State looks at funding options for bridge and road repair

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(Host) The Douglas Administration is looking at several options to provide more money to repair the state’s bridges and roads.

One option on the table is to use surplus money in the Education Fund for transportation related projects.

The approach faces some strong opposition, because it means Vermonters wouldn’t get a cut in their statewide property tax rate.

VPRs Bob Kinzel reports:

(Kinzel)The Education Fund has several different revenue sources including; the statewide property tax, a portion of the sales tax, part of the motor vehicle purchase and use tax and all the proceeds from the Vermont Lottery.

In previous years, when there’s been a surplus in the Fund, the Douglas Administration has always recommended, with great fanfare, a plan to lower the statewide property tax rate.

But that didn’t happen this year. Even though Tax Commissioner Tom Pelham is projecting a 20 million dollar surplus in the Fund next year, Pelham didn’t recommend a property tax cut because Pelham said he wanted to leave all options open to lawmakers in these difficult financial times:

(Pelham) "I kind of leave it there so that the leadership of state government has the information they need but then can use it as they see fit to help resolve our fiscal woes."

One of the options is to take part of the purchase and use tax out of the Education Fund and fill the budgetary hole with the surplus. Transportation Secretary David Dill says this would give the Administration a new source of revenue to repair roads and bridges:

(Dill) "Is there a way if the Education Fund is stable if we have our Education needs covered is there an opportunity there to redirect some of that Purchase and Use Tax back to Transportation?"

This approach has some strong critics. Londonderry Republican Rick Hube says Vermonters deserve a property tax cut if there’s a surplus in the Education Fund:

(Hube) "I’m very, very concerned by any unauthorized use of money from the Ed Fund I think we have a covenant with the property taxpayers of the state of Vermont and I think when we start looking to divert money we ultimately pay a price at some point not only with the people we have a covenant with but also to the underlying structure of the Fund."

Darren Allen is the communications director for the Vermont NEA – the state’s teachers union.
He says he was surprised by Commissioner Pelham’s decision not to recommend a tax rate because Allen says it’s required by law:

(Allen) "They choose not to set a lower property tax rate as would be called for now it’s not a huge cut on the tax rate I think everybody I’ve talked to says it’s somewhere on the order of two and three cents but that said I think by actually not setting a tax rate does send a political message."

The size of a potential cut in the statewide property tax rate could be even larger if education spending at the local level turns out to be lower than current projections.

For VPR News I’m Bob Kinzel in Montpelier.

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