Vermont House rejects higher taxes on rich
MONTPELIER, Vt. -- The Vermont House on Thursday rejected raising income tax rates on top earners to make up for cuts in federal support for food stamps as it debated tax and budget bills.
It endorsed a 92 percent tax on the wholesale cost of e-cigarettes, and boosted taxes on other smokeless tobacco products, including snuff and chewing tobacco.
Thomas Briant, executive director of the National Association of Tobacco Outlets, told lawmakers that the e-cigarette tax increase would raise their average price in Vermont from $7.99 to $18. Lawmakers said that would generate about $500,000.
All told, the House Appropriations Committee recommended a $1.44 billion general fund budget for the fiscal year beginning July 1, up 3.8 percent from the current year budget.
The budget "makes investments in strategies that will reduce future costs, address poverty, tackle opiate addiction, spur job growth and drastically reduce our reliance on one-time funds," said the committee's chairwoman, Rep. Martha Heath, D-Westford.
She said the budget would provide $10 million in new money to cope with what Gov. Peter Shumlin has called a drug abuse crisis -- particularly heroin -- in Vermont. One focus will be trying to divert people from the criminal justice system into drug treatment. "Treatment is much more productive than jail," Heath said.
Minority Leader Rep. Don Turner, R-Milton, said the budget relied too much on "one-time" funding -- money for which there will be demand but no set source in subsequent years. He cited projections from the nonpartisan Joint Fiscal Office saying that would lead to budget gaps of $70 million in fiscal 2016 and $72 million in 2017.
"It's growing spending more than we can sustain," Turner said. "We're spending faster than we've grown" revenues.
The budget and accompanying tax bill drafted by the Ways and Means Committee did not do enough to address poverty to satisfy some of the more liberal members of the House.
Rep. Paul Poirier, a Barre independent, unsuccessfully pushed for the income tax increases to boost food stamp funding. He said he wanted the state to make up for a roughly 10 percent cut in federal food stamp funding that took effect in November.
"One out of every six Vermonters depends on some kind of financial help to put food on the table," Poirier said. He said the average food stamp benefit before the federal cut was $243 per month for a family.
"I would ask anyone in this (House) chamber ... if you could feed your whole family for a month on $243," Poirier said.
Under Poirier's proposal, a household with an income of $225,000 would see a $14 tax increase, he said. A household making $350,000 would see an $889 tax increase and one making $1 million would see state income taxes climb $7,244 to $90,438, Poirier said.
The House voted down Poirier's amendment, 115-28.
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