Governor Peter Shumlin has unveiled his plan to boost state spending next year by 3.4 percent without raising any broad based but the budget proposal does rely on roughly $60 million in new revenue from a variety of other sources.
The Governor says his budget plan is designed to create new jobs by investing in education, health care, transportation and renewable energy programs.
Shumlin says his budget provides funding for essential programs without raising the income, sales, or rooms and meals tax.
"It invests in areas crucial to our future job success… it’s a budget that matches Montpelier’s appetite for spending with Vermonters’ ability to pay."
Shumlin defended his decision to significantly reduce funds for the state’s Earned Income Tax Credit program for low income working Vermonters. He wants to use the money to pay for an increase in child care subsidies.
A number of Legislative leaders say they support the child care plan but they argue it’s unfair to slash funding for thousands of low income working Vermonters. But the Governor says the Tax Credit program is too generous.
"We’re the second richest Earned Income Tax Credit in America," Shumlin said. "We have to ask ourselves is a once a year check from the state, that has increased 49 percent in the past few years, the best way that we can offer low income Vermonters who are struggling, the help they need to stay in the workforce … and our answer is no."
The Governor also proposed a major change to the state’s welfare to work program. Shumlin said Vermont is the only state in the country not to have any time limits for participation in the program. He suggested a total limit of 5 years with no more than 3 years in a row.
"It takes courage to say it but say it we must," Shumlin said. "Benefits for Vermonters who are able to work must be temporary, not timeless."
Shumlin called for nearly $30 million in new Transportation revenue to allow the state to draw down the maximum amount of federal funds but he didn’t identify a specific source of money.
"Our pledge is to partner with you, to determine the best way to repair this leak this year and on into the future. Let’s get that done together,"Shumlin said.
The Governor also hopes to raise almost $20 million in new revenue by taxing break open tickets that are sold at many service clubs and private bars. He wants to use the money for weatherization programs, heating assistance for low income Vermonters, and the state’s clean energy development fund.
"To join our neighbors in Connecticut and Massachusetts by assessing a 10 percent surcharge on the retail value of break open tickets and applying the $17 million raised to comprehensive energy program funding."
Shumlin also proposed a 3 percent increase for UVM and the Vermont State Colleges to help stabilize tuition for Vermont students. The House and Senate Appropriations committees will now review the plan over the next few months.