Get Full Government Meeting Transcripts, Videos, & Alerts Forever!
Get email alerts on the Pilot Special Fund topic
No spam. Unsubscribe anytime.
JFO briefs committee on pilot special fund: payments concentrated in Burlington and Montpelier as local-option taxes expand
Summary
The Joint Fiscal Office presented data on the pilot special fund (payment in lieu of taxes), showing a fund balance of about $10.3 million at FY2024 year-end, recent revenue excess driven by local-option taxes and meals/rooms recovery, and concentration of payments in municipalities that host state or university facilities.
Ted Barnett and a Joint Fiscal Office analyst briefed the Appropriations Committee on the pilot special fund, which compensates municipalities for the assessed value of state-owned buildings and, separately, for conservation land acquired by the Agency of Natural Resources.
Barnett explained the program's mechanics: the pilot special fund receives 30 percent of local-option tax revenue (rooms, meals and sales taxes) after a processing fee, and the statutory pilot calculation relies on three inputs — total assessed replacement value of state buildings, the common level of appraisal (CLA) adjustment and an adjusted municipal tax rate. He noted the fund historically was prorated because revenue previously lagged demands, but that since fiscal 2022 revenues have outpaced pilot payments and the fund balance at the end of FY2024 was roughly $10.3 million.
The presentation showed pilot payments concentrate in a small number of municipalities — Burlington (UVM-related properties), Montpelier and locations with state university properties — while many towns receive relatively small sums. Barnett told the committee the January 2024 uptick was driven by stronger sales and consumer spending after the pandemic and a growing number of municipalities adopting local-option taxes after a 2023 statutory change made implementation easier.
Committee members asked about the program's statutory caps (for example, a $750,000 cap cited for UVM properties), how additional properties or campus purchases are handled and whether the pilot fund should maintain a reserve to guard against revenue downturns. Staff said the appropriation calculation and reserves are technical policy choices and offered to provide an illustrative calculation and additional documentation to the committee.
Committee members asked for JFO to provide the issue brief and example calculations for members ahead of further deliberation.
