(Host) The possibility of raising taxes to help balance the state budget is now firmly on the table at the Statehouse.
Democratic leaders say a package of federal stimulus money, budget cuts and a tax increase is the best way to close a $225 million gap in next year’s budget.
Governor Jim Douglas opposes the plan and says the lawmakers are "divorced from reality."
VPR’s Bob Kinzel reports.
(Kinzel) The battle lines are now drawn on one of the defining issues of the 2009 session – how to balance the state budget in a time of plummeting revenues.
The governor says he’s very concerned that Democratic leaders are not making critical budget cuts and he says their approach is out of touch with the views of many Vermonters.
(Douglas) "I sometimes wonder if these legislators are divorced from reality. Their constituents, their neighbors, their friends, their small businesses in their communities are cutting back all the time. People are losing their jobs all across our state and this Legislature just keeps spending and spending."
(Kinzel) Senate President Peter Shumlin and House Speaker Shap Smith have unveiled a plan to eliminate a projected $225 million shortfall in next year’s budget. The package doesn’t include many of Douglas’s budget cuts.
(Shumlin) "This legislative session is going to test our values as Vermonters. The governor’s plan throws the most vulnerable, when they need a hand up, it takes the challenges that the state faces fiscally and shifts it back to the property taxpayers. I’m honored to be divorced from that reality."
(Kinzel) Shumlin argues that the governor’s plan to transfer new responsibilities to the Education Fund will result in a $63 million property tax increase.
He says the Democrats’ plan requires less revenue because it relies more heavily on new federal stimulus money. Shumlin says there a number of tax options available to help balance the budget.
(Shumlin) "And have a candid discussion with Vermonters about the way they want to get there. We need half as much – 33 not the 63 the governor proposes. We can get it, we all know, from the main sources of revenue raising that the state has before it: property tax, adjustments to the sales tax, rooms and meals and income. We’re going to ask our committees to go forth and have that conversation."
(Kinzel) The governor says he’s not proposing a property tax increase because he backed a freeze on all state education spending to offset his plan to have the Education Fund assume new responsibilities. Douglas also made it clear that he won’t support any tax increases this year.
(Douglas) "We have to make some tough decisions to ensure that we don’t spend at a rate that we can’t maintain in future years. But we don’t need to increase the tax burden on the people of our state."
(Kinzel) The Legislature will begin its two week Town Meeting break next Monday. Democratic leaders and the governor say they’re hoping to build support for their plans during this time period.
For VPR News, I’m Bob Kinzel in Montpelier