Sometimes One Place Wants to Slip into the Other Just to See

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How did I miss this one when it first happened? Alex Tabarrok at Marginal Revolution writes about the affluent skiing town of Killington's designs to secede from Vermont, where residents are subject to sky-high property taxes, to join New Hampshire. It's not terribly likely to happen, because as CNN reports:

Secession activists say Killington's restaurants, inns and other businesses send $20 million a year to Montpelier in sales, room and meal taxes, while the state returns just $1 million in municipal and education aid to the town of roughly 1,000 residents.

Vermont legislators would have to approve the secession bid, and if those figures are remotely close to the truth, they've got little enough incentive to do so. I notice that the Free State Project is apparently involved, and also this odd line from New Hampshire's governor:

"How do you take a piece of property completely removed from our borders? How do you connect it? I just don't know how you'd connect the dots."

Last I checked, Alaska and Hawaii weren't in any hurry to cozy up to the continental U.S., doesn't seem to have been a huge problem.

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  1. May I also point out that Michigan has two land masses which are accessible to one another over land only by traveling through another state. That’s to say nothing of the many islands in many state which are accessible only by boat or plane.

  2. I never realized killington wasn’t a border town.
    This would make NH look more like Azerbaijan. Or old Pakistan (incl Bangladesh). Or Russia and Kaliningrad.

    Huh, I just looked at the map and realized there are little bits oz Azerbaijan surrounded entirely by Armenia and vice versa. I have no idea if these areas have ski resorts.

    I also found the name of the large disconnected area of Azerbaijan is Nakhichevan.

    Anyone have any other examples of one city being totally disconnected and landlocked from the rest of its state/country. Bonus points if the city is completely surrounded by one state/country (making all my examples except the little bits on the Az/Arm border not count).

  3. This got a brief flurry of not-very-serious coverage in New Hampshire a while back. Gov. Benson recognized that it wasn’t likely to happen, simply because, as Julian Sanchez mentions, Vermont isn’t going to forego the revenue and just let the town go.

    But it is true that there’s currently no case where two parts of a state are completely separated by a different state. Considering the skirmishes between NH and Mass. cops which have occurred in past years, the geography could lead to “interesting” situations. Just imagine: the Killington Airlift!

  4. Killington is a tourist resort with no access other than via the roadways. How much does Vt. spend on roads, emergency services, and water purification due to these drivers? Just one example of how the $20 million/$1 million figure is misleading.

    Damn New Hampshire parasite economy.

  5. Actually, there are any number of oddities when discussing political subdivisions like states and cities. A common example of “islands” are the Native American reservations, legally small sovereign entities in the midst of states.

    My suggestion to Killington is to appeal not to New Hampshire, but to a tribal authority. Clearly, at some point Killington was occupied by indigenous peoples. Many tribes now have vast amounts of revenue which one supposes would be required for the requisite legal fight. I expect all Killington would need to do is volunteer for a casino or two.

    Sadly, Vermont municipalities are political subdivisions of the state. These municipal corporations in some cases have fewer rights than private corporations. While Reason staff often point out the foibles of small governments, I would suggest an alternative view. I note that a few small communities were among the first to sanction gay marriages. If unleashed from the moorings of federal and state edicts, small municipalities could become wonderful political experiments. One can argue that the residents of Killington’s right to self rule extends to rejecting the role as “cash cow” for the Vermont government.

  6. I was there the day the people of Killington voted. As an FSP member and NH resident, I presented a NH flag to town manager David Lewis following the vote. This was broadcast on CNN, FOX, and other network news programs.

    Here are the facts:
    a) there are a minimum of 9 precedents IN THE US as to the fact that contiguity is not a valid issue.

    b) While Rt 4 and Rt 100, the state roads through Killington, are ostensibly state roads, their maintenance and upkeep is performed by the town. There are no interstate highways passing through the town.

    c) Beyond just $10 million in state property taxes paid by town property owners, town businesses also collect $10 million in sales taxes for the state. In return, the town receives $1 million from the state.

    d) Beyond these taxes, if the town wants to issue bonds for school construction, a rather large fraction of the raised funds are confiscated and given to the state for redistribution to towns run into the ground economically by decades of liberal mismanagement.

    e) Killington, despite being called a ‘gold town’, is not populated by rich people. Unlike Woodstock, VT, there are no Rockefellers, Vanderbilts, Carnegies, or other scions of inherited wealth in Killington. They are primarily middle class, hard working people, many who own their own small businesses they have built up over the years by their own labor. There are also a number of retirees who live on fixed incomes. The population is about 1,000.

    f) The taxes raised per person (this includes kids and retirees) for the state (not counting town taxes) exceeds more than $25,000 per year. It is obvious to any sane person that state taxation of Killington, in the words of Selectman Butch Findeisen, “is no longer sharing, but has become looting.”

