When the federal government postponed the tax filing date to July 15, Vermont did the same because state taxes are based on federal taxes. However, while these income taxes are postponed, property taxes are not and are due on the usual schedule.
Some portion of these property tax payments will certainly also be delayed due to financial hardship. But towns are still required to make scheduled payments into the Education Fund, or face fairly stiff penalties. In light of this, the Legislature has taken a couple of actions. One is to give towns the option to waive penalties and late fees on overdue payments. The other is to allow towns to borrow from banks and credit unions in order to make their scheduled Education Fund payments, and the state will use federal relief dollars to pay the interest on those loans so that towns will bear no additional expense.
I supported both actions to prevent financial burden on our communities, but I am unsettled that our method of providing relief for Vermonters ultimately means transferring money to banks. To be sure, banks play a critical role in the state economy, but at times like this I sure wish we had a State Bank to keep that money working in Vermont for Vermonters. In the last two sessions I have introduced bills to establish a State Bank, to no avail. I will keep my eye on this issue.