Douglas defends Act 60 plan against Republican critics

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(Host) Governor Jim Douglas is defending his new Act 60 reform plan from some strong criticism from House Republican leaders.

VPR’s Bob Kinzel reports:

(Host) As the House Ways and Means Committee worked to put the final touches on their Act 60 reform plan, they got a surprising message from Governor Jim Douglas. Douglas doesn’t like the approach that the committee is taking and the governor is proposing a so called “consensus plan” that more closely resembles an approach adopted by Senate Democrats last month.

The House Ways and Means Committee is developing a plan that shifts some of the burden for education costs from the property tax to the income tax and the sales tax. Douglas says he opposes this approach because he’s concerned that imposing a new income tax surcharge will have a negative impact on the state economy:

(Douglas) “It’s a difficult balancing act because we want to maintain a tax structure that will not adversely affect the economy. And a massive increase of a quarter of billion dollars of taxes on middle income Vermonters is not the way to improve the economy of our state, nor the lot of those taxpayers.”

(Kinzel) Under Douglas’ plan, a statewide property tax would still be the major source of revenue for education.

The major part of the governor’s proposal is similar to a plan developed in the Senate. A town’s statewide property tax rate would be determined by its level of spending. Ways and Means Committee Chair Dick Marron says his panel is proceeding with its plan to shift tax burdens over to the income and sales tax. Marron says he’s disappointed that the governor would support a plan that is still heavily reliant on property taxes:

(Marron) “There’s a great deal of similarity between the so called ‘consensus plan’ that the governor has offered and the plan that passed the Senate and a plan that was offered in conference committee last year. So I have some serious reservations about that approach. They point out that tax rates go down in 220 towns but the money to bring those tax rates down comes from the same towns that are currently sharing and providing a lot of the money to fund Act 60. So they would have a greater burden.”

(Kinzel) Marron says he’s hopeful that his committee will be able to vote a plan out in the very near future. If that happens it could be on the House floor for a vote in the next few weeks.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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