  7. I was there the day the people of Killington voted. As an FSP member and NH resident, I presented a NH flag to town manager David Lewis following the vote. This was broadcast on CNN, FOX, and other network news programs.

    Here are the facts:
    a) there are a minimum of 9 precedents IN THE US as to the fact that contiguity is not a valid issue.

    b) While Rt 4 and Rt 100, the state roads through Killington, are ostensibly state roads, their maintenance and upkeep is performed by the town. There are no interstate highways passing through the town.

    c) Beyond just $10 million in state property taxes paid by town property owners, town businesses also collect $10 million in sales taxes for the state. In return, the town receives $1 million from the state.

    d) Beyond these taxes, if the town wants to issue bonds for school construction, a rather large fraction of the raised funds are confiscated and given to the state for redistribution to towns run into the ground economically by decades of liberal mismanagement.

    e) Killington, despite being called a ‘gold town’, is not populated by rich people. Unlike Woodstock, VT, there are no Rockefellers, Vanderbilts, Carnegies, or other scions of inherited wealth in Killington. They are primarily middle class, hard working people, many who own their own small businesses they have built up over the years by their own labor. There are also a number of retirees who live on fixed incomes. The population is about 1,000.

    f) The taxes raised per person (this includes kids and retirees) for the state (not counting town taxes) exceeds more than $25,000 per year. It is obvious to any sane person that state taxation of Killington, in the words of Selectman Butch Findeisen, “is no longer sharing, but has become looting.”

  8. “Just one example of how the $20 million/$1 million figure is misleading.”

    Blech. Unless I’m mistaken, roads are maintained in every populated area of Vt. The fact that there are roads in Killington doesn’t alter the fact that they are being killed in taxes that are specifically directed to the rest of the state (by way of the education funding mandate).

    Whatever the numbers are, the folks there are getting hosed.

  9. amr: West Berlin. Most iterations of the Palestinian state are two pieces.

  10. New Hampshire makes use of the 8% Rooms and Meals Tax to soak the tourists; I’m sure Vermont runs a similar racket, though I don’t know the details. It’s not clear that they’d get a better deal from NH.

  11. Maine used to be part of Massachusetts. Of course, that was a long time ago.

    A number of enclaves are discussed here. I particularly enjoyed this part:

    “The most fascinating example of a fully functional enclave lies on the Dutch border with Belgium. The town of Baarle-Hertog, in the southern Netherlands, looks ordinary when viewed from the air. A look at a municipal political map reveals, however that much of the town is located on Belgian territory. The Belgian part of the town is called Baerle-Duc and takes the form of twenty-two enclaves of different shapes and sizes, each of which is entirely surrounded by Dutch territory.71 The smallest enclaves are so tiny that they cannot hold an entire house. As a result, many houses are located partially on Belgian and partially on Dutch soil.

    “Mail is delivered by the Dutch postal service to houses where the front door is in the Netherlands and by the Belgian post office to houses where the front door is in Belgium, but this is further complicated by the fact that some front doors are bisected by the border. Even more confusing, some of the larger enclaves of Belgian territory contain sub-enclaves of Dutch land, each of which is completely cut off from the rest of the country by the surrounding chunk of Belgian territory.”

  12. Well, VT has a 6% sales tax. NH has an 8.5% business profits tax and an 18% inheritance tax on property. These guys are just stirring up trouble, they’d hardly be doing better with an income tax than they are now with a sales tax.

  13. “amr: West Berlin. Most iterations of the Palestinian state are two pieces.”

    Gee, and to think I was worried about conflicts…

  14. Your numbers are off. There is no income tax in NH. In fact, VT has an income tax in addition to the sales tax. The inheritance tax is only 8% (and higher in VT). Business profits tax is nowhere near 8.5% in NH, and it doesn’t even apply to the first $50,000.

    Killington commissioned a study of the changes in taxes by moving to NH. The town would save a minimum of $7 million by changing to NH soveriegnty.

  15. Mike Lorrey,
    I`m proud to see posting by an FSP member and hope I live long enough to see the your plans completed.14,000 more independent soles is a doable task. We will all be better off when the FSP becomes complete.

  16. Actually, we suggested Killington change its name to West Berlin.

    p mac is off on the tax info. NH has no income tax, while VT has both an income tax and a sales tax. NH inheritance tax is only 8%, and the business profits tax is nowhere near 8.5%, and doesn’t apply to the first $50,000 in profits.

