(Host) Governor Jim Douglas says he’s optimistic that the Legislature will back a plan to cut income taxes this year. He acknowledges that his own proposal to reduce taxes is not very popular with lawmakers and needs to be changed.
Douglas has proposed eliminating the 40 percent capital gains exemption to pay for a $15 million cut in personal income tax rates. The plan faces opposition from both Republicans and Democrats. Many members of the GOP caucus don’t want to eliminate the exemption; Democratic leaders want to do away with the exemption but they’ve proposed using the money to create a municipal revenue sharing plan.
Speaking Tuesday night on VPR’s Switchboard program, the governor says he’s intrigued by a plan being considered in the House Ways and Means Committee that would designate any future budget surpluses directly to tax cuts. It’s a process that’s currently used in the state’s Education Fund:
(Douglas) “Well I think it is worth pursuing. That’s something we’ve talked with the Ways and Means Committee about. And I think it answers the question that I posed just a few minutes ago, which is how can we do this? By reducing revenues overall without having to find a revenue source to provide the tax relief and lower those rates.”
(Host) Douglas says he opposes the Democratic plan to create a municipal revenue sharing program because sending new money to individual towns will not necessarily result in local property tax cuts:
(Douglas) “It is a spending program in that the funds would be taken in and then disbursed by appropriation of the General Assembly. The folks who proposed it admitted that it might not be tax relief. It might be more local spending. That would be up to the municipality to decide how to use it.”
(Host) There may be an effort in the House to attach the tax cut plan to the state budget for next year when the budget bill comes up for a vote on the House floor next week.