Vermont House committee raises taxes, while Gov. Shumlin objects

Saturday March 23, 2013

MONTPELIER -- Vermont lawmakers appeared headed for a budget showdown with Gov. Peter Shumlin after money committees on Friday raised several taxes he didn't want to raise and trimmed back on some of his spending priorities.

The House Ways and Means Committee voted to raise $27 million in new taxes in the coming fiscal year, and an additional $20 million -- mainly in income tax increases for upper-income earners -- in fiscal 2015.

The state's 6 percent sales tax would be imposed for the first time on soda, candy, bottled water and dietary supplements.

The meals tax would go from 9 to 9.5 percent and apply to vending machine sales.

Shumlin said he was disappointed with the actions, which followed House passage of a tax increase he supported: raising the state's gasoline tax by about 7 cents to an estimated 33.6 cents per gallon in 2015.

Meanwhile, the House Appropriations Committee approved a spending package that cut Shumlin's hoped-for $16.7 million in increased childcare subsidies to about $3.3 million.

Lawmakers engaged in a bit of a dance through the afternoon, with the Appropriations Committee making its spending decisions in its room on the third floor of the Statehouse, while the tax-writing Ways and Means Committee figured how much their colleagues would have to spend in its room a floor below.

Legislative fiscal analysts and lobbyists got a workout walking briskly between the two rooms, leading Appropriations vice chairwoman Rep. Mitzi Johnson, D-Grand Isle, to joke that the budget could have been funded by setting up a toll booth on the stairs.

Shumlin issued a statement saying he disagreed "strongly with the manner in which the Ways and Means Committee has chosen to raise revenue. I have repeatedly opposed increases to income, meals, and sales taxes, and yet this proposal hits all three."

Democrats who dominate the Legislature have never warmed up to Shumlin's proposal to fund increased childcare subsidies by cutting money that goes to low-income working people through the earned income tax credit. And that proposal was nowhere to be found on the menu of items approved by the Ways and Means Committee on Friday.

"Rather than reallocating existing funds more efficiently to achieve better outcomes as my budget recommends, the committee proposal increases Vermont's already high tax burden," Shumlin said.

Lawmakers also have dismissed Shumlin's plan to pay for energy programs through a new tax on charitable betting tickets called break-open tickets. While the Appropriations Committee approved the governor's request for $6 million for heating assistance to low-income households, it did not fund an additional $6 million the governor had planned to put toward helping Vermonters cut heating bills by tightening leaky homes.


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