Vermont veterans work for uniform property tax break for disabled soldiers

From the Vermont Press Bureau:

Lou Lertola is a man on a mission.

From his home in South Burlington, the retired Army command sergeant major has launched a statewide campaign to help disabled veterans receive the maximum property-tax exemption allowed under state law. Aided by a team of geographically scattered volunteers – nearly all of them veterans – Lertola says it's time for every Vermont community to do right by its wounded servicemen.

"I guess I just got hung up on this because I was disappointed more communities didn't see the light of day and do something," Lertola says. "This is about saying 'thank you' to someone who deserves some thanks."

Vermont is home to about 2,200 disabled veterans who qualify for property-tax exemptions, but a quirk of state law means the benefit differs wildly from town to town. Some disabled veterans enjoy tax-free status on the first $40,000 of property value, while others get a break on only the first $10,000.

"The state didn't make this across the board, so we have to go town by town," Lertola says.

In 1971, the Vermont Legislature passed a law mandating the $10,000 exemption, which applies to both education and municipal taxes. Subsequent laws, passed in 1991 and 2005, upped the allowable limits to $20,000 and then $40,000, respectively, but left it to individual towns to determine whether they wanted to offer the increased exemption.

Other residents of towns that adopt the higher limits are collectively responsible for making up the forgone revenue, which generally results in slightly higher tax rates.

More than 60 towns remain at the $10,000 limit; another 60 or so have adopted the $20,000 threshold.

Lertola was himself unaware of the new limits until he saw towns around South Burlington begin to adopt the $40,000 threshold in 2007.

"I went to a meeting of the city council and said, 'What about us?'" Lertola recalls. "No one knew what I was talking about, and I think people were a little uncomfortable and embarrassed that we hadn't done something."

Having succeeded last year in getting his own town to raise the limits, Lertola decided to broaden his efforts, lobbying select boards around the state to put the item on their own town meeting agendas. If local elected officials refuse to place the question on the ballot, Lertola tries to find town residents to start a petition drive. Obtaining the requisite number of signatures will automatically land an item on a town meeting ballot.

The exemption is only for veterans with a "50 percent" disability – a designation made by the Veterans Administration. Their ranks comprise only a small percentage of the approximately 60,000 veterans living in Vermont. But Lertola, who is not among the disabled, says it's an important gesture nonetheless.

"It's the right thing to do, it seems to me."

But judging by the 63 towns that remain at the $10,000 limit, elected officials in many municipalities are reluctant to sign on. And some say the veterans benefiting from the $40,000 exemption might not even need the financial aid.

Paul Poirier, who sits on the Barre City Council, says councilors there unanimously rejected a request to place the $40,000 question on town meeting ballots last year. While the state allows the $40,000 exemption on school and municipal taxes, Poirier says, the towns are still responsible for raising the money. Whatever money disabled veterans don't pay, Poirier says, is shouldered by the remainder of the tax-paying populace, a burden councilors were loath to impose on residents.

"We had the same concern everybody else has in municipal government, and that's the growing amount of nontaxable property we're not collecting on," Poirier says.

From churches to state property to nonprofits, he says, Barre City is forced by law to extend tax-exempt status to a considerable portion of its grand list.

"It was our feeling that at this time we couldn't afford this cost-shift," he says. "We wanted to hold the line."

The financial impact on individual towns and cities depends on the number of qualifying veterans living there. In Montpelier, where city councilors last month agreed to place the $40,000 exemption on Town Meeting Day ballots next March, officials estimate the switch would result in about $10,000 in forgone revenue. City Manager William Fraser says it amounts to about two-tenths of a penny on the tax rate, or about $4 extra on a $200,000 home.

Montpelier, which currently has the minimum $10,000 limit, has nine qualifying veterans.

"It's a small price to pay. A very small price to pay," says George Stone, a Rutland veteran who's looking to land the new exemption limits on town meeting ballots in a number of communities in Rutland County.

Stone spent more than 40 years in the military and serves as an officer at American Legion Post 52 in Wallingford.

"The United States is probably the only country in the world that abuses its veterans, and that has to stop," Stone says.

Stone says he's particularly concerned about younger veterans suffering life-altering injuries in the wars in Iraq and Afghanistan.

"These are kids who weren't exactly treated the way they should be," he says. "And here's one small thing that we need to be doing for them."

For Lertola and Stone, the symbolism of the gesture is as important as the financial impact. But Steve Jeffrey, head of the Vermont League of Cities and Towns, says towns may want to consider whether the higher exemption is the best way to help those in need.

Disabled veterans making less than $90,000 a year won't see any difference in their tax bills, higher exemption or no, Jeffrey says. Under the income-sensitivity provisions of Vermont's property tax system, lower-income homeowners pay based on their earnings, not their land's value.

Jeffrey says it's worth asking whether voters should give up limited local resources to such financially comfortable beneficiaries.

"If the people who are going to benefit most from this are veterans who are earning that much money," Jeffrey asks, "then how much do we want to send a signal that we appreciate what they've done for their country versus their ability to pay?"

Poirier says a town's exemption limit isn't necessarily a measure of its patriotism or respect for veterans. Barre City has 43 qualifying veterans, the fifth highest number of any town or city in the state (Rutland City leads the state with 53).

"Barre is a big veterans' community. We have a Veterans Day parade, a Memorial Day parade," says Poirier, whose father served in World War II. "There isn't a person I know that serves in elective office here that is not supportive of veterans. It's just an issue where we felt we had to make a decision to hold the line on taxes."

Lertola says he won't rest until all Vermont towns join the 125 that have voted in recent years to raise the exemption to $40,000.

"I am who I am and I get hung up on things every once in a while. I'd keep chasing my tail if I was a dog," Lertola says. "And this is one of those issues I feel I can do something about."