Recommended Action 4. Discussion on Committee Priorities Subject 4.1. What initiative(s) does the Committee want to focus on? Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 4. Discussion on Committee Priorities Department Department of Finance and Administration Type Discussion Recommended Action Subject 4.2. What additional information does the Committee need? Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 4. Discussion on Committee Priorities Department Department of Finance and Administration Type Discussion Recommended Action 5. Scheduling Subject 5.1. Scheduling for future meetings. Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 5. Scheduling Department Department of Finance and Administration Type Discussion Recommended Action 6. Adjournment Page 2 of 14 Subject 6.1. Motion to adjourn Meeting March 30, 2026 - Tax Fairness Ad Hoc Committee - Monday, March 30, 2026, 12:00 PM, Sharon Bushor Conference Room, Ground Floor, City Hall OR remotely via Zoom Category 6. Adjournment Department Department of Finance and Administration Type Action Procedural Recommended Action Motion to adjourn. Page 3 of 14 Tax Fairness Working Group Review MARCH 30, 2026 Page 4 of 14 Overview - The Tax Fairness Working Group convened in late January 2025 - The group met eight times from January through August - Produced a written report with five recommendations with varying levels of support Homestead exemption 10 support, 2 support further engagement and research Splinter tax simplification 8 support, 4 support further research and engagement Tax rate by classification 8 support, 4 support further research and engagement Municipal property transfer tax 7 support, 5 support further research and engagement Municipal Income based credit and rental rebate 4 support, 5 support further research and engagement, 3 do not support Page 5 of 14 Tax Fairness Working Group Scope + Objectives The Mayor's Tax Fairness Working Group will provide analysis + recommendations to the Mayor for how the City of Burlington can create a more equitable tax system. Offer recommendations for creating a fairer tax system to make our tax system more 1 equitable among all taxpayers, more affordable for low and moderately incomed people, and more sustainable revenue generating system with clear steps for actualization. Identify problems with our current tax system and identify goals for a more equitable 2 tax system. 3 Review relevant financial data. Provide analysis for how any recommended changes would affect different 4 categories of residents (homeowners and renters; different income levels) and commercial property owners Provide analysis on budgetary impacts of any recommended changes, both short- 5 term and longer-term Page 6 of 14  Tax Fairness Working Group Members + Staff Group Members: City Staff: • Mark Barlow, City Councilor, North District • Bradley Kukenberger, Director of Finance, • Joe Kane, City Councilor, Ward 3 Clerk/Treasurer’s Office • Karen Paul, Former City Council President, Ward 6 • Erin Jacobsen, Chief of Staff, Mayor’s Office • Steph Yu, Community Member • Erik Ramakrishnan, Assistant City Attorney • Emily Eley, Community Member • Joe Turner, City Assessor • Missa Aloisi, Community Member • Nancy Stetson, Senior Policy and Data Analyst, Innovation and Technology • Pacifique Nsengiyumva, Community Member • Gil Livingston, Community Member Page 7 of 14 Meeting Structure Meeting #1, January 30: Meeting #5, May 29: Overview of Scope and Vermont Tax Exploration of specific proposals System Meeting #6, June 26: Meeting #2, February 19: Burlington income data from state, Comparison of Tax Systems and Reforms report plan Meeting #3, March 27: Meeting #7, Aug 14: Goals for Fairness, Overview of Assessment Report review and feedback Process, Modeled Tax Reform Options Meeting #8, Sept 10: Meeting #4, May 1: Final review of report Discussion of Reform Proposals Page 8 of 14  Impact Dashboard A dashbaord was built to approximately explore the impact of possible reforms on actual Burlington properties. Link Here Page 9 of 14 Reforms Recommended Exemptions, homestead and universal • An exemption reduces a property’s value by some amount • The committee discussed both an exemption limited to homestead properties or applied to all properties in Burlington, but recommended limiting the exemption to homestead properties • The committee focused an exemption of $30 - $50k, though larger exemptions were discussed. • Common in other jurisdictions Splinter tax simplification • Reduce the number of splinter tax rates • Allow inflation adjustment for revenue neutral rates • Possibility of altering the order of budget approval and rate setting to match other Vermont towns Page 10 of 14 Reforms Recommended Classification by Property Type • Tax rate varies based on a characteristic of the property. • The City currently uses this method to tax commercial properties 20% more than residential. • The committee discussed creating multiple categories at various rates, or taxing second homes at a higher rate • Tax rates based on classifications are fairly common in other jurisdictions. Property Transfer Tax • Impose an additional tax upon the sale of property, in addition to the existing state property transfer tax Page 11 of 14 Reforms Recommended Municipal Property Tax Based on Income • Current state system reduces education property taxes up to an annual income of $115k, municipal taxes up to an annual income of up to $47k • Committee discussed the possibility of increasing the subsidy on municipal property taxes to higher levels of income • During the course of the committee, the state legislature passed Act 73, which would change this system to income-based exemptions • Committee discussion focused on feasibility and city capacity, possibility of aligning with state Page 12 of 14 Other Reforms Discussed Municipal Income Tax • Replace or augment the municipal property tax with an income tax • Discussion focused on implementation challenges at the city level • A few jurisdictions in the country have municipal income taxes Tax Rate by Value Level • Sets a lower tax rate for low value properties and a higher rate for higher value properties • Creates a cliff where a property directly below the cutoff receives the largest tax reduction Land value tax • Splits the tax rate into a lower, or zero, rate on the value of buildings while increasing the rate on the value of the land • This tax structure creates an incentive to develop underused properties. • Rarely implemented in other jurisdictions. Page 13 of 14 Page 14 of 14