Vets, Fiscal Office Question Break-open Ticket Tax

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The Shumlin Administration’s proposal to tax private lottery tickets is under scrutiny at the Statehouse.

The Legislature’s fiscal office says the administration has over-estimated the potential tax revenue. And a veteran’s group that sells the tickets is worried the tax will cost it needed funds.

Break open tickets are sold in Vermont at private bars and service clubs. For a dollar down, you get a chance to win 100 or 200 bucks if you pull a winner.

Gov. Peter Shumlin says a 10 percent tax on wholesale ticket sales could raise $17 million. He wants to use the money to expand fuel assistance, pay for a clean energy fund, and enhance home weatherization efforts. But what the administration sees as an untapped revenue source, veterans’ groups view as a lifeline for fundraising.

Roger Martel commands the American Legion post in St. Johnsbury. The army veteran of the Vietnam era had a simple message to the House General, Housing and Military Affairs Committee was simple: don’t tax our tickets.

"I don’t mind paying taxes," he said. "But I really think they’re really picking on the poor veterans. I think they should be exempt from that."

Martel said the revenue from the ticket sales supports scholarships and legion memberships for World War II vets. He said his organization faces ever-increasing costs, including a $1,400 fuel oil bill that he can’t yet pay.

"What’s going to happen is, it (the tax) is going to shut down the American Legion and the VFW," he said. "You’re going to lose on liquor, beer. I just can’t believe they’re going to do it."

Meanwhile, the administration’s revenue projections were questioned by the non-partisan legislative joint fiscal office. In a new analysis, the JFO said the state could raise $6.5 million from the tax, not $17 million as the administration has forecast.

The analysis looked at taxes raised in other states, as well as the potential impact on sales if a new tax was imposed.

But Administration Secretary Jeb Spaulding is sticking with the original projection.

"Based on the outreach the Department of Liquor Control has had with current distributors and the analysis by the Tax Department, I think our estimate should stand," he said.

Spaulding said it’s common knowledge some ticket sales go un-reported. So he says it’s possible that the $17 million estimate is too low.

"We really do think this could be a win. Other states raise money from this form of gambling for their state treasuries," he said.

Spaulding said groups like the American Legion are protected in the administration’s proposal. They are now supposed to use the ticket sales to support non-profits, but Spaulding said under the administration’s proposal the groups would be allowed to use some of the revenue to cover their operating costs.



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