The demand for funds for worthy purposes and projects are significant, while the supply of monies to pay for social and infrastructure needs is limited.

For years, eastern Vermont border towns have been adversely affected by "no sales tax New Hampshire." Noted Vermont economist, Arthur Woolf, issued a report in the 1990s indicating that sales tax differentials of 3 percent has the effect of exporting business to lower sales tax states (the current differential is 6 percent).

In an updated study, Woolf noted "Vermont Sales Tax has dramatically changed the pattern of retailing activity in the counties that border the Connecticut River, leading to a significant loss of the retail market in the Vermont border communities." And he concludes his study stating that "sales taxes along with the bottle bill and Act 250 have contributed to a hollowing out of Vermont retailing along its border with New Hampshire."

He cites that in the '50s and '60s, per capita sales, per local population, in stores selling goods now subject to sales taxes were essentially identical. By 2007, per capita sales in the border counties in New Hampshire were three times what they were on the Vermont side; and that, despite Interstate 91 which should act as an advantage to Vermont.

Exporting sales does not just occur with items where there is a sales tax differential. While Vermonters are shopping for goods in New Hampshire where there is a differential, many decide to eat, or shop for a car (which must be registered in Vermont), or visit shops (clothing, shoes) where there is no difference in the sales tax. We have not mentioned internet or mail order sales, but the effect of the differential is also relevant. What does this all mean? Lower sales in Vermont, fewer jobs, lower sales taxes, lower payroll taxes, and yes, reduced commercial property values.

Total gross receipts in Brattleboro have declined during the past four years as have taxable retail revenues. What does a declining base of retail sales mean to Brattleboro? A reduction in jobs, related income, and taxes are obvious. But the implications get broader.

An essential component of the value of commercial real estate is a function of the net income of a subject property. To be viable, retail businesses can afford to pay only a certain amount of gross sales as rent/occupancy costs. Lower sales translate into lower rents, lowering the effective net income of a commercial property, and ultimately the value of that property. Lower commercial property values ultimately reduce the tax grand list on these properties which translates into higher taxes for other properties.

The appearance of commercial properties affects how residents and visitors feel about a town. In a community such as Brattleboro, the downtown is a vital showcase of the community. An active commercial center is an indication of the economic health and viability of the community. Significant investment in the Latchis Theatre, the Brattleboro Food Co-op and the Brooks House project are encouraging. Brattleboro should not take any action which could have an adverse effect on existing businesses, or these projects.

For many years, communities along the border have insisted that the sales tax differential has been detrimental to their economic health. Should Brattleboro implement a local options sales tax, the message is clear: "You've been against the increase in sales tax all these years, and now, Brattleboro, you've increased it more." That does not add to the credibility of the community. In fact, Vermont border towns and local legislators should continue to try to lower the state sales tax.

In reality, we do not know the precise effect of an additional 1 percent sales tax on sales. But we do know that it would increase the differential between Vermont and New Hampshire, and the probability that it will have an adverse effect on retail sales in Brattleboro is apparent.

Yes, there are many needs. However, the other side of the equation needs to address the affordability of these needs. If we can't pay for them, similar to our households, it may be best to do without. Balancing needs with the resources to pay is no easy task. And we are fortunate to have dedicated town officials and a Selectboard doing their best to find a reasonable balance.

The differential in sales taxes between Vermont and New Hampshire has had tangible negative consequences to our community. I urge Town Meeting Representatives to vote against a local options tax. If we can't afford to fund the town out of property taxes (which with income sensitivity becomes somewhat progressive) maybe we need to reduce the budget.

Philip H. Steckler is a Certified Business Intermediary and a principal of Country Business, Inc, a business brokerage and acquisition firm doing business throughout most of New England.