    Killington commissioned a study of the tax benefits of changing sovereignty. Turns out they’d save a minimum of $7 million a year by going with NH.

  17. State-by-State Adjusted Federal Expenditures Per Dollar of Taxes by State:

    Vermont: $1.13
    New Hampshire: $0.66

    I just love when Vermonters call New Hampshire “selfish”.

  18. In the old days, the residents would have tarred and feathered the local tax official, and the state would have gotten the message.

  19. “Who will die for Killington?”

    Kevin

  20. Palestine is a state?

  21. You have to think that Park City would want to join Colorado or better yet Wyoming, to escape from The Massachusetts Of The Intermountain West’s taxes and our world-famous goofy liquor laws.

    Maybe of the California-side Tahoe ski resorts will want to join income-tax-free Nevada?

  22. Jesse,
    Fascinating page on my city you link to. In reply to amr’s question, Canada already has an actually-existing example: Point Roberts, WA is the bottom tip of the lower mainland of British Columbia which is beneath the 49th parallel. It’s surrounded on three sides by the Strait of Georgia and on the fourth by Canada.

  23. On a related note, I recall that there are some enclaves around the Canadian border which belong to the US but can only be reached by driving through Canada (I guess you could hike to them and remain on US soil the entire time, but no road runs directly to those places through the US). From time to time I’ve seen little snippets in the news about those places, usually along the lines of “gee, kind of weird, huh?” Usually in those articles there’s a mention of how some people want to secede and join Canada since their economic and social ties are all with Canada. I don’t see it as an urgent issue, but if the locals voted in favor of joining Canada I wouldn’t care.

    What makes this VT town different is that they want to become an isolated enclave.

  24. I’m still hoping to hear some of the 9 US examples of non-contiguity (without a water passage). I assume they must be on the county or city level. Couldn’t find anything on FSP’s web site.

    Every embassy is a foreign enclave, but it’s the property of the foreign power rather than of private persons.

  25. Palestine is a state?

    Yeah dude, that’s why there’s a star in the middle of the Israeli flag.

    heh. Sorry, I couldn’t resist.

  26. It needs to be said that the _entire reason_ to encourage commercial growth like Killington Ski Resorts so _specifically_ so that they can _generate more in tax revenue than they produce_.

    Vermont has about 600,000 people, or so. That’s about the size of Boston. I don’t hear the owners of buildings in the financial district of Boston complaining that they pay so many X millions of dollars in property taxes without getting much back in return. Commercial development is encouraged exactly _because_ they pay more in taxes than they consume in services. By contrast, residential properties invariably consume more in services than they pay in property taxes.

    In a small state like Vermont, this is inevitably going to occur. In fact, before the new property tax scheme, towns like Killington invariably ended up with a better deal when it came to funding their schools because of the income generated by the ski resort, while more isolated communities starved. So the system is working as designed.

  27. the thing is though, is that killington locals built up the area under one set of rules, while other cities and villages just screwed around and did 0

    then they elect some even more leftist legislature and they change the rules and take all of the benefits away… so killington does all the work and the benefits go to the slackers… i think there was a book by this russian chick about some guy shrugging in such a situation…

    the rest of vermont are a bunch of welfare queens sucking the blood of killington

  28. Yes, the waitresses serving grilled cheeses in Killington are much harder working than the waitresses selling grilled cheeses in towns that don’t have a ski resort.

    You see, you can tell they’re better people who deserve more, because they’re richer. Or they live in a town with more rich people. Or something.

  29. joe:

    Take a deep breath and leave the desert you added to the grilled cheese alone. Working hard and being a swell person has absolutely nothing to do with the local value of labor.

    Butlers in Compton work just as hard as butlers in Hollywood, but, if there are any, I bet they work at a serious discount.

    All that matters is willingness to pay.

  30. The 9 instances of non-contiguous state territory in the US:

    1) The far western tip of Kentucky
    2) Hawaii, with gaps of more than 60 miles between islands.
    3) Michigan’s UP
    4-8) The Great Eastern States Exposition firegrounds in Springfield, Massachusetts contains sovereign territory of the other 5 New England States. Each state’s territory is used to display agricultural animals, products, and other stuff from that state, during the duration of the fair, but is, by interstate treaty, the sovereign territory of each state, year round.
    9) Alaska (Aleutian Islands have gaps of more than 90 miles)

    and more:
    10) Maine was part of Massachusetts.
    11) Acomack and Northampton Counties are non-contiguous to the rest of Virginia
    12) The Chesapeake Bay also cleaves Maryland in two, all the way to the PA border at Pilot (admittedly its a bit narrow at that point, about a mile across)
    13) There is a hunk of Delaware on the New Jersey side of the Delaware Bay, several miles away.
    14)Fishers Island, NY is ten miles from the closest point of Long Island, but less than three from the Connecticutt shore.

