The House Ways and Means Committee has approved raising $48.3 million from fee and tax hikes — which should pave the way for budget writers to wrap up work on a House spending plan.
The House tax-writing panel had rejected some of the sources of new revenue that Gov. Peter Shumlin proposed in January, including a tax on dentists and independent physicians and a policy change for medicating psychiatric patients involuntarily, intended to save money by shortening hospital stays.
Ways and Means struggled to reach consensus on alternatives. Wednesday evening, the panel split along party lines in a vote on the total revenue package, which increases fees and taxes to raise $48.3 million. Its vote Thursday on the tax portion was similarly split along party lines.
The three Republicans and one independent on the committee opposed the tax package. It would increase the franchise tax on big banks, revise the way employers are assessed for workers without health insurance, increase the fuel gross receipts tax and collect rooms and meals taxes from private rental properties such as Airbnb.
The tax changes would raise $13.4 million.
Rep. Jim Condon (D-Colchester) said he was supporting the tax package with his fingers crossed, hoping that the Senate would be able to pare spending so less revenue would be needed.
Rep. Patti Komline (R-Dorset) criticized this strategy. “We are just dumping it on the Senate again,” she said. “It should be stopping here.”
The fees proved less controversial. Republicans and the independent on Ways and Means joined the Democratic majority in supporting the fee increases, which include the biggest revenue generator in the package — an increase in the fee on mutual funds. It is expected to generate $20.8 million. The vote was 9-0, with two lawmakers absent.
Ways and Means Chair Janet Ancel (D-Calais) noted that the mutual fund fee “is one source of revenue we get to export,” meaning it will be paid almost completely by out-of-state businesses.
A bill to fund transportation projects would raise $10.5 million from fee increases at the Department of Motor Vehicles. Ways and Means increased the fee package that the House Transportation Committee recommended. The increase was to cover the projected loss of revenues from a bill that would forgive many unpaid parking tickets as part of reforms to the state’s policies for suspending drivers’ licenses.
Rep. Patrick Brennan (R-Colchester), who chairs the House Transportation Committee, noted that DMV fees hadn’t been raised for four years. Normally the state revises fees every three years, he said.
“I hate to sound like a broken record,” House minority leader Don Turner (R-Milton) said when asked about the revenue package. “The majority continues to fix a spending problem with revenues.” He criticized the size of the mutual fund fee increase, calling it gouging. And he said the bank franchise tax increase and the changes to the employer assessment are “just an attack on business.”
Ancel argued that the committee fashioned the revenue package to have as little impact as possible on individuals and businesses. She argued the bank tax increase and the employer assessment changes spared small banks and employers.
Chris D’Elia, president of the Vermont Bankers Association, said the 26 percent increase in the bank franchise tax hits the five largest banks in the state and “seems to foster the mentality that big is bad.” He predicted the increase would likely lead to job cuts, less lending and reduced charitable giving by those banks.
The higher rate would mean consumers would pay a total tax of two to three cents per gallon on home heating fuel, depending on its price, said Matt Cota, executive director of the Vermont Fuel Dealers Association. He acknowledged that the fuel gross receipts tax hadn’t increased in 26 years. The increase would raise $1.3 million.
The revenue and budget bills are expected to be on the House floor by the middle of next week.
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Phil Scott or Bruce Lisman cannot be elected fast enough to end this madness. And this is coming from someone who voted Clinton-92; Nader-96; Gore-2000; Kerry-2004; and Obama the last two times. The Democratic controlled Vermont Legislature has been out-of-control the last few years. If they are going to tax something, it ought to be the so-called “renewable” energy industry that has been given carte blanche to destroy our environment.
I agree with Chris on this. The Democrats have been acting very un-Democratic for the last several years, and driving supporters to the other side. Shumlin’s extremely low approval rating is not a fluke.
I have yet to hear Dunne or Minter talk about putting Democracy back into the State’s Democratic Party. Their rhetoric so far sounds identical to what Shumlin continues to say.
