Local lawmakers look at shortfall driving, likely gas-tax hike

Saturday March 2, 2013

BRATTLEBORO -- It appears that Vermont drivers soon will be paying more at the pump.

And while fluctuating oil prices certainly will continue to play a big role in the cost of a fill-up, this price increase will arrive in the form of a tax hike from Montpelier.

State Rep. Mollie Burke, a Brattleboro Progressive Democrat, said Friday that lawmakers are close to completing a plan that would cover an estimated $36.5 million shortfall in transportation funding for fiscal year 2014.

And she believes that remedy will rely partially on a gas-tax hike that would raise the price of a gallon by more than 6 cents in the first year of a multiyear plan.

"A lot of thought has gone into this," Burke said, while acknowledging that the move would be unpopular.

Vermont is facing a transportation-funding crunch as gas-tax revenues decline: An earlier report predicted annual transportation-budget shortfalls of $240 million.

The projected fiscal 2014 shortfall is not nearly that severe. But members of the House Transportation Committee, on which Burke sits, have discussed and heard testimony on a variety of solutions.

Some had raised the possibility of increasing the state's motor-vehicle fees. At one point, officials even mentioned implementing a tax on the number of miles residents drive.

"We have been working very hard on this," Burke said. "And we're closing in on what to do."

At this point, she said, there is a three-part plan to close the $36.5 million gap. In addition to cutting $4.4 million in transportation spending and borrowing more than $8 million from a transportation infrastructure bond fund, lawmakers would impose a 2 percent tax on the retail price of gas.

At current prices, that would add another 6.7 cents to each gallon, Burke said.

In terms of state revenues, there is a clear advantage to the 2 percent sales tax: If prices rise, the state reaps more revenue.

Burke also said the plan is to build a "floor" into the tax so that the state's revenues would not shrink if gas prices fall significantly. If that happened, at a certain point the sales tax would become a flat, per-gallon tax.

"We need to know that we're going to get a certain amount of revenue from the gas tax," Burke said.

Burke said increasing the gas tax, because it also is paid by out-of-state drivers traveling through Vermont, is more fair than other transportation-funding solutions that would target only state residents.

And she argues that Vermont is left with few feasible solutions when trying to raise money to maintain roads and bridges. Many residents "don't really understand the unbelievable costs of just keeping up with our infrastructure," she said.

Burke noted that efforts to cut oil consumption -- while important and successful -- have put transportation planners in a bind due to the current funding system.

"At the same time we encourage people to drive less, we depend on the gas tax," Burke said.

She expects that the Transportation Committee will vote on the matter when legislators return from next week's Town Meeting break.

On the last day of legislative business before that break, several Windham County lawmakers reported on recent initiatives:

-- State Sen. Peter Galbraith, D-Townshend, said a push for a three-year moratorium on construction of large-scale wind turbines has ended.

Instead, the focus of proposed legislation in the Senate has shifted to requiring that all proposed wind projects undergo a full review under Act 250, the state's land-use law.

"That greatly enhances the environmental criteria," Galbraith said.

Also, he pointed out that wind projects would have to conform with town plans. That is not currently the case.

"I'm pleased with the outcome," Galbraith said. "I think a moratorium wasn't necessary. The important thing was to give towns a say over what happens in their town."

Additionally, the bill requires creation of assessments measuring wind turbines' impacts on the environment, health and property values. If windmills negatively impact property values, "then we'll have a process to compensate property owners," Galbraith said.

The bill has cleared the Natural Resources and Energy Committee and the Finance Committee. The Appropriations Committee will consider the legislation before a full Senate vote, Galbraith said.

-- Also moving out of a legislative committee -- though facing a still-uncertain future -- is a proposed tax on sugar-sweetened beverages.

The penny-an-ounce tax, which would fund subsidies for those who are transitioning to a new health-care exchange, was approved by the House Health Care Committee on Wednesday by a 7-4 vote.

