Around the House in March

March 20, 2015

At this point in the session, each committee is hard at work trying to finalize bills before Crossover – a line in the sand whereby bills that we expect the Senate to take up before adjournment must have been voted out of committee and on to the full House. Here is a truncated description of some of the money bills that are on the move.

 

The Appropriations Committee is struggling mightily to balance the FY'16 state budget. The total combined budget of both state and federal monies will be about $6.4 billion and will represent about a 3.5% increase over last year. However, when we convened in January, total expenditures were projected to rise at more than 6%, that is nearly twice the growth of revenue. At issue then is the $113 million shortfall between revenue and expenditures that must be closed before we adjourn. As you may have heard many of the following programs are potentially on the chopping block: Vermont Commission on Women, State funding for Vermont Public Television, Prevent Child Abuse Vermont, the Governor's Institutes, closing the Windsor County prison, some funding for LIHEAP, as many as 350 State jobs, and cuts in many, many other programs. We will post a link to budget as soon as it is voted out of Appropriations.

 

Ways and Means is tasked with the responsibility of raising revenue either through taxes or fees to meet the revenue needs of agreed upon expenditures in bills from other committees.

  • This week completed work on the Clean Water Bill that raises about $8.4 million during each of the next 6 years to help clean up Vermont's watersheds (see my posting below from February 26th). Much of the money to be raised will come in the form of fees charged to those who, either directly or indirectly, contribute to the phosphorus, nitrogen and other pollutants that are major contributors to the problem.

  • We have completed work on finding some $35 million to balance that portion of the budget that can't be made through cuts. What the committee has settled on is eliminating the income tax deduction of state taxes for the previous year and limiting itemized deductions on the state income tax to 2½ times the standard deduction. About 27% of taxpayers will see a tax increase and will make Vermont's income tax more progressive.

  • Next week we will take up the Sugar Sweetened Beverages Tax (SSBT). This tax is intended to substantially raise the price of sugary drinks and thereby cut down the consumption of added sugar that has no nutritional value and is a major contributor to obesity. As currently drafted, the tax is proposed to be a wholesale tax paid by the distributor, and there is good reason to worry that the tax will not be reflected in the price you pay when you pick the beverage off the shelf at the grocery store. Ways and Means may restructure the tax and may add candy to the list of things that are subject to the sales tax. Currently candy and soft drinks are classified as food even though they provide little to no nutritional value.

  • Ways and Means may also revisit the payroll tax that the Governor proposed in his inaugural address. Governor Shumlin wanted to impose a 0.7% payroll tax to help fund increased reimbursement rates for doctors and hospitals that serve Medicaid patients (see my post of January 19th and Tim's post of February 16th regarding the  "cost shift"). While reducing the cost shift is essential over the long term, the Governor's payroll tax may not be the way to do it..

 

Corrections and Institutions - Each year, the legislature passes the Capital Bill, another important money bill, that directs funds to the construction or renovation of state office buildings, state parks, restoring historic sites, historic barns, agricultural fairs and the like. The Capital Bill is one of Vermont's most understated and largest economic stimulus packages and includes continues reconstruction of the state office complex in Waterbury that was destroyed by Tropical Storm Irene. This year's bill includes $144 million of bonded dollars over the next two years will be infused into all corners of the state.

 

 Tim and I were up in Bradford last Monday morning at The Local Buzz, House Majority Leader Sarah Copeland-Hanzas' coffee shop, to discuss issues before the legislature with folks from around Orange County.  Marie Ricketts of Strafford was kind enough to share this picture which includes Senator Jane Kitchel to my left and Tim (or, part of Tim) to my right.

 

 

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