Transfer tax compromise wins at Little Compton FTM

Voters reject proposed school budget cut

By Tom Killin Dalglish
Posted 5/19/16

LITTLE COMPTON — Town electors at their annual Financial Town Meeting (FTM) last Tuesday voted for a compromise on the issue of taxing property transfers, nixed a school budget cut, then lowered their tax rate for next fiscal year while raising the amount of the tax levy. They did it all in just about an hour.

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Transfer tax compromise wins at Little Compton FTM

Voters reject proposed school budget cut

Posted

LITTLE COMPTON — Town electors at their annual Financial Town Meeting (FTM) last Tuesday voted for a compromise on the issue of taxing property transfers, nixed a school budget cut, then lowered their tax rate for next fiscal year while raising the amount of the tax levy. They did it all in just about an hour. 

First to be acted on was the compromise. Electors voted for a change in the property transfer tax paid to the Little Compton Agricultural Conservancy Trust (the Ag Trust), that, effective July 1, will exempt all property transfers from the tax where the property is valued at less than $300,000, and will impose a tax rate of 4% on the value of the property over that exemption threshold

Second, on school budget matters, by a decisive voice vote, the 275 voters present rejected a proposal by Joe Quinn — Chairman of the Little Compton Taxpayers Association (LCTA) and a former member of the town school committee — to cut $85,866 from the school budget — or as Mr.Quinn put it, "to level fund" the town's contribution to the schools for next year as compared to the current year.

Thiurd, they approved a levy (revenues from property taxes) of $11.63 million (rounded) for FY17, up 4% from the $11.19 million for FY 16. That's an increase of $439,912 more than last year.

But while the levy went up, the tax rate went down, because the value of property in town has gone up. 

Taxes on a $300,000 home, for example, will go down from FY16 to FY17 — from $1,725 to $1,701, a $24 difference.

The transfer tax compromise

Two transfer tax proposals faced the voters going in to the FTM, but at the meeting itself, clearly as a result of before-the-meeting discussions with the Ag Trust, Larry Anderson, who had presented the first transfer tax proposal as Article #6 to the voters, offered a compromise, and agreed to the recommendation made by the Ag Trust.

The transfer tax on sales of real property in town is paid by the buyer, to the Ag Trust, and is not part of the town budget, so it doesn't operate as an impact on real estate taxes.

In simplest terms, Mr. Anderson's first proposal would have set an exemption threshold of $225,000, and would have taxed above that level at 3%.  

The Ag Trust proposal, on the other hand, would have set the exemption threshold at $300,000, and would tax at 4% above that benchmark.

"I'm prepared to accept the Ag Trust amendment," Mr. Anderson said on the floor, when he offered his amendment to the assembled voters. Mr.Anderson moved to amend his original article to conform to the proposal offered by the Ag Trust.

In effect, under the compromised version, with the exemption threshold set at $300,000, more people (buyers) would presumably benefit than would have under Mr. Anderson's earlier proposal, which would have  set an exemption level of $225,000. 

At the same time, buyers of homes valued above $300,000 would pay a transfer tax of 4%, which is higher than that (3%) proposed originally by Mr. Anderson. More revenues would be generated for the Ag Trust under the compromise proposal than would have resulted from Mr. Anderson's original proposal. 

The trade off, in other words, was more people (buyers) benefitting from exemptions under the compromise in exchange for more revenues for the Ag Trust from taxes above the exemption levels.

"I do believe that a reduction in the transfer tax burden could have a concrete and meaningful, if modest, effect on housing affordability, both for younger individuals and for older pruchasers with reduced or fixed incomes," Mr. Anderson said in offering to amend his proposal.

"We appreciate Mr. Anderson's willingness to comporomise," said Bill Richmond, The Ag Trust's Vice-President, when he took the floor to respond and to second Mr. Anderson's motion. "We support his amended article, and we urge the asembled electors to do the same."

When Moderator Scott A. Morrison called for a vote a few minutes later, the voice vote sounded almost unanimous. 

"That went much smoother than I anticipated," Mr. Morrison said, in announcing the outcome.

The school budget amendment rejected.

Mr. Quinn's proposal, to "level fund" the school budget, as he put it, by reducing the proposed budget by $85,866 due to declining enrollment, had much to do with class size projections and numbers.

"Small class size is not good for the kids," he said. We have a a per pupil cost that's the highest except for Block Island, he said. "The fact of the matter is we need to conslidate some classes."

"It wouldn't be an FTM if our former school committee member hadn't made the amendment he offered," said School Committee Chairman Tom Allder, who spoke against Mr. Quinn's amendment. "Having a small class size works," he said. Mr. Quinn's amendment, to take $85,866 out of the budget, "serves no purpose."

Jeremy Allen, another speaker, rose from the bleachers to take the microphone. The $85,866 budget cut Mr. Quinn proposes, he said, would save 5 cents for every $1,000 of value on our homes. So if your home is worth $600,000, he said, Mr. Quinn's proposal would save you $31 in taxes, and if your home is worth $2.5 miillion, it will save you $130. 

Nicholas Long spoke from the floor, comparing class at Wilbur & McMahon to those at Phillips Exeter Academy, which has class sizes of 12, he said, just the number that fit around a long table in the classroom. 

"It seems to me if Exeter believes classes can be 12 students, it's good enough for the rest of us." he said.

"I don't understand why the school budget would be increasing in the face of precipitous declines in school population," said Roger Lord, Secretary/Treasurer of the LCTA .

When the voice vote was called shortly after, Mr. Quinn's motion was loudly defeated. 

The meeting was called to order at 7:15 p.m., with well over the quorum of 151 voters present (Mr. Morrison announced 265 voters in the room at the time, but another 10 showed up later). The Town Charter requires 5% of the 3,010 registered voters to be present in order to conduct business.

While Mr. Morrison presided as Moderator, he announced that Suzanne Madden was also present, as assistant Town Moderator, having been recently appointed by the Town Council on March 24. The meeting adjourned at 8:22 p.m., just minutes after the final vote on the budget.

Budget Committee election

Before, during, and for half an hour after the meeting, voting took place for two new Budget Committee members. There were four candidates for two vacancies. After voting, the two highest vote-getters became elected to the committee.

The candidates, and the order in which they finished, were: Jennifer L. McHugh (133 votes), Jeffrey Z. Snyder (125 votes), John F. McJennett, III (72 votes), and Stephen E. Bristol Jr. (50 votes). 

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