Tax Dept. shields info about delinquent payers
The Vermont Tax Department says it can shield information regarding tax liens the department has filed at municipal offices against property owned by the state's worst delinquent taxpayers and businesses.
The department also says it may keep confidential all court judgments won at public courthouses against those delinquent taxpayers and businesses.
The claims of confidentiality were made by the Tax Department in response to a public records request filed by the Burlington Free Press seeking information about collection efforts against the top 100 delinquent taxpayers and top 100 businesses.
Assistant Attorney General Elizabeth M. Hannon, who is assigned to the Tax Department, wrote in a letter that a special Vermont law restricts who can see tax returns and return information.
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The Free Press never asked for tax returns or return information. The Free Press sought public records the Tax Department had filed or obtained across the state to try to collect the $25 million owed by the 200 accounts.
The Tax Department said the Free Press was free to request the same information from towns or courthouses. Hannon said in a phone interview that state law also allows the Tax Department to send information-seekers to other public sources.
Other Vermont officials, including the secretary of state and town clerks, said the Tax Department's ruling was baffling.
"I don't agree with them. A public record is a public record," said Stowe Town Clerk Alison Kaiser, a past president of the state town clerks and treasurers.
The Free Press was relying on the Vermont Constitution and public-records law — both of which say government employees are accountable to the taxpayers.
The state is owed $175 million in overdue taxes, but the Tax Department has not explained how the amount became that high.
Vermont is facing a $112 million projected shortfall in its next budget.
Officials react
The response by the Tax Department left plenty of public officials shaking their heads.
"I don't understand on what basis that they are withholding the public information," Secretary of State James Condos said Wednesday.
When told department lawyers were relying on the law that protected private tax returns, Condos remained baffled.
"What does that have to do with a lien?" he asked. "That seems like a stretch."
A lien is the tax department's effort to collect what is owed to the state treasury, not part of a return, Condos noted.
Milton Town Clerk John Cushing was disappointed to hear the Tax Department expects his office to do research for public records department should be providing.
He said the department has the information in one place, and town clerks could miss a lien or a discharge. He said most town clerks do not want to offer answers for the Vermont Tax Department.
"For a lot of clerks' offices, that would be a major undertaking," said Cushing, who is retiring in March after more than 40 years on the job. "It doesn't make sense to me."
Cushing agreed with Kaiser, the Stowe town clerk, in saying liens filed by the Tax Department in towns do not reflect information from a tax return or return information.
They said the lien might indicate the money owed is for the rooms and meals tax or the income tax, but the lien does not say whether the amount includes interest, penalties, or whether the person or business paid a portion of the tax owed.
"I don't know what it represents," Kaiser said about the amounts filed on the individual liens.
Kaiser also questioned how the Tax Department can say a record can be public in some places, but not public elsewhere.
"If it is public record at any point in the process, it should be public record. I don't understand why the Tax Department is treating them differently," Kaiser said. "You cannot have it both ways given that these liens are filed with town clerks. There is very little in a town clerk's office that is off limits."
Shumlin reacts
Gov. Peter Shumlin, who has made transparency a key plank in his administration, said he has been trying to make his Tax Department more transparent but is limited by law.
Shumlin at his weekly news conference Wednesday was asked how the Tax Department allowed delinquencies to build to $175 million, including a debt by one person of nearly $2.3 million.
The governor noted that under previous administrations, everything was considered confidential, but he has started taking steps to improve collections.
"I think the changes we have made are starting to get some results, and that is good news," Shumlin said.
Legislation that Shumlin signed last year allows the Tax Department to release the names, specific addresses and amounts owed. Department employees initially balked at releasing the specific addresses or the amounts, but recently released them in response to a public records request from the Burlington Free Press.
"We changed the rules under my governorship. It used to be that information was confidential, and they would be fired if that information was released. We have now moved to a system where it is not confidential," he said.
Shumlin acknowledged the process has not gone smoothly.
"There may be some bumps in the road as we move to the new system," he said, "but I am glad we are making progress, and I think it is working."
Contact Mike Donoghue at 660-1845 or mdonoghue@freepressmedia.com. Follow Mike on Twitter at wwww.twitter.com/FreepsMikeD.