(Host) Democratic leaders at the Statehouse are considering a proposal to raise the state income tax, as a way to avoid drastic cuts to next year’s budget.
But as VPR’s Bob Kinzel reports, the Douglas Administration is taking a dim view of the plan.
(Kinzel) In an unusual move, Senate Appropriations chairwoman Susan Bartlett came to the House Ways and Means committee to outline a series of budget cuts that she says will be needed if no new tax revenues are raised.
The cuts include: closing all interstate rest areas, eliminating the state’s drug subsidy program for the elderly, closing the state’s fish hatcheries, shutting down the Department of Motor Vehicles two days a week, suspending the Next Generation college scholarship program and closing the St. Johnsbury jail.
Bartlett says lawmakers have two options – raise some new tax revenue or accept these cuts:
(Bartlett) "We’ll do what you as a whole want us to do and if we decide we don’t want more revenues then understand these are the kinds of reductions that are going to happen."
The Ways and Means committee is looking at several plans to impose a half a percent surcharge on the income tax for a 3 year period. The proposals would not affect individuals with incomes below $32,000 or couples with incomes less than $53,000.
Calais Rep. Janet Ancel is the vice chairwoman of the committee. She says it makes sense to look at the income tax because it’s the state’s most progressive form of taxation:
(Ancel) "I think raising revenue is something that you do only when you really need to do it I think it’s a serious step, it’s not something that we take lightly… It’s clearly in front of us and I think we are doing the right thing by looking at the options, by going where the money is and by looking at the consequences seriously of what happens if we don’t do it."
Administration Secretary Neale Lunderville says lawmakers will be making the wrong decision if they choose the income tax surcharge instead of making budget cuts:
(Lunderville) "I don’t know if the list they put forward is the end all be all, but after two months of reviewing the budget the governor proposed I’m glad that they’re finally looking at some places to save money rather than just adding taxes to working families. This is exactly the discussion we need to have."
Douglas’s budget plan was balanced, in part, by shifting $55 million in General Fund expenses to the Education Fund. He financed this shift by freezing state spending on education.
Democrats said the plan would raise property taxes because local towns would have to shoulder a larger burden of school expenses.
The full House is expected to debate next year’s budget in the middle of next week.
For VPR News, I’m Bob Kinzel in Montpelier.