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YCQM: March 31, 2013 - WCAX.COM Local Vermont News, Weather and Sports-

YCQM: March 31, 2013

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BURLINGTON, Vt. -

>> HAPPY EASTER, I'M DARREN PARRIN, BRAIN DRAIN, NO MATTER WHAT CALL IT, YOUNG PEOPLE ARE FLEEING THE STATE. ROBERT HARTWELL, A DEMOCRAT FROM BENEFITINGTON COUNTY, AND SENATOR KEVIN MULLIN, A REPUBLICAN FROM RUTLAND COUNTY, JOIN US TO TALK ABOUT THAT AND OTHER ISSUES FACING THE LEGISLATURE, GENTLEMEN, THANK YOU FOR BEING HERE THIS MORNING.

>> GOOD TO BE HERE.

>> AND JOINING ME IN THE QUESTIONING IS OUR STATE HOUSE REPORTER. WELL, LET'S START WITH DARIN THAT, IS THE GREEN MOUNTAINS ARE GOING GRAY. HOW CAN THE STATE DEAL WITH THAT ISSUE MOVING FORWARD?

>> I THINK THE REAL SITUATION IS WE CREATE TO CREATE -- WE NEED TO CREATE OPPORTUNITY FOR OUR YOUTH TO STAY IN KWRERZ. WHEN PEOPLE THINK OF OLDER STATES YOU NATURALLY THINK OF A PLACE LIKE FLORIDA BUT YOU DON'T THINK OF VERMONT AND MAINE. IF YOU TAKE A LOOK AT THE BIGGEST EXODUS, WE ACTUALLY HAVE A SIGNIFICANT NUMBER OF PEOPLE MOVING IN THAT ARE SKEWED TOWARDS THE YOUNGER DEMOGRAPHICS. PEOPLE LEAVING ARE REALLY OUR YOUTH. IT'S THE PEOPLE IN THE 20-35 AGE GROUP. AND THE REASON FOR THAT IS A LACK OF HIGH PAYING JOBS. AND WE'VE HAD THIS YEAR WAS THE FIRST YEAR SINCE 1944 THAT WE HAD A NET LOSS OF POPULATION IN THE STATE OF VERMONT. A LITTLE BIT LESS THAN 600 PEOPLE. I THINK IT WAS EXACTLY 581 OR SOMETHING LIKE THAT. BUT IT TELLS ME THAT WE'RE LOSING THE TYPE OF PEOPLE WHO CAN BE PRODUCTIVE MEMBERS OF THE VERMONT LANDSCAPE WHO CAN CONTRIBUTE TO THE ECONOMY AND THEY'RE LEAVING BECAUSE THERE ARE OPPORTUNITIES ELSEWHERE THAT THEY CAN FIND GOOD PAYING JOBS.

>> THE OTHER PART OF THIS. I AGREE COMPLETELY WITH SENATOR MULLIN, BUT WE HAVE A VERY LARGE STATE GOVERNMENT BY COMPARISON TO OTHER STATES IN TERMS OF THE AMOUNT OF MONEY WE SPEND PER CAP TAX AND OUR TAX LOAD, AND SO FORTH, AND I THINK THAT WE ARE FAILING TO ADDRESS THE IMPACT OF THAT. WE HAVE A MAJOR PROPERTY TAX INCREASE COMING OUR WAY, AND WHAT WE'RE DOING EVERY YEAR NOW IS FINDING A FEW TAXES TO HOLD THAT TOGETHER, AND THIS IS GOING ON RIGHT NOW IN THIS CURRENT LENGTH SLATIVE SESSION. WE'RE GOING TO HAVE TO DEAL WITH THE SENATE, WITH THE TAX INCREASES THAT THE HOUSE PUT IN. THE HOUSE DID CUT BACK ON SPENDING PROPOSALS FROM THE ADMINISTRATION AND AS THE SENATOR SAID, WE DON'T HAVE MUCH IN THE CUPBOARD, WE'RE NOT SETTING OURSELVES UP WELL FOR 2015, AND UNTIL WE FACE THE EXTENT OF THE SPENDING AND TAXATION, I THINK WE'RE GOING TO HAVE PROBLEMS CREATING THE KIND OF ECONOMY THAT WILL KEEP PEOPLE HERE, AND THE DEMOGRAPHICS ARE REALLY SERIOUS. WE'RE LOSING PEOPLE FROM THE EARLY 20S TO THEIR MID 40S. OUR PUBLIC SCHOOL POPULATION IS DROPPING MEASURABLY EVERY YEAR, AND WE HAVE THE DISTINCTION AS -- I THINK THERE WERE ONLY TWO STATES LAST YEAR LOSING POPULATION OVERALL, AND WE'RE ONE OF THEM. I THINK WE'RE GOING TO HAVE TO FACE UP TO ARE WE CREATING A COMPREHENSIVELY GOOD ECONOMY FOR EVERYBODY, THE KIND OF ECONOMY THAT LIFTS ALL BOATS. WHAT WE ARE STKOG A TAX CUT HERE, DOING A LOT OF EXPENDTURES, BUT WE REALLY DON'T HAVE A COMPREHENSIVE STRATEGY TO DEAL WITH THE COLLAPSING DEMOGRAPHICS IN AN ECONOMY THAT DOESN'T KEEP THOSE PEOPLE HERE, THE PEOPLE ARE IN THE MIDDLE, IN A SENSE, WHO ARE, YOU KNOW, WONDERFUL WORKERS AND ALSO WILL HAVE FAMILIES. WHEN WE LOSE THOSE PEOPLE WE'RE LOSING SOMETHING BIG.

