Legislative leaders craft their own budget plan

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(Host) Legislative leaders say they can’t make a deal with the Douglas administration on tax and spending plans.

So they’re crafting their own proposal that makes additional budget cuts and raises new revenues.

VPR’s John Dillon reports:

(Dillon) Think of the Legislature’s plan to balance the budget as divided roughly in thirds: One-third is additional spending cuts, one-third is new revenue, and the remainder affects the transfer of money to the state’s Education Fund.

Senate President Peter Shumlin said the three pieces include something for everyone to dislike. But he said negotiations with Governor Jim Douglas broke down over the question over taxes.

(Shumlin) "We did not feel that another $26 million in cuts was within the realm of reason. And the governor did not want to do $26 million in revenue. And we weren’t able to resolve those questions."

(Dillon) The Legislature’s plan includes a sweetener on the tax side. Although it raises almost $50 million in new revenues, Shumlin says it will also lower marginal income tax rates, so most Vermonters will pay less.

(Shumlin) "We are reducing income taxes on Vermonters at a time when they need the help the most. We’re closing tax loopholes that the governor called for eloquently three years ago. We’ve made tough choices in the budget, understanding that we’ve got to reduce the size of government."

(Dillon) The hardest sell for the Legislature’s Democratic majority may be a provision that would reduce the transfer of state General Fund dollars to the Education Fund.

The governor had proposed a bigger hit on the Education Fund. But many lawmakers – including Shumlin and House Speaker Shap Smith – have argued that reducing the transfer to the Education Fund will simply shift more of the burden of school funding to the local property tax payer.

But even as the legislative leaders try to convince Democrats to go along with their idea, they also need Governor Douglas to sign the bill.

Douglas says Democrats walked away from the negotiations, and he says their plan relies too heavily on tax revenue.

(Douglas) "The people of Vermont are paying dearly for the government that we have now. … We have to recognize that all across Vermont people are tightening their belts and they have to expect that state government is going to do the same."

(Dillon) Speaker Smith said the next move is up to the governor.

(Smith) "We don’t think this is a budget that he should veto. But if he does, it will be incumbent on him to present a budget that he thinks is one that we should adopt and bring us back to present it."

(Dillon) Smith and Shumlin have sketched out the broad strokes of the budget. It’s now up to a House and Senate conference committee – and their staff – to work out the details.

For VPR News, I’m John Dillon in Montpelier.

 

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