During the 2006 Vermont legislative session, a significant change was made to the property tax adjustment system.
In an effort to simplify the prebate/rebate system of the statewide property tax, the Legislature, in Act 185, decided to send the individual property taxpayers' adjustments to their town or city to be adjusted on their tax bills.
So beginning this year, Vermonters who qualify for a prebate/rebate will no longer receive a tax adjustment check from the Vermont Department of Taxes. Rather, the municipalities are receiving that money and are applying that money directly to Vermonters' property tax bills. Not surprisingly, this modification has caused a great deal of consternation among Vermont taxpayers.
In 2006, most Republicans and all the Democrats present for the vote supported this change. However, a significant privacy concern was raised even at that time specifically that the new system would allow for sensitive data regarding household property tax prebates and rebates to be in the public domain. Those who voted for the bill believed the committee when it reported that household incomes would be masked by various reporting options. The hope was that as the new system was developed for implementation, those concerns would be addressed. It became clear, however, before the 2007 legislative session began, that the privacy of Vermonters' financial information was going to be jeopardized.
In essence, under this new tax adjustment system, property tax bills will be adjusted at the municipal level to include the state payment. As a result, details of prebates and rebates are now available in any town office as a public record, and any individual or organization can request the information under Vermont's public records law. The public data reveal just how much an individual is receiving in state assistance, and this information can be used to calculate, with a high degree of probability, the household income of a property taxpayer.