Act 60 bill debated on floor of the House

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(Host) Thursday in Montpelier, the compromise reform of Act 60 will be debated on the floor of the Vermont House. The plan shifts some of the burden of the property tax over to the sales tax. It’s that part of the bill that isn’t sitting well with some Republicans and Democrats.

VPR’s Bob Kinzel reports:

(Kinzel) Legislative leaders are relatively confident that the so called “consensus Act 60 reform plan” will be approved in the House later this week. But there’s growing concern about one key provision of the bill.

The consensus plan creates a two-tiered statewide property tax rate: one rate for residents that will be determined by a town’s spending on education, and a second fixed rate of $1.59 for all non residents and businesses. The proposal also increases the state sales tax from 5% to 6 % and imposes the sales tax on beer and soda. Backers of the plan say it will lower property taxes by roughly 30% in many communities because it establishes a higher state block grant for education.

A number of lawmakers don’t like the sales tax provision. Representative Bud Otterman (R-Topsham), who is a member of the House Ways and Means Committee, wants to substitute an income tax surcharge for the sales tax. This was the approach favored by the committee until Governor Jim Douglas said he would veto a bill that raised the income tax. Otterman doesn’t like the new plan:

(Otterman) “It was a complete reversal of what the first one was and I think that’s one reason that you heard so many of the members of the committee expressing unhappiness with what they were doing but they thought this was better than nothing. I’m not sure it was better than nothing.”

(Kinzel) A number of Democrats also oppose the sales tax provision. They want to use the income tax but in a different way from the Republicans. The Democrats favor a progressive income tax plan while the Republicans support a flat rate for all taxpayers regardless of income.

Democratic leader Gaye Symington is trying to convince members of her caucus that substituting the income tax for the sales tax effectively means that no bill will pass this year:

(Symington) “Because I believe Vermonters want us to come to resolution and that it would not be acceptable to have the governor veto this at the end of the session. And given where we are now I’m ready to work to make this come to pass.”

(Kinzel) The House is expected to consider a number of amendments to the bill during their two-day debate over this legislation.

For Vermont Public Radio, I’m Bob Kinzel in Montpelier.

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