A landmark decision delivered on Friday, April 12 could test some of the tax hikes and fees the Vermont Legislature has passed or proposed.
The United States Supreme Court ruled unanimously in favor of California landowner George Sheetz in the case Sheetz v. County of El Dorado.
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George Sheetz, who sought to build a small home in El Dorado County, was subjected to a $23,420 fee ostensibly to cover the expansion of public roads aimed at easing congestion. Arguing that this fee was excessive and constituted a violation of the Takings Clause, Sheetz challenged the county's demand in state court. Ultimately, the Supreme Court took on the case.
The Court determined that the Fifth Amendment's Takings Clause should apply to legislative bodies that impose exorbitant fees, marking a significant limitation on government overreach.
The Supreme Court's decision underscores concerns about the misuse of permitting fees by local governments as a means to generate revenue without raising taxes broadly, which often proves unpopular with voters.
Vermont lawmakers have proposed or passed multiple revenue-raising bills, including doubling the property transfer tax on homes over $600,000, enacting a 3% tax on households earning more than $500,000, and increasing corporate taxes from 8.5% to 10%.
They also increased motor vehicle fees across the board, and the state's antiquated Act 250 is renown for its excessive fee structure.
Governor Phil Scott has warned the governing body that it is rapidly moving towards making Vermont the state with the highest taxes in the United States.
This ruling is expected to have wide-ranging implications for how local and state governments across the United States approach the imposition of fees on property owners. It sets a precedent for closer scrutiny of government fees tied to permits and other regulatory measures, potentially curbing what some see as a tendency towards governmental overreach under the guise of fiscal needs.