Hartford voters to decide on retail sales tax and tenant protections

By PATRICK ADRIAN

Valley News Staff Writer

Published: 01-11-2024 9:00 PM

WHITE RIVER JUNCTION — Proposed revisions to the Hartford town charter would create a local sales tax on retail purchases and authorize the Selectboard to regulate the rental housing market — such as restrictions on tenant evictions or a cap on rent increases.

Hartford voters will be asked at the annual Town Meeting in March to consider several amendments to the town charter — which will be divided into three separate ballot questions.

The Selectboard will hold two informational meetings — one on Jan. 23 and another on Feb. 6 — to explain the proposed charter revisions and to hear public feedback.

The proposed revisions were developed by a seven-member committee authorized by the Selectboard in 2022 to review the town charter and recommend changes.

One ballot question asks voters to consider creating a 1% local sales tax on retail items, which will include recreational cannabis.

The proposed sales tax is primarily aimed to collect revenue on retail cannabis, according to the charter committee co-Chairman F.X. Flinn.

Hartford already collects a 1% local tax on rooms, meals and alcoholic beverages — which is permitted, as well as a retail sales tax, by Vermont statute VSA 138.

“If we want to capture any cannabis money, we need to impos6e the 1% local sales tax, which will apply to more than just cannabis,” Flinn said in a written explanation to the Selectboard.

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Vermont does not currently provide a local option to tax cannabis sales exclusively, though a sales tax on all retail would include cannabis.

Town Manager John Haverstock said in an email on Wednesday that the Selectboard has been seeking to diversify its revenue sources and to lessen its reliance on property taxes.

“The Selectboard is well aware that New Hampshire does not have sales taxes and that Lebanon and its many retailers are right across the river,” Haverstock said. “However, the Town already has 1% local option taxes in place on rooms, meals and alcoholic beverages.”

Flinn estimates that a local sales tax would generate at least $654,000 in revenue for the town, which does include cannabis sales.

White River Junction currently has two operating recreational dispensaries — The Tea House on Woodstock Road and Five Seasons Cannabis Company on Bridge Street. In addition, White River Growpro, a gardening supply store on South Main Street, is opening a dispensary named Hidden Grove next to its downtown location at the end of this month.

Growpro co-owner Stephanie Waterman said she is opposed to the proposed local sales tax, both for cannabis and general retail.

“It’s already hard as a brick-and-mortar retailer to compete with internet suppliers and tax-free New Hampshire,” Waterman said in a phone interview on Thursday. “A local sales tax will put additional pressure on local businesses.”

Waterman noted cannabis is already taxed 20% by the state, including the 14% cannabis excise tax and the 6% retail sales tax.

Waterman worries that driving up the cost of cannabis through taxation incentivizes people to seek less expensive products from black market sources, which poses a potential safety risk to consumers.

The local options tax also might encourage prospective cannabis businesses to set up shop in communities that do not have such a tax, Waterman added.

According to the state Department of Taxes, 15 Vermont municipalities collect the 1% sales tax, including Burlington, Rutland and Manchester. None of the towns are in the Upper Valley.

Under the charter revision proposal, all sales tax revenues will be set aside in a capital reserve fund. Usage of these funds would require voter approval.

The revision also includes language that would permit the town to adopt a sales tax exclusively for cannabis retail should Vermont establish one in the future.

Another ballot question asks voters whether to authorize the Selectboard to regulate rental housing, which would enable the board to consider laws protecting tenants from being evicted without reason or from excessive rent increases.

This change would provide the Selectboard with a pathway to consider a “just-cause eviction” ordinance — a local law that would prevent landlords or property managers from evicting tenants without a warranted reason or adequate notice.

Just-cause eviction laws “provide secure guidelines so that everyone knows what the rules are” for tenant removal, explained Tom Proctor, a housing rights organizer for the Rights and Democracy Project in Burlington, an advocacy group for equitable communities.

“As long as a tenant pays rent on time and follows the rules of the lease, the tenant will know that they will be able to stay in their home,” Proctor said in a phone interview on Thursday.

Mike Davidson, of Ledgeworks, said in an email on Thursday that he is sympathetic to tenants who lose their homes because of the expensive housing market — which has sometimes incentivized landlords to evict tenants so that the properties can be sold or upgraded.

But landlords also need the ability to evict problem tenants whose living habits or property neglect may pose a nuisance or safety issues for other tenants, Davidson said.

“The proposal is well-intended, but it will degrade some of Hartford’s housing stock and neighborhoods,” Davidson said. “We believe (just-cause evictions) would be a mistake for the Hartford community.”

At a Selectboard meeting in December 2022, Beth Long, of Twin Pines Housing Trust, a nonprofit affordable housing developer, expressed concern that placing too many restrictions on landlords could unintentionally dissuade property owners from providing rental housing and exacerbate the current housing crisis as a result.

Proctor said that just-cause laws do not prevent landlords from evicting problem tenants. Instead, the intent of such laws is to ensure that tenants are only evicted or denied a lease renewal for a warranted reason, such as failing to pay rent or for violating the contractual rules.

“They provide clear guidelines so that the tenants know what the rules are,” Proctor said.

Proctor worked with the charter committee in 2022 on a charter amendment to create a just-cause eviction ordinance in Hartford.

But the Selectboard, concerned about requiring an ordinance in the town charter, narrowed the language to only grant the Selectboard the authority to make regulations — which will enable the board to discuss whether to pursue a just-cause ordinance.

The board said they wanted separate warrant articles for the sales tax and rental housing amendments so that voters could consider them independently from the other charter recommendations. At a Dec. 12 meeting, board members noted that these two issues may fail to pass, though voters may be receptive to the other charter changes.

The other proposed charter changes include a number of revisions pertaining to the town’s governing structure and process, such as duties and powers of elected officers or boards or committees. These revisions include a process to decide election ties, guidelines for submitting petitions for consideration at Town Meeting and an annual informational meeting to explain warrant articles that will be on the ballot.

Charter amendments, once passed by voters, must also receive state approval from both houses of the Legislature, as well as the governor.

In 2021, Burlington voters passed a charter amendment with just-cause protections, but it was vetoed the following year by Republican Gov. Phil Scott, who said the law could make landlords more hesitant to rent to prospective tenants. House and Senate votes to override the veto failed.

Voters in Essex and Winooski passed amendments with just-cause protections in 2023, which still await approval from the state.

The informational meetings on the proposed charter changes will be held on Tuesday, Jan. 23, and Tuesday, Feb. 6, at Town Hall. Both meetings will start at 6 p.m.

Patrick Adrian may be reached at padrian@vnews.com or 603-727-3216.