Waterbury voters handily pass charter questions including local option sales taxes

December 6, 2023 | By Lisa Scagliotti

Nearly 240 Waterbury voters took part in Tuesday’s vote to adopt a town charter that allows for local option sales taxes, passing both articles on the two-question ballot handily. 

Voting took place at the municipal offices in Waterbury on Tuesday. Photo by Lisa Scagliotti 

According to Town Clerk Karen Petrovic, 237 voters participated, representing 5.4% of the town’s 4,349 registered voters.

The first question asking whether the town should be allowed to levy a 1% local option sales tax passed 162-75, with 68% in favor. 

Article 1 would establish a 1% local tax on local sales, rooms, meals, and alcoholic beverages. Those taxes would be in addition to current state taxes in those categories which are 6% for sales, 9% each for rooms and meals, and 10% on alcoholic beverages. The local taxes would not apply to motor vehicle purchases, most clothing, groceries and medicine. The tax would apply to internet purchases, cannabis sales, and short-term rentals in Waterbury such as AirBnB reservations. 

Currently, 23 other Vermont municipalities have local option taxes including Stowe, Montpelier, Barre, Burlington, South Burlington, Shelburne, Williston and Winooski. 

The local sales taxes are a way for municipalities to generate revenue to pay for municipal expenses in addition to property taxes that rely on property owners. 

Article 2 on the ballot aimed to simplify the municipal hiring process. It asked voters to approve giving the municipal manager the main responsibility for hiring, appointing, disciplining and removing town employees. It allows the manager to authorize department heads to handle those tasks as well, and it specifies that the select board should approve department head choices. 

Waterbury Town Clerk Karen Petrovic (left) and Assistant Town Clerk Beth Jones (right) supervise the ballot box on Tuesday at the town offices. Photo by Lisa Scagliotti

Voters agreed with that, passing it 195-40 with 83% in favor. Two ballots were blank for that question, Petrovic noted in her election results Tuesday night.

Tuesday’s voter approval of the articles is the first of several steps needed at several levels of government before they go into effect. Questions regarding town charters require review and approval by the state legislature and the governor’s signature. 

Town officials scheduled the vote on the articles now in order to have them ready to send to the legislature when it convenes in January. 

Waterbury’s two state representatives, Democrats Tom Stevens and Theresa Wood, both supported the charter proposal ahead of the vote, particularly the local option tax question. “We as a community are missing out by not having the ability to have the local option tax,” Wood said during an informational meeting in October.

Stevens said they would see the articles through the process in Montpelier. He explained that the approved articles would be turned into bills that would be introduced in the House and likely sent to the Government Operations Committee. After a vote by the full House, they would move to the Senate for review and a vote, and then to the governor. 

Municipal Manager Tom Leitz in public presentations regarding the measures explained that if the articles cleared the local and state hurdles by next summer, the option tax item would still take several months to go into practice. It likely would not be in place until late 2024 or early 2025, he said, as the state Tax Department would need to implement it with the various businesses responsible for collecting the additional tax. 

The measure addressing the manager’s personnel authority would go into effect once approved at the state level. It aims to streamline an antiquated hiring process currently in place that involves appointed volunteer boards in hiring some municipal positions. One example is the position of zoning administrator. The state statute Waterbury has relied on in the absence of its own charter calls for the planning commission to review applicants for that position. Ironically, Leitz pointed out in advocating for the clarification, the zoning administrator works mainly with the town development review board. 

Leitz on Wednesday said he was pleased to see the results of the vote. “I’m hopeful the legislature will take up the matter quickly,” he said of the next steps.

Calculations based on limited data available about local sales led Leitz to estimate that the 1% local taxes could result in approximately $650,000 in revenue in 2025 to help cover town government expenses without raising property taxes. For comparison, he explained that generating that much income from the property tax would require 8.26 cents per $100 of assessed property value on the town tax rate, Leitz noted. That would translate to $247 on a tax bill for a home valued at $300,000.  

Town officials have discussed how the additional revenue might be spent such as paying down debt, making capital purchases, and investing in flood-mitigation measures. 

For example, the Fire Department in 2024 will ask voters to approve purchasing a new truck. Leitz has suggested that the purchase could be covered by the new tax revenue. Another example is the town road-paving budget which has remained flat for the past several years while the cost of asphalt has increased 40%, essentially curbing the amount of paving by the Highway Department. 

Leitz said that when he arrived at work on Wednesday, he met town Public Works Director Bill Woodruff at the door. “The first thing I said to him was that I was hopeful we could add a few hundred thousand to his future paving budget,” he said.