Rutland County leaders roll up their sleeves

Vermont Business Magazine, Jun 01, 2005 by Barna, Ed

Some may have looked on this from afar as a stunt to draw attention, but both Killington and the anti-tax home of Live Free Or Die have proceeded in all seriousness toward the town's secession. As of midMay, a bill in the N.H. Legislature to establish a commission that would work toward an interstate agreement to that effect had passed the House and been passed 3-0 out of a Senate committee.

For such a change to take place, the legislatures of both states would have to agree, and the US Congress would have to sign on. New Hampshire Senator Robert Odell, R-Lempster, chairman of that body's Economic Development Committee, told the Manchester Union Leader that he felt Killington had a strong case. Speaking of testimony by Killington Select Board chairman Norm Holcomb, he said, "When he told us that the town sent $10 million to the state and got back $1 million, but it still wasn't enough to run the schools, I thought this was a terrible situation."

Legally, Killington is basing its case on Article 7 of the Vermont Constitution, which says government must be for "the common benefit, protection, and security of the people, nation, or community, and not for the particular emolument or advantage of any single person, family, or set of persons who are only part of that community." In pursuit of this, "the community hath an indubitable, unalienable, and indefeasible right, to reform or alter government, in such manner as shall be, by that community, judged most conducive to the public weal."

When a Vermont legislator introduced a bill to require Killington to pay an exit fee upon leaving, Town Manager David Lewis observed that the state might actually owe Killington money. In any case, he said, setting a price to leave was "an endorsement that our effort to secede is legitimate."

Legitimate, maybe; financially advantageous, definitely. The Town hired Northern Economic Consulting's Richard Heaps and Arthur Woolf to examine in detail the monetary effects of changing states. Their findings were that for Fiscal 2005, Killington would have paid $7.7 million less in personal income taxes; businesses would have saved $3.5 million by not sending off sales and use taxes; property taxes, though generally higher across the Connecticut River, would turn out to be less in total for Killington; and New Hampshire's Business Enterprise Tax and Business Profits Tax would only have taken $770,000.

Businesses and residents would both see "a substantial financial gain," the consultants said. Under various scenarios the total savings would range from $7 million to $12 million, and "a point estimate of $9.5 million per year is well within expectations."

That state view, expressed by the Supreme Court, has been that the Education Fund can be used for anything that will "support education" (Killington has charged misuse of the fund); the Legislature had the power to change Act 60 and Act 68 regardless of any promises not to do so; and taxpayers do not have the right to sue the state, which they were doing in effect through the town.