WCAX.COM Local Vermont News, Weather and Sports-Should Vermont Raise Taxes?
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Montpelier, Vermont - December 19, 2008
There's a national recession and a $65 million budget deficit-- 10 percent of the total state budget. But wait-- this is not 2008, but also the situation in 1991.
A fiscal conservative, then Republican Governor Richard Snelling shocked many-- telling Vermonters to solve the problem he was proposing an income tax increase to go along with budget cuts.
17 years later some lawmakers are looking back to the future.
"We have raised taxes both times we experienced major recessions in the last 25 years-- both times-- and both times it worked," said Rep. Floyd Nease, D-Johnson.
There's about $46 million to cut this year with further revenue downgrades possible and next year's budget could already be $100 million short.
Lawmakers say they're considering possibly increasing the gas tax or the income tax.
"It has to be on the table; taxes have to be on the table, bonding has to be on the table, every option available to us because this is a crisis," Nease said. "We can't just cut our way out of the crisis."
Governor Snelling's daughter is now a state Senator dealing with the state's financial problems.
"I do remember my father saying you can't starve Grandma; which is just because you have a bad time you take away the safety net," said Sen. Diane Snelling, R-Chittenden County.
But Sen. Snelling is not sure raising taxes is the answer this time.
"A lot of people have been saying to me your dad did this so why shouldn't we do that again? And I just don't feel comfortable making a direct comparison that what worked in 1991 will work now. Because we have a higher tax burden, we have more services, the world is different-- there are lots of things," she said.
"I think it is fair to draw comparisons to 1991," Chris Graff said.
Graff was a reporter in 1991 covering Statehouse politics. He says Governor Snelling's approach was unprecedented-- he was not worried about political fallout. He also convinced Republican lawmakers to support the tax increase.
"Dick Snelling was fearless," Graff said. "He did not care, in 1991, he said if I am a one-term Governor so be it. But I have to do what's right and that includes the largest increase in taxes in Vermont history."
Governor Snelling was a mentor to Governor Douglas. But the two differ on taxes.
"Economists are quite clear-- raising taxes in a recession will make it longer and deeper so we have to do everything we can to meet the needs of Vermonters without taking more from their hard-earned paychecks," Douglas said.
One interesting dynamic from 1991 is that Republican Governor Snelling worked very closely with Democratic House Speaker Ralph Wright to come up with that package of tax increases and budget cuts. A legendary story was when the Governor walked over to the Speaker's office and they worked out a deal. Since then, I don't think a Governor from one party has visited a Speaker of another party in their office. All sides agree now that kind of attitude is needed to balance the budget -- and help Vermonters.
But while all the leaders want to solve the problem, right now they are entrenched in their ideals and it may take awhile for that spirit of cooperation to develop.
Kristin Carlson - WCAX News
