Senate gives preliminary approval to Act 60 bill

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(Host) The Vermont Senate has given its preliminary approval to legislation that makes some key changes to Act 60. The vote on the bill was strictly along party lines. Eighteen Democrats voted for it and nine Republicans voted against it.

VPR’s Bob Kinzel reports:

(Kinzel) The key difference between the bill that passed the House earlier this month and the one that passed the Senate on Monday afternoon concerns how much new revenue should be raised to reduce property tax burdens.

The House raised $70 million by increasing the sales tax from 5% to 6% and by imposing this tax on beer and soda. The Senate plan doesn’t increase the sales tax, although it does apply the existing rate to beer. It does raise the rooms and meals tax. Both proposals create a two-tiered statewide property tax system – one rate for residents and another rate for businesses. The Senate plan includes slightly higher rates for this tax.

Senate Finance Chairwoman Ann Cummings (D-Washington County) said her panel rejected the sales tax increase because the committee believes the state will need to use this additional tax capacity for key budget programs next year:

(Cummings) “That was really our excess taxing capacity that’s our reserve and if we spend it all this year, then next year when we go to do the budget we are not going to have that money to provide substance abuse treatment or health care costs or anything else that might come up. We don’t know what’s likely to come up over the next year.”,/i>

(Kinzel) Senator John Bloomer (R-Rutland County), who’s the minority leader of the Senate, voted against the bill because he felt it didn’t properly address the issues of cost control and educational quality:

(Bloomer) “And until those two parts are included. We’re doing nothing but circling around on this merry-go-round of education financing year after year. And lacking those two I cannot support this bill.”

(Kinzel) The legislation calls for the creation of a special cost control council. The panel will make specific recommendations on this issue to the General Assembly next January. Senator Garry Gossens (D-Addison) said the work of the council was very important:

(Gossens) “Mr. President, I appreciate the need and the call that people have for cost containment. I think it’s something that’s come on to all us this year most dramatically, and I think this bill is an excellent start. And it begins to collect information so that we can all work on the same page and can do a cost containment job that is sensible.”

(Kinzel) The measure will come up for final approval in the Senate on Tuesday.

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

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