(Host) Governor Jim Douglas says a new Democratic plan to create a municipal revenue sharing plan is unfair and irresponsible because it will lead to greater state spending. The Democrats argue it will help reduce local property taxes.
VPR’s Bob Kinzel reports from Montpelier.
(Kinzel) House Democratic leaders and the governor do agree on one thing – eliminating the so called 40 percent exemption for capital gains at the state level. It’s a move that will provide the state with roughly $15 million in new revenue. The governor wants to use this money to reduce personal income tax rates. The Democrats want to return it to all Vermont towns on a per capita basis.
Douglas says the Democratic plan represents a new state program that may not be sustainable in the future. Douglas is also convinced that his plan to reduce tax rates will help spur economic development efforts in Vermont.
(Douglas) “The tax increase proposed by the Democrats is not fair, not equitable and surely not responsible. I want to cut taxes for working Vermonters, and the Democrats want to increase spending. They have chosen to support a tax increase that will exacerbate inequalities in the system, derail our economic development plan, and do little to help Vermonters make a good living and provide for their families.”
(Kinzel) House Democratic leader Gaye Symington says the governor’s description of her proposal as a new spending plan is inaccurate, because she says it will help reduce taxes at the local level.
(Symington) “People, I think in communities, do understand that when the state is assisting their towns they’re allowing the towns to rely less of the property tax. People get that connection and I think it’s a bogus argument to say that to provide more support to towns is spending money.”
(Kinzel) The House Ways and Means Committee is reviewing both plans and hopes to have its own draft bill completed by Town Meeting Day.