The Burlington, Vermont, City Council approved a change to the city’s gross receipts tax, which some councilors called a regressive move.
The council’s Ordinance Committee proposed a temporary increase from 2 to 2-and-a-half percent until June 30, 2026, for the tax imposed on businesses, restaurants and bars.
Ward 2 Progressive Gene Bergman explained that the intent is to keep the city budget stable as leaders work to close an $8 million shortfall.
“What we have here is a good and sensible approach to maintain the status quo and not blow up the budget. We built a budget based on the actions we’re taking in this proposed ordinance and there were a number of other changes that we still have in committee and those are meant to harmonize our gross receipts tax with the state equivalent tax,” Bergman said.
The council ultimately approved the temporary increase 10 to 1, with one councilor absent. But the measure garnered some debate as several council members expressed reservations.
Ward 6 Democrat Becca Brown McKnight opposed the increase in the tax because she said there is no accompanying help for impacted businesses.
“We’ve sort-of hitched our budget wagon, so to speak, to this gross receipts tax without unrolling an equivalent support or strategic overlay that helps deal with all the challenges our local business economy is facing,” McKnight said.
Ward 7 Democrat Evan Litwin said he supported the temporary tax increase, despite agreeing with Councilor McKnight, who cast the only nay vote.
“It is an incredibly marginal number. It’s a fraction of a cent. However, I actually am in agreement that we need to do more,” Litwin stated. “We will continue to lose businesses whether to construction or to crime and disorder and open drug use if we do not start to see it as the crisis of the day that it is.”
Ward 8 Progressive Marek Broderick called it a regressive tax that impacts consumers more than businesses.
“I wouldn’t consider it a tax on businesses because it is offloaded onto the consumer. It’s a regressive tax with no care to one’s means.
Still, he supported the measure.
“I am supporting this for two reasons. One because we are out of time in regards to the budget and secondly it is indeed marginal. But I would like to see the city in the future moving away from these regressive taxes on consumers,” Broderick explained.
South District Democrat Buddy Singh said he would vote for the measure because the budget was dependent on the gross receipts tax adjustment.
“I do think we should revisit this again next year. It does certainly influence businesses choices of whether or not they want to locate in Burlington. Gross receipts is a valuable tool for this city for its budget but we have to find ways to increase the economic vitality of this city,” Singh said. “Businesses who rely on high volume and a small margin are hurt a lot by this and those are the businesses that have been the backbone of this community.”
Mayor Emma Mulvaney-Stanak chastised some councilor’s hesitancy to support the increase in the gross receipts tax as city leaders look to close the budget gap.
“It’s disappointing to me the tools for which we need to bring online, including updating this gross receipts ordinance to fulfill the balanced budget that we all got to an agreement on is now facing perhaps a lack of support by certain councilors,” Mulvaney-Stanak said. “The gross receipts were going to support a possible business mitigation support fund and saying specifically we will make sure gross receipts is a piece of that revenue to support that fund. There are a lot of things that can help move this city forward, not only making sure it’s affordable and we support local businesses, but make sure we follow through on good faith compromise.”
