Ways & Means hearing maps how Vermont calculates PILOT payments and flags CLA effects

Montpelier — Officials from the Department of Taxes and the Agency of Natural Resources on Wednesday detailed how Vermont’s two payment-in-lieu-of-taxes (PILOT) programs are calculated, and why the common-level adjustment (CLA) and differing valuation methods have produced notable shifts in town payments.

"The payment is based on the total assessed value of state owned property in a municipality multiplied by the CLA ... multiplied by 1% ... and multiplied by the adjusted municipal tax rate for the municipality in which the property is located," said Ted Rowan, a staff member presenting PILOT calculations to the Ways & Means Committee. Rowan and tax department staff explained that the state operates two distinct PILOT streams: a general pilot that compensates municipalities for state-owned buildings and a separate ANR (Agency of Natural Resources) pilot that covers conservation land.

Committee members were shown why the two programs use different valuation bases and revenue sources. Rowan said the general pilot uses insurance replacement values maintained by the state and then adjusts those values with the CLA so the state figures align with local grand lists. The general pilot is funded from 30% of local option tax revenue after a per-return administrative fee to the Department of Taxes; that percentage split was established by Act 215 of 2005, officials said. The ANR pilot, which covers state-owned conservation land, is funded mainly through the general fund with an interdepartmental transfer; officials said roughly 80% of ANR pilot funding comes from the general fund and 20% from the…