    Other examples of secession in the US (other than the Civil War:
    Back in the 1970’s, Nantucket Island sought to secede from MA and NH was willing.
    Key West declared independence as the Conch Republic in the 1980’s, and locals claim that the island was never properly re-annexed by the US beyond force majeur and a faulty vote by a rump assembly.
    New Hampshire’s Grafton County seceded from the state and joined Vermont in the Revolutionary era up into the 1790’s, when Vermont was required by congress to give the County back to NH as a condition of joining the Union.
    The New Hampshire border town of Pittsburg was once, in the early 19th century, the independent Republic of Indian Stream. Angered over being double taxed by US and British tax agents in their territory under contest, they declared independence until the two nations could work out where exactly the NH/Canada border lay. This persisted for more than 12 years until war nearly re-erupted over the minor matter of a $5 debt to a Canadian hardware store.

  31. One more:
    Jefferson- Northern California and southern Oregon have long been dissatisfied with their respective governments. This exasperation erupted over the failure of the government to provide funding for new roads. A number of border counties sent delegates to demand better treatment at a November, 1941 meeting in Yreka, California. The local board of county supervisors, urged on by the Chamber of Commerce, allocated funds to further the cause of independence and designated Yreka the temporary capital of the State of Jefferson. On December 4, Judge John Childs was elected governor of the new state. National opinion was favorable, but fate was not; three days later, the Japanese attacked Pearl Harbor. The inhabitants of Jefferson put aside their bid for the sake of national unity. All ended well; the government built a number of roads through the area to transport timber during the war. http://www.buckyogi.com/footnotes/natgj.htm#j

    Correction: It was Martha’s Vinyard, not Nantucket, that sought secession, and Vermont, ironically, bid to accept them.

  32. Constantine:
    You’ve been taught some really bad economics if you think that “the _entire reason_ to encourage commercial growth like Killington Ski Resorts so _specifically_ so that they can _generate more in tax revenue than they produce_.” In effect, this is saying that the only reason to tolerate economic success is because it provides something to loot.

    By engaging in successful economic activity, people have more to offer others in trade — more money to spend or more goods to offer. These are potentially of benefit to anyone nearby. People get jobs working in the tourist industry. Businesses in nearby towns get to sell things to the people who run or work for the tourist operations. Other businesses get to build for or sell supplies directly to the tourist operations.

    It’s a standard fallacy of modern thinking to believe that a successful neighbor is an economic enemy, and the corollary of that thinking is your notion that the only reason for enduring profit is the opportunity to seize it. But it’s a deadly mistake.

  33. I’m hoping for conflict. Nothing more entertaining than people who talk funny getting mad at each other.

  34. I’ll look silly posting this so close to thread death, but Mike’s list (in which only the Kentucky case comes close to what I had in mind) jogged my memory. David Friedman recounts the curious case of Houston v. U. S. Gypsum in which a private island in the Mississippi River drifted (by soil relocation) over the MS-LA state line. I’d like to see the look on a judge’s face when he sees _that_ in a brief.

  35. Yes, the waitresses serving grilled cheeses in Killington are much harder working than the waitresses selling grilled cheeses in towns that don’t have a ski resort. You see, you can tell they’re better people who deserve more, because they’re richer. Or they live in a town with more rich people. Or something.

    Joe, it’s fairly normal for governments to soak the rich. Vermont’s government, however, soaks people who happen to live in towns where either lots of people are rich or people spend a lot of money on education. These aren’t necessarily rich people.

    There’s some income-sensitivity built into the formula, but that doesn’t help renters who are paying the property tax indirectly, or the students in the towns that ratchet down their school spending to avoid being punished by the state. When the school goes downhill, the rich can put their kids in private schools. The poor can’t. Poor kids in rich towns are the eggs that had to be broken to make the Act 60 omelette.

  36. I was trying to recall that Houston case, and spent several hours last month poring over my copy of Topo-USA looking for the spot.

    If we allow rivers, as interstate channels of commerce under the constitution, to eliminate the non-contiguity of Killington (as they do in other areas of the country), I’ll note that the Ottauqueechee River, which passes through Killington, empties into the Connecticutt River across from West Lebanon, NH. Yes, it’s certainly a stretch.

    Personally, I like the precedent of that town on the Belgian border best. I’ve predicted that Killington’s secession is the start of the franchulate enclave movement predicted by Neal Stephenson in “Snow Crash”.

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