(Host) Newly elected House Speaker Shap Smith unveiled a $150 million state economic stimulus package yesterday on the first day of the new session.
The plan is designed to repair the state’s transportation infrastructure and help create thousands of new jobs.
Many House and Senate Democratic leaders support the bonding initiative, but it does face some important obstacles at the Statehouse.
VPR’s Bob Kinzel reports.
(Kinzel) It’s likely that a significant part of the package will be financed by raising new revenue. And an increase in the state gas tax is strongly under consideration. It’s an approach that was proposed last month by State Treasurer Jeb Spaulding.
Governor Jim Douglas says he supports the idea of rebuilding the state’s transportation infrastructure but he thinks it can be done without raising taxes.
(Douglas) “We have one of the highest tax burdens in America, some say the highest on a per capita basis or as a percentage of personal income. We can’t at a time when Vermont families and small businesses are struggling to get by, when people are losing their jobs, where they need their cars to get to school or work or to run errands for their family, to increase the costs of transportation."
(Kinzel) While many members of the House Transportation Committee support the revenue bond approach, the chairman of the Senate Transportation Committee, Dick Mazza, has a different point of view.
(Mazza) “If you look at bonding, bonding is monies that have to be paid back, anyway. There’s no free ride here. If you bond you’ve got to pay it back and you’ve got to find a source of revenue. They’re talking about the gas tax, taxing gasoline. But we know that gasoline usage is down and that’s not going to be a sustainable source of income. I’m not convinced at this time we should jump into this, the gasoline tax increase."
(Kinzel) Will this kind of state economic stimulus package be effective in reducing Vermont’s unemployment rate – a rate that’s expected hit almost 8 percent in the coming months?
Economist Art Woolf isn’t so sure. Wolfe says the plan needs to be implemented as soon as possible to help the Vermont economy and he questions if the employment skills of many laid off workers match the needs of the construction industry:
(Woolf) “For example, a lot of these jobs involve construction type projects and there are some construction workers that have lost their jobs. But it’s going to be pretty hard to take someone who used to work as an administrative assistant for an accounting firm and put her to work rebuilding a state park. Or someone who used to work in retailing, or even somebody who was laid off in the manufacturing sector. What kind of construction skills do they have."
(Kinzel) Woolf says it’s very likely that Congress will pass a huge economic stimulus package this winter – one that will include tens of millions of dollars for Vermont transportation projects.
He believes it makes more sense for state lawmakers to wait until they see the details of the federal plan before embarking on a stimulus package of their own.
For VPR News I’m Bob Kinzel in Montpelier.