WCAX: Tax twist slows progress in Montpelier

May 10 – From WCAX

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Disagreements between the Shumlin administration and Vt. lawmakers Friday, despite last week’s agreement not to raise new taxes. And it means work at the Statehouse will spill into next week.

The Senate, the House and the governor still remained at loggerheads Friday evening, with no agreement. In fact, that Saturday adjournment they’ve been targeting for some months now is out the window. Legislators will come back Monday and Tuesday, and they say they still might not reach a tax agreement. That might fall and this year’s current policy may simply continue.

Those on the committee tasked with determining the state’s tax policy were initially scheduled to sit down to negotiate late Friday morning. Lawmakers want to create a minimum tax rate for high earners who pay percentages similar to the lowest earners. The administration meanwhile is set to fulfill its pledge of not raising any broad-based taxes. The impasse is likely to prevent the Legislature from meeting its self-imposed Saturday deadline for wrapping up the year’s work.

Tax plan negotiations continued behind closed doors at the Vermont Statehouse Friday, as leadership kept most legislators, reporters and the public in the dark. The impasse is over the handling of income tax changes.

Rep. Janet Ancel and Sen. Tim Ashe– chairs of the respective House and Senate Tax Revenue Committees– support measures which would guarantee Vermont’s highest earners don’t effectively pay the same rates as the state’s poor. The plan would not mean increases for all wealthy residents, and would grant breaks for about 72 percent of the population.

Administrators aren’t backing down from pledges not to raise any broad-based taxes, though Gov. Peter Shumlin did sign a gas and diesel tax hike.

Earlier this week he essentially threatened a veto of the House and Senate plan, though he would not use the word.

It’s unclear if the Legislature has the votes to overturn a veto.

Legislators argue their plan would mean tax breaks for about 70 percent of the population, but the governor’s not convinced that their plan wouldn’t raise rates. That’s because he sees their data is based on 2010– one of the worst years. So he’s worried that could raise about $10 million.