>> DEMOCRAT, REPUBLICAN, YET YOU BOTH SEEM TO AGREE THAT WHAT WE'RE FACING IS HIGHER TAX AND NOT ENOUGH GOOD PAYING JOBS TO KEEP YOUNG PEOPLE HERE. WHAT CAN YOU DO AS LAWMAKERS TO STEM THE TIDE?

>> I THINK WE'RE GOING TO HAVE TO FACE A COMPREHENSIVE DEAL WITH HOW WE DEAL WITH BUDGETS AND TAXES GOING FORWARD. WE'VE TALKED WITH MEMBERS OF THE SENATE ABOUT THE POSSIBILITY OF DOING MORE COMPREHENSIVE LEGISLATION NEXT YEAR TO DEAL WITH THE TAXES ON A BROADER BASIS THAN WE ARE NOW. AND TRYING TO CREATE AN ECONOMIC CLIMATE THAT REALLY IS ATTRACTIVE. WE HAVE BIG PROBLEMS HERE, BECAUSE WE'RE SMALL, AND THE CHALLENGE IS BIGGER. OUR WORKER'S COMPENSATION IS VERY EXPENSIVE. WE'VE BEEN TALKING A LOT ABOUT THAT IN THE FINANCE COMMITTEE, AND WE'RE BOTH MEMBERS OF THE COMMITTEE, ON TRYING TO ADDRESS THE COST OF WORKERS COMP, WHILE BEING FAIR AT THE SAME TIME. A LOT OF BUSINESSES TELL US THE COST OF OPERATING IS REALLY BIG. THE OTHER THING THAT THEY'RE WORRIED ABOUT IS WHAT ARE WE GOING TO DO IN THE FUTURE. ARE WE GOING TO HAVE EVER HIGHER TAXES, AND WE ARE OBVIOUSLY CONCERNED ABOUT WHERE THE HEALTH CARE SITUATION IS GOING. A LOT OF SMALL BUSINESSES ARE VERY NERVOUS, AND THEY'RE NOT GETTING REASSURING INFORMATION, BAR WE'RE KIND OF IN THE HIATUS AS WE CREATE THE EXCHANGE, THE HEALTH CARE EXPANSION IN THE FEDERAL LEGISLATION. BUT I THINK THIS IS ONLY ADDRESSED BY HAVING A RULE TO PUT IN IN SOMETHING BROAD-BASED, BECAUSE RIGHT NOW WE ARE RAISING TAXES ON SOFT DRINKS AND CIGARETTES AND JUST TRYING TO HOLD IT TOGETHER AND THE PROBLEM NEXT YEAR IS GOING TO BE BIGGER.

>> YOU MENTIONED THAT THE HOUSE DIDN'T FULLNY FUND SOME OF THE PROPOSALS THAT THE GOVERNOR CAME FORWARD WITH, SPECIFICALLY HE HAS MENTIONED STEM, WHICH YOU FIT INTO YOUR QUESTION THERE, AS ONE OF THE MEANS TO KEEP THOSE YOUNG PEOPLE IN VERMONT. DO YOU THINK THAT'S A VIABLE SOLUTION? CERTAINLY IT WOULD TAKE MORE SPENDING BUT DO WE HAVE TO SPEND TO GET OUT OF THIS HOLE OR IS THAT THE WRONG APPROACH?

