Lawmakers Face Divide: Cut Programs Or Raise Taxes?

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(Host) When lawmakers return to the Statehouse next week for the second half of the session, they’ll likely face a choice on how to balance the state budget. They’ll have to decide whether to cut human service programs or raise new taxes.

As VPR’s Bob Kinzel reports, it’s an issue that could divide some liberal legislators and Governor Peter Shumlin.

(Kinzel) A small group of lawmakers is floating the idea of raising taxes because they’re very unhappy with the Governor’s plan to cut 44 million dollars from human service programs.  Cuts to mental health programs and services for the elderly are drawing the most fire.

Washington County senator Anthony Pollina says the cuts are too drastic and he wants to raise taxes on Vermonters who earn more than 171,000 dollars.

(Pollina) "There’s a growing awareness that simply cutting budgets is not the way to solve the problem and I think that right now there’s a lot of enthusiasm at least for having this proposal on the table I mean I think that people are not only open to it I think they’re pleased to start this conversation."              

(Kinzel) Burlington Rep. Chris Pearson says it’s appropriate to raise taxes on upper income people.

(Pearson) "Folks at the top on the economic scale have seen roughly speaking about a 50% growth in their income in the last decade most of us working families middle class folks if we’ve seen a one or two percent increase we’re lucky so I think we need to deal with the economic reality of what we’re facing today and try to correct that."

(Kinzel) Governor Shumlin says he supports raising taxes on wealthy people at the federal level, but he says it would be a huge mistake for Vermont to take this step on its own and that’s why he’s backing the budget cuts.

(Shumlin) "The state of Vermont does not have the flexibility to do that because we all know New Hampshire is to our east and Florida is not far away and frankly my job is to take the 435 high income tax payers in Vermont and grow that base grow our customer base so that we have more revenue."

(Kinzel) This discussion has put some Democratic leaders in an awkward position. They opposed these kinds of cuts when they were made by former Governor Jim Douglas but the Democrats don’t want openly criticize Shumlin.

Senate President John Campbell says a final decision about raising taxes will be made when lawmakers weigh the impact that the cuts will have versus the impact of raising taxes.

(Campbell) "Then we have to balance it with the potential that if we did look to some type of revenue package what would that revenue package look like and what impact it would have on the economy of the state."

(Kinzel) The House Appropriations committee is expected to finalize its work on next year’s budget by the end of the month.

It’s likely that the tax debate will emerge when that bill is considered on the House floor.

For VPR News, I’m Bob Kinzel in Montpelier.

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