That same committee earlier had rejected the bill on a tie vote. But further rejections may be in the works, as the Associated Press reported that the measure lacks support in another House committee. Gov. Peter Shumlin also opposes it.

State Rep. Mike Mrowicki, however, sees the tax as a way "to address this rapidly growing public health and economic problem."

"The obesity epidemic and the role of sugar-sweetened beverages cannot be ignored anymore," Mrowicki, a Putney Democrat, said in an e-mail to the Reformer. "The problem with sodas and other sweet drinks is they are all too accessible -- marketing targets youth, the way tobacco used to -- and youth now get more empty calories from soda than other less-healthy foods like pizza, candy or ice cream.

"It's not just the occasional soda, but its four, five and six a day, with some youth starting first thing in the morning with a soda and continuing throughout the day," Mrowicki said. "Higher costs have been effective in reducing tobacco use by youth, and we feel it is a good first step in helping change dietary habits that are turning into long-term health problems."

-- In the wake of the recent, controversial House vote to raise the statewide education tax, Rep. Ann Manwaring is continuing to push for a big-picture look at the state's education system.

"For a long time, I have believed that the question of education funding is not just about a complicated formula for raising money for our schools," Manwaring, a Wilmington Democrat, said in an e-mail to the Reformer.

Rather, Manwaring wants lawmakers to ask "a holistic question that includes how we raise the money, what that money buys, the policies and goals of the work that money is intended to do and, most of all . . . the outcomes for all our students."

On Thursday, three House committees -- Appropriations, Education and Ways and Means -- held a joint hearing on education funding, Manwaring said.

"The purpose was to gain some insight into why education spending (and thus the property tax) is growing so rapidly," Manwaring said. "We heard from superintendents of two supervisory unions -- one whose school budget had high increases and one which did not."

She added that, "while this seems a small step in the face of the large increases many of our towns will face this year in property taxes . . . it is a step in the right direction."

-- Also on the education front, state Rep. Valerie Stuart -- a member of the House Education Committee -- is lauding a bill that would expand opportunities for high school students to take college-level courses.

So-called dual enrollment has been a priority for Shumlin, who has pointed to Windham County as a model for such programs. In February, Windham Southeast Supervisory Union Superintendent Ron Stahley and Tom Yahn, who directs Windham Regional Collegiate High School, traveled to Montpelier to testify about dual enrollment before the Education Committee.

A Senate bill would create a "Flexible Pathways Initiative" that would combine and expand programs including dual enrollment and early college. And Stuart said Shumlin has included money in his proposed budget for dual enrollment.

"If we can convince our (House) colleagues that, at the end of the day, this is a great investment, then this is a no-brainer," Stuart said.

She echoes others in saying dual-enrollment classes ease the financial burden on students while also easing their transition into post-secondary education, which might ensure that more finish college.

"The shortage of Vermonters with post-secondary degrees is currently one of the Green Mountain State's primary economic challenges," Stuart wrote. "Nationally, 60 percent of jobs in the near future will require a post-secondary degree. Moreover, 81 percent of the fastest-growing, high-wage jobs will require some post-secondary education.

"While Vermont's 83 percent high school graduation rate is commendable, only 64 percent of our state's students graduate from college," she added. "If all of Vermont's high school students graduated ready for college, the state would save as much as $12 million in college remediation costs and lost earnings.

-- In other legislative news, Sen. Jeanette White, a Putney Democrat, introduced a bill that would extend a 30-day grace period for drivers license renewal to spouses and dependents of active-duty military members who are stationed outside the United States.

State Rep. John Moran, D-Wardsboro, was among those signing on to a bill establishing a required "livable wage" of at least $12.48 per hour starting Jan. 1, 2014.

And both Moran and Burke lent their names to a new House bill that would expand the state's bottle deposit-redemption system to include water bottles and containers for all noncarbonated drinks.

Mike Faher can be reached at mfaher@reformer.com or 802-254-2311, ext. 275.


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