Tax and spending deals reached
Vermont's state revenue and spending plans were finalized late Friday night after days of wrangling over property tax rates, policy incentives, sales taxes and budget line items.
The deal includes about $5.79 million in new taxes. The budget totals $5.5 billion -- $1.4 billion from the state's General Fund and $1.5 from the Education Fund. Almost $2 billion is expected in federal funding.
One of the biggest compromises on the spending side came in reimbursements to health care providers who serve low-income patients on Medicaid. The Senate Appropriations Committee pushed for a 2 percent reimbursement rate increase in response to the House proposal of 0.75 percent proposal. They settled on 1.6 percent, which will cost more than $2 million.
And they agreed to a complex, decade-long formula for fully funding retired teacher health care. The state has been borrowing from the teachers' pension fund to pay the health care costs, which now cost about $28 million per year.
About $2.8 million more will be raised by temporarily changing the calculations for business penalties that help incentivize and pay for affordable health care. "Employer assessments" currently are levied on businesses whose employees are not covered by health insurance.
The conference committee agreed to extend the penalties to employers who offer health insurance, but whose workers earn so little they're enrolled in Medicaid.
Cigarette taxes will go up by 13 cents per pack, to $2.75, to raise $1.1 million. An equivalent tax on snuff and smokeless tobacco will raise another $850,000. E-cigarettes and bottled water will not be taxed.
New fees will be charged on prepaid cellphones through the Universal Service Fund. The pre-paid USF will divert $450,000 to the General Fund to help close the gap.
Budget writers also are counting on squeezing an estimated $800,000 out of noncompliant taxpayers. The names of the state's most delinquent individual and business taxpayers -- 100 each -- will be published.
House and Senate members settled on a 4-cent increase in homestead property tax rates (from 94 cents to 98 cents per $100 of assessed property tax value), and a 7.5-cent increase for non-residential property tax rates ($1.515). Income-sensitized payers will not see a change from the current 1.8 percent.
TALK TO US
If you'd like to leave a comment (or a tip or a question) about this story with the editors, please email us. We also welcome letters to the editor for publication; you can do that by filling out our letters form and submitting it to the newsroom.