(Host) The Senate Finance Committee has given its approval to an Act 60 reform plan but critics of the proposal argue it doesn’t offer enough relief for taxpayers.
VPR’s Bob Kinzel reports.
(Kinzel) One of the key decisions made by the committee was to drop a plan proposed by the House to increase the sales tax from 5% to 6%. That increase raised an additional $45 million so senators had to scramble to find other sources of revenue for their bill.
They voted to increase the room and meals tax by 1% and they want to impose the sales tax on beer, non prescription drugs and phone services. They kept the House’s plan to create a two-tiered property tax system but they increased the residential rate from $1.10 to $1.17 and they raised the business rate from $1.59 to $1.60.
Senate Finance Chairwoman Ann Cummings (D-Washington County) says her panel limited the amount of property tax relief in the bill because the committee feels more money will be needed to meet the state’s budget needs in the years ahead, particularly in the areas of substance abuse and health care:
(Cummings) “We’ve already decided we’re going to have to say ‘no’ to all those social services that are going to need increased funding, and we’re not willing to do that at this point. We just don’t feel that’s responsible.”
(Kinzel) Steve Jeffery, who’s director of the Vermont League of Cities and Towns, says he’s very disappointed with the Senate plan because it doesn’t offer enough relief to local property taxpayers:
(Jeffrey) “Between last year and this year, it looks like education property taxes – after we reduce it by the rebates and income sensitivity payments – is going to rise by about $60 million. Now the Senate plan at this point looks to have between $32 million and $35 million of relief. Which means that all that’s going to do is cut in half the increases in property taxes that people are going to have to pay.”
(Kinzel) Governor Jim Douglas isn’t supporting the Senate approach. Douglas says the House plan that increases the sales tax is a much better proposal:
(Douglas) “So I think it’s the right way to go to provide on average 30% reduction in the residential property tax burden because that’s what I think Vermonters want.”
(Kinzel) Senate leaders are hoping to have the plan up for debate on the Senate floor at the beginning of next week.
For Vermont Public Radio, I’m Bob Kinzel in Montpelier.