>> WE HAVE HUGE PROBLEMS IN THE AREA OF SCIENCE AND TECHNOLOGY AND MATH. AND ONE OF THE BUSINESS THAT IS HAVE COME BEFORE THE BUSINESS ECONOMIC DEVELOPMENT COMMITTEE, THE OPPORTUNITIES AND CHALLENGES MOVING FORWARD, THEY TALKED ABOUT THE NEED THAT THERE IS NOT A WORK FORCE THAT CAN MEET WHETHER ITS ENGINEERING DEMANDS OR TECH SKILLS NECESSARY FOR THEM TO GROW, SO THEY'RE TRYING TO BRING PEOPLE IN TO FILL THOSE JOBS, RATHER THAN FILL THEM FROM WITHIN. SO WHAT WE CAN DO IS WE CAN DO WORK FORCE DEVELOPMENT TOOLS, WORKING WITH THE STATE COLLEGES, WORKING WITH REGIONAL TECH CENTERS, TO TRY TO PUT IN PLACE THE PROGRAMS. THE GOVERNOR NAILED THAT ON THE HEAD. AND WE NEED TO DO THAT. AND I THINK THAT'S ESSENTIAL. WHEN YOU TAKE A LOOK AT T. THERE ARE TWO THINGS THAT WE IN THE SENATE HAVE TO DO MOVING FORWARD. NUMBER ONE, WE HAVE TO SAY THAT WE CAN'T KEEP SPENDING WHAT WE'RE SPENDING. AND THERE ARE GOING TO HAVE TO BE HARD DECISIONS MADE. BUT I DON'T THINK THAT THE SENATE IS GOING TO BUY THE PACKAGE THAT CAME OVER FROM THE HOUSE, AND I HAVE TO GIVE A LOT OF CREDIT TO THE HOUSE, BECAUSE THE GOVERNOR LEFT THEM IN A VERY BAD. WHEN THE GOVERNOR PRESENTED HIS BUDGET HE SPENT EVERY SINGLE DOLLAR OF RAINY DAY FUNDS, PROMISED A BUNCH OF NEW PROGRAMS, BUT THEN HAD SOURCES OF FUNDING THAT REALLY COULDN'T EVEN MEET THE REVENUE PROJECTIONS THAT WERE GIVEN TO THEM. SO THE HOUSE IS DEALING WITH A BAD SITUATION. AND I'M HOPEFUL THAT THE SENATE CAN EVEN DEAL FURTHER, AND SO THAT WE'RE NOT GOING TO GROW THE BUDGET AT FIVE-POINT -- WHATEVER THE GOVERNMENT RECOMMENDED, 4.7 FROM THE HOUSE, BUT LET'S PUT IT AT THE RATE THAT'S CONSISTENT WITH THE CPI GROWTH OR GROWTH IN MEDIAN INCOME IN VERMONT, AND LET'S GET IT DOWN TO A LITTLE BELOW 3 PERCENT, AND THEN WE HAVE TO WORK ON THE ECONOMIC DEVELOPMENT SIDE. AND WE HAVE SOME HUGE OPPORTUNITIES IN THE STATE OF VERMONT. WE'VE GOT A GROWING INDUSTRY IN THE CRAFT BREWERS. THE CRAFT BEERS AND THE DISTILLERS ARE BLOSSOMING ALL OVER, WE'RE STARTING TO GET TO THE POINT WHERE WE COULD FULLY HAVE COME PEOPLE COME TO -- ACTUALLY COME TO THE STATE FOR TOURISM.

>> THAT COULD ATTRACT YOUNG PEOPLE, TOO.

>> ABSOLUTELY. WE'RE AT THE POINT WHERE WE COULD HAVE TOURS TO THE FINGER LAKES REGION OF NEW YORK, WITH THE WINE COUNTRY HERE IN VERMONT. WE HAVE IN GREENSBORO, VERMONT, HILLS FARM, THEIR CRAFT BEERS HAVE BEEN GIVEN EIGHT OF THE TOP 100 BEST BEER THE IN THE WORLD DES NATION, THE NUMBER ONE BEER IN THE WORLD, AND WHEN HE RELEASES A NEW PRODUCT, PEOPLE DRIVE FOR MILES AND WAIT TWO HOURS TO GET THAT. THOSE ARE THE TYPE OF THINGS THAT OUR GROWTH -- THAT ARE GROWTH OPPORTUNITIES. WE TALKED WITH GAME SOFTWARE DEVELOPERS, THIS IS A CLEAN INDUSTRY WITH THE AVERAGE PAY, A LITTLE OVER $80,000 A YEAR, AND THEY CAN DO THIS HERE IN VERMONT. VERMONT IS IDEALLY LOCATED, BECAUSE IT'S RIGHT IN THE NEXUS BETWEEN MONTREAL, BOSTON AND NEW YORK, THAT WOULD ALLOW PEOPLE TO DEVELOP THE GAMES HERE, BUT BE ABLE TO STILL ACCESS THE DISTRIBUTION NETWORKS AND WITH MOBILE APPS AND EVERYTHING ELSE GROWING THAT INDUSTRY AT A FAST PACE, IF WE CAN BRING SOME OF THOSE PEOPLE ELSEWHERE TO VERMONT THAT ARE SICK OF TAKING AN HOUR AND A HALF, DRIVING IN AND OUT OF THE CITY TO GO TO WORK, WE WILL HAVE CREATED A NEW INDUSTRY THAT COULD REALLY REACH SOME -- REAP REWARDS FOR US, AND WE HAVE TO DO THAT, WHEN WE HAVE THINGS LIKE THE CAPTIVE INSURANCE INDUSTRY THAT'S BEEN A HUGE SUCCESS FOR THE STATE OF VERMONT, BUT DUE TO AN INADVERTENT MISTAKE IN WASHINGTON, WE'VE ACTUALLY SEEN A LITTLE BIT OF DECLINE IN THAT GROWTH, BECAUSE OF THE NEW RULES COMING OUT OF WASHINGTON. SO WE'RE HOPEFUL THAT OUR CONGRESSIONAL DELEGATION CAN STRAIGHTEN THAT OUT SO THAT WE CAN CONTINUE OUR GROWTH PATTERN, BECAUSE THOSE TYPE OF CLEAN INDUSTRIES, IF WE CAN GROW THEM, WE'LL HAVE GROWN THE REVENUE SIDE OF THE EQUATION AND CAN AFFORD THE PROGRAMS ON THE EXPENSE SIDE.

