Douglas dropping Education Fund transfer plans

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(Host) Governor Jim Douglas says he’s dropping plans to transfer $14 million from the state’s Education Fund to the Transportation Fund.

Douglas had proposed the transfer to help the state match new federal transportation money. Douglas says he’ll now support $15 million in budget cuts for this purpose.

It’s a decision that will be very controversial at the Statehouse.

VPR’s Bob Kinzel reports:

(Kinzel) If the state of Vermont wants to take full advantage of the new federal transportation law, it’s going to need an additional $25 million in matching funds.

There’s some agreement at the Statehouse to increase a number of transportation related fees to provide new money – about $10 million would be raised in this manner.

The fight is going to be over how to raise the additional $15 million.

Governor Jim Douglas proposed transferring this money from the Education Fund but he’s backing away from this approach because more than 100 communities supported a resolution on Town Meeting Day opposing such a transfer.

Several House committees are backing an increase in the state gas tax of between 4 and 6 cents a gallon to raise the money. Douglas says there’s no way he’ll support this plan.

(Douglas) “Gas prices are going to be rising as the year goes along we want to be sure that Vermonters are able to get around to the store or to school to take care of their family’s needs and making it even worse by raising the gas tax I think is moving in the wrong direction.”

(Kinzel) Instead, Douglas says he’ll ask lawmakers to cut $15 million in state spending.

(Douglas) “I think Vermonters believe that out of the several billion dollars that are spent by state government every year we could find 15 million or so that would be required to bring it into balance it could be in the transportation fund by deferral of some projects if the Legislature wants to do that or it could be some savings in some other areas of state government.”

(Kinzel) Senate president pro tem Peter Welch says it’s critical for Vermont to take full advantage of the new federal transportation law and he doubts that budget cuts are the way to achieve this goal:

(Welch) “I think it is a tall order. And I think it would be quite unfortunate if we had to leave good road construction and bridge repair money on the table.”

(Kinzel) Welch says a small gas tax increase may need to part of the final package.

(Welch) “I think it’s a mistake to rule anything out because we have to weigh what are we getting for whatever the investment is that we make to meet this match money. I’m not a big fan of the gas tax but one of the points that people argue on the gas tax is that the burden is shared by everyone who uses our roads it’s not just paid by Vermonters.”

(Kinzel) The full House is expected to debate this issue later this month.

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

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