In Burlington, which is home to the state university, the state's largest hospital and several state government buildings, 40 percent of the real estate assessment roll is exempt from the property taxes that support city services and the school system. And that, Mr. Sanders said, makes those institutions a logical target.

''It is appropriate to ask individuals and institutions to pay their fair share,'' said the Mayor, now in his fourth term. ''To me, the bottom line is that any institution should be eligible for tax exemption if the people of a community want it to be. What happens now is that the state orders it, and that is not O.K.''

But his opponents say that Mr. Sanders, who ran unsuccessfully for Governor last year, is more concerned with consolidating his power and scoring political points than he is with helping the taxpayers of Burlington. 'Epitome of Royalty'

''This all goes back to his philosophy that boards are inherently evil, particularly boards over which he has no control,'' said Nicola Marro, director of public relations for the university. ''He has referred to the U.Vm. board of trustees as the epitome of royalty in Vermont. That's hogwash. This is just a form of harassment.''

Beverly Rutherford, director of public relations at the hospital, echoed Ms. Marro's sentiments.

''The attacks on the hospital have been incessant,'' she said. ''This has been extremely costly in terms of time, energy and money.''