Senate Committee delays Stowe charter vote after debate over second 1% local-option tax

The Senate Committee on Government Operations on May 26 debated a proposed charter amendment that would allow the town of Stowe to add a second 1% local-option tax on sales, rooms, meals and alcoholic beverages and direct half of that revenue to the town and half to a new Local Option Municipal Transportation Special Fund. The chair postponed a committee vote as members argued about the amendment’s process and its implications for state taxing authority.

Representative Jed Lipsky, sponsor of the charter change, told the committee he had been surprised that the House Ways and Means amendment altered the revenue split from an earlier 75/25 proposal to a 50/50 split without prior notice to sponsors. "Half a loaf is better than no loaf," Lipsky said, describing the change as an imperfect compromise but noting it was not what the town voters originally approved.

A Joint Fiscal Office estimate presented by Chris Roop put first-year revenue (partial FY27, with an assumed Oct. 1 start) at roughly $3.2 million and a full-year FY28 estimate at about $4.9 million from the additional 1%. Roop said Stowe would receive half of that revenue and the other half would go to a new municipal transportation special fund that would be appropriated in the Senate transportation (T) bill and distributed to towns under the existing town highway aid formulas.

Committee members pressed on fiscal details and precedent. One member argued the measure would help towns fund roads and bridges and could reduce property-tax pressure in many communities; another objected that allowing a municipality to add an extra local tax for transportation "undermines the taxing authority of the state" and sets an unwelcome precedent. The dissenting member said statewide transportation needs should be funded through statewide revenue decisions rather than town-specific levies.

The committee clarified that the $4.9 million figure reflected projected revenue from the additional 1% alone, and speakers noted that the actual total will vary with tourism, weather and economic conditions. Committee members discussed how the special fund would be allocated using the statutory town highway aid distribution formulas based on class 1/2/3 road mileage.

At the chair’s prerogative, the committee did not proceed to a binding vote and instead put consideration on hold because of process concerns and a looming floor schedule; the chair said the panel may reconvene later in the day or after the floor session to take up the measure. No formal motion was adopted and no vote tally was recorded.