3.28.2014 – The Budget and Miscellaneous Tax Bills
Many hours were spent on the Floor of the House this week as we worked on several important bills including the Miscellaneous Tax Bill and the Budget, or “Big”, Bill.
The Miscellaneous Tax Bill made several changes to tax policy including a 38 cent increase on the tax on snuff per 1.2 ounce container and a tax on e-cigarettes at 92% of the wholesale price. An argument was made that e-cigarettes are a way to stop smoking but the member from Dorset, Patti Komline, suggested members take a look at websites selling e-cigarettes where it is clear they are appealing to new, younger markets.
The House Agriculture and Forest Products Committee (HAFPC) is pleased that the Ways and Means Committee supported our position and eliminated the sales tax on compost when sold in bulk (greater than one cubic yard). Also included is an extension of the Wood Products Manufacturers’ Credit, which will continue to incentivize forest products. The Secretary of Commerce and Community Development will do a study that will recommend economic and tax incentives to ensure wood products manufacturers remain and thrive in Vermont.
The Big Bill represents the hard work of the House Appropriations Committee (HAC), including Windham County’s own, Rep. Ann Manwaring of Wilmington. I sometimes refer to the Chair, Rep. Martha Heath, and her team as miracle workers because, despite several years of significant budget cuts, they produce a balanced budget that does its best to protect Vermont’s most vulnerable citizens while keeping in mind our taxpayers’ pocketbooks. The Budget is one of the lengthiest bills we do, taking three to four hours alone to report on the Floor.
In her introductory remarks, Rep. Heath put it well when she said, “Our combined efforts created a budget that 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. In addition it funds needed programs for the elderly and the disabled.”
The original proposal from the governor required $14 million in additional revenue that was raised on health care claims assessments. The HAC was able to reduce the need for revenue to $3.3 million by cutting expenditures and using other funding strategies.
In the HAC budget proposal, we make several investments in the future health and stability of our citizens. $10 million is invested to deal with the very serious problem of opiate addiction. There has been an increasing reliance on the use of motel rooms to shelter homeless Vermonters, but this is expensive and does not provide stability for Vermont families. The Vermont Rental Subsidy is doubled, bringing it up to $1 million. There is an additional $300,000 for Emergency Solutions Grants for shelters; $200,000 for family supportive housing; and $900,000 for temporary emergency housing. The Vermont Housing and Conservation Board will get a 6% increase to promote affordable housing construction, which will also create jobs.
This budget fully funds the General Fund transfer to the Education Fund by adding $7 million, which will provide relief to property tax payers and we continue to make investments in our transportation infrastructure. The Regional Planning Commissions will see a 6% increase and there is increased funding for higher education. The Vermont Psychiatric Care Hospital is on track for opening in Berlin.
The HAFPC is very pleased that the Working Lands Enterprise Initiative made it through the process in the base budget funded at the governor’s recommended level of $1.5 million and that we were able to fund the Farm to Plate Initiative at $100,000. These are very important job creation and economic development tools. The original estimate was that if we doubled our consumption of Vermont-produced food, we could create 1,500 jobs in ten years. In fact, in four years we have created 2,200 jobs!
The other very good news is that we keep our General, Transportation, and Education Funds Stabilization Reserves at statutory levels.
This coming week, H.889, a bill relating to statewide education property tax rates, as well as other changes, will be on the Floor. It contains a provision that will eliminate, over a three year period, the Small Schools grants starting in 2019 for all small schools unless they are deemed eligible due to geographic necessity. When Act 60 was created, there was recognition that the formula, based on per pupil spending, was inherently unfair to small schools, which did not have the advantage of economy of scale.
It is concerning to me that this decision, which has potentially significant impact on many of the schools in the Windham Central Supervisory Union, as well as in the rest of the state, was made in Ways and Means, which is a money committee, not a policy committee. Given the fact that we are currently discussing quality of education and educational opportunities, it seems premature to enact legislation that will starve the oxygen from and cause the slow death of some of the schools that may be doing the best job educating our children, even if it does begin three years from now. If this concerns you, contact your legislators by calling the State House toll free at 1-800-322-5616 or use the contact information provided on the website – www.leg.state.vt.us.