Whether it’s the faulty PSB process (VT Gas, Lowell Mountain, etc) which disenfranchises residents, or a tax and fee system that is regressive in almost every aspect other than the income/property tax, the Democrats are driving good, caring, community-minded people away.
The raise in the Property Transfer Tax last year hit many people hard, especially in a climate of decreasing property values. Many folks were already losing money on their homes, and to have to pay a $4000+ extra tax on top of their loss just twisted the knife. Some of these people will never be able to own a home again. The Property Transfer Tax should only be on SALES WHICH ARE MAKING A PROFIT on their homes, otherwise it is simply a burden and a REGRESSIVE tax.
And the same goes with DMV registrations and fees. These hit the poorest in our community the most, because having a car or a truck is essential to one’s ability to survive in VT. And many poorer folks have to have more than one vehicle, because they are usually old and unreliable, or one is necessary for work. Ditto with fuel surcharges. Those who live in older, inefficient homes, usually because this is all they can afford, end up paying more…this makes it a REGRESSIVE tax.
I agree with everything said here. I’ve voted democrat in every presidential election since I’ve been old enough to vote. However, the way the Democratic party in Vermont looks now most closely resembles the Republican party nationally. They’ve gone off the rails. And the worst part is that no one will own up to it. All they give you is “everything is great! Vermont is the best state in the country!” Nonsense. Own up to the mistakes, and explain how you’re going to fix it. Unfortunately Shumlin, Smith, Dunne, Minter and the rest of them refuse to do that. All they give you is more regurgitated political rhetoric or poorly conceived criticisms of their opponents. It’s time for a change, both in the legislature and in the Governor’s seat. I will be voting for Phil Scott, because he has always been the voice of reason, and he is a genuinely great person; a true member of our community- a blue-collar guy who understands what we’re going through. Unfortunately, the Lieutenant Governor has very little power, and it’s very difficult to accomplish anything in the legislature when your party is in the extreme minority. It’s time to give him the opportunity to keep this ship from sinking.
Nothing like taxing new (big) businesses out of Vt..Way to go House Ways and Means Committee,Shumlin sure using your democratic brains..Enough people (true Vermonters ) are having hard enough time trying to survive here in Vt..We have to many out of staters moving into Vermont and taking over.. Vermont is becoming known as anti business and over tax state.. there’s a lot of older citizens that can hardly make it now, with paying high property taxes, increase in gas and home fuel..home fuel is high enough, now we are being taxed to being warm..Nation wide gas prices went way down, Vt went down a little.. with in 1 wk recently gas went up 10 cents in 1 day..the excuse “it’s spring time” Give me a break.. the real excuse is “GREED”..How do these so called House Ways and Means Committee, legislation, and Shumlin think they are taking care/helping Vermonters..In my opinion they are only helping themselves, especially Shumlin..Vermont use to be a great Republican state..not anymore now it’s full of transplants democrats who are greedy..Vermont is now a SOCIALIST state!!! Have always been a good honest Republican, never voted for a Democrat, never will..
DMV is already $70.00 per year going up again for a one inch paper sticker.. Slush fund for overspending on Medicaid Heating Oil tax up too!!! Crazy people in Montpelier!!!!!!! Social received ZERO this year, no inflation, but in Vermont much self inflicted inflation. We need Phil NOW !!!!!
You mean a state run by leftists continues to gouge its residents with higher and higher taxes??? Color me shocked.
Tax, spend, tax, spend. That IS the leftist platform.
Well I believe there has been a saying, a very old one at that; you reap what you sow. Well, we Vermonters have let these 3 branches controlled by one party go too long in their march to drive us to Socialism. Now we find the tastes in our mouths unbearable and decide to squawk? Better we do it now, this fight to reclaim your property and tax monies because the government and leadership has done such a better job than you could do right? read your Vermont Constitution and see it is very simple and written for the common person to understand without being put to sleep or needing a lawyer. You can get through most of it over coffee and a bagel.
You and your children/grandchildren deserve nothing less.