The House has given its preliminary approval to a $26 million tax package to help balance the state budget for next year. But the plan faces the strong opposition of Governor Peter Shumlin.
Before the session started, the Governor made it very clear that he would oppose any plan to increase a broad based tax including the income tax, the sales tax or the rooms and meals tax
Shumlin says he doesn’t like the House Tax package because it affects all three of these statewide taxes.
Instead, he proposed taxing break open tickets and taking money out of the Earned Income Tax Credit program – a program designed to help low income working people.
The House proposal is a two step process. In the first year, it increases the rooms and meals tax from 9 to 9 ½ percent, it imposes the sales tax on soda, candy, bottled water, and clothing that costs more than $110. It also raises the state cigarette tax by fifty cents a pack.
In the second year, it caps the amount of money a person can claim if they itemize their deductions on their income tax. This raises almost $20 million beginning in 2015 and it replaces an employer assessment on health care.
House Ways and Means chair Janet Ancel said the package was the fairest way to raise new revenue.
"To me the test of a tax package is whether the package as a whole is fair and equitable," said Ancel. "Everyone on the committee ended up with something in the bill that they really didn’t like and I think I can probably speak for everyone on the committee when I say there was something they would have liked to see that didn’t end up in the bill. So it was a lot of compromise and a lot of give and take."
Milton Republican Ron Hubert operates a market in his community. He opposed the tax package because of the changes to the sales tax.
"The ones who are going to suffer the most from this tax package will be those that are in the Connecticut River valley," said Hubert. "I am not sure how many of the people that entered into business at the same time that I did will be able to survive at all."
At a Wednesday press conference, the Governor reiterated his strong opposition to the House’s tax package.
"I would go for the highest building that I could find to jump to make sure that I wasn’t here to see that tax package become law."
The measure is scheduled to come up for final approval in the House on Thursday.