Bennington Select Board Reviews 1% Option Tax Ahead of November Vote

Last updated: August 19, 2026

BENNINGTON, Vt. NewsWK — Bennington residents are weighing a proposed 1 percent local option tax that could generate an estimated $1.8 million annually for municipal needs and property tax relief. The proposal, which is slated to appear on the Nov. 3 ballot, drew widespread discussion during a recent Select Board listening session focused on how the tax would function and where the money should go.

Town Communications Coordinator Jonah Spivak presented an overview of the state program to community members during the meeting. Under Vermont law, the measure would add a 1 percent tax to general retail sales, meals, lodging, and alcoholic beverages purchased within town lines. Under updated state rules, Vermont returns 75 percent of the collected revenue to the municipality while retaining 25 percent.

Why it matters here

For Bennington taxpayers, the proposal represents a significant potential revenue stream that could offset municipal operating costs and alleviate pressure on residential property tax bills. Because the tax applies to hospitality, lodging, and dining, supporters emphasize that out-of-town visitors would contribute a meaningful share of the revenue, especially with major local destination projects in development.

At the same time, the extra percentage point applies to everyday purchases made by local families who shop, eat out, or purchase supplies in town. With household budgets already stretched by inflation and daily living costs, the central question for many residents is whether the long-term community benefits will outweigh the additional cost at the register.

Competing views on economic impact and tourism

Several residents spoke in favor of adopting the measure, pointing to upcoming regional investments such as the planned resort redevelopment on the former Southern Vermont College campus and the historic restoration of the Walloomsac Inn. Proponents argued that these destinations will bring thousands of guests who are already accustomed to paying higher sales and lodging taxes in neighbouring states.

Susan Wright, an Old Bennington resident and member of the village Board of Trustees, noted that the community has major opportunities ahead. “I think residents won’t feel it that much either. And it’s a small price to pay in order to make our wonderful town even more wonderful,” Wright said during the public listening session.

Other residents argued that revenue figures could expand well past initial projections once hospitality projects come online. Mike Bethel urged the Select Board to capture that revenue but insisted that the town make a firm commitment to use the funds to reduce the local tax burden.

“And if we don’t take advantage of that, and this option tax, we are stupid. But I want two-thirds of it, or around there, to go to relieve the property taxes. People do need some relief,” Bethel told board members.

Questions surrounding state fees and resident tax burdens

Not all attendees favored the measure. Business owner Jerry Albert raised concerns about the state keeping a portion of the tax proceeds, questioning the fairness of an administrative fee structure where the state retains 25 percent of the funds before distributing the remainder back to Bennington.

Sharon Stepp, a resident and former state tax department employee, expressed concern for lower-income households and seniors living on fixed incomes who rely on homestead credits. Stepp noted that local residents would feel the extra cost during everyday routines, pointing out that Manchester has had a local option tax in place since 1999.

Resident Sean-Marie Oller cautioned that inflation in food, utility, and insurance costs is already straining household finances. Oller also noted that municipal summaries describe potential uses of the revenue rather than guaranteeing exact funding amounts, arguing that taxpayers need firm commitments on how the dollars will be allocated before voting.

Draft spending rules and property tax relief targets

To address public questions about oversight, the Select Board is reviewing a draft policy outlining how the funds would be managed. Key provisions of the draft proposal include:

• Depositing all option tax revenue into a dedicated, separate town fund.
• Requiring a formal vote by the Select Board at a warned public meeting before allocating any funds.
• Holding at least two public hearings prior to setting spending priorities during the annual budget cycle.
• Allocating no less than 50 percent of the revenue toward reducing the municipal property tax burden.
• Directing remaining funds toward capital infrastructure, public safety equipment, debt reduction, economic development, and emergency reserves.

Next steps for voters

The Select Board is scheduled to continue its review of the option tax policy and draft guidelines during its regular meeting on Aug. 24. Registered voters in Bennington will make the final decision when the question appears on the ballot for the Nov. 3 election.