>> I WANT TO GET BACK TO THE TAX PACKAGE AT SOME POINT, BUT I'D LIKE A RESPONSE FROM YOU ABOUT SOMETHING THAT SENATOR MULLIN JUST SAID, THAT THE GOVERNOR REALLY PUT THE HOUSE IN A BIT OF A PICKLE WITH SOME OF THESE IDEAS. AND FORCED THEM TO RAISES TAXES. DO YOU AGREE?

>> WELL, CONSIDERABLY, YES. IT'S PUT THEM IN A BOX, AND YOU PUT ME IN A BOX. BUT ACTUALLY, YES. IN THE SENSE THAT SOMEWHAT TO MY SURPRISE, THE ADMINISTRATION PROPOSED CONSIDERABLE INCREASED SPENDING AT A TIME WHEN WE KNOW THE REVENUES TO THE STATE ARE GROWING VERY SLOWLY AND WE'VE KNOWN THIS FOR SOME TIME AND THERE'S NOT MUCH EVIDENCE THEY'RE GOING TO ACCELERATE POSITIVELY MUCH. SO I THINK THAT THE ADMINISTRATION WAS FOCUSED ON A FEW PROGRAMMATIC IDEAS AND -- WHICH MAY OR MAY NOT BE FINE. I THINK THERE ARE GOOD IDEAS, AND CERTAINLY THE FOCUS ON EDUCATION, AND THE THINGS THAT SENATOR MULLIN WAS TALKING ABOUT, THE GOVERNOR WAS CLEARLY FOCUSED ON THAT IN HIS ADDRESS AT THE BEGINNING OF THE SESSION. BUT HE DID PUT THE HOUSE IN A BIT OF A BOX, AND WHAT THEY DID WAS THEY CUT BACK ON SOME OF THE PROPOSALS, THEN THEY CAME UP WITH THIS COCKTAIL OF TAX INCREASES, AND WHICH REALLY PUT THE HOUSE IN THE POSITION OF HAVING TO DO THAT FOR MORE PERSPECTIVE, AND I THINK THE SENATOR IS RIGHT, THE HOUSE WAS IN A TOUGH SPOT AND THEY INITIATED THE TAXING AND SPENDING FROM THE HOUSE, SO THEY ARE GOING TO CHANGE IT, IF I HAD TO GUESS. BUT I THINK THE PROBLEM IS, AND EVERYBODY IS IN ON IT NOW, WHICH ISN'T GOOD, IS THAT THERE ISN'T ANYTHING LEFT IN THE CUP BOARD, AND IN 2015, JUST THE NORMAL FURTHER DEMANDS OF ENTITLEMENTS IN ALL OF THE HANDS THAT ARE OUT OR NEED FEEDING IN THE STATE HOUSE IS A REAL PROBLEM, AND WE'RE GOING TO HAVE TO MAKE SOME TOUGH DECISIONS THAT ARE PROBABLY NOT GOING TO BE POPULAR, AND THEY'RE NOT GOING TO BE POPULAR WITH A LOT OF PEOPLE, BUT THE FACT REMAINS THAT I THINK WE'VE DONE -- WE'RE IN THE PROCESS OF DOING IT IN SENATE, AND I THINK THAT SENATOR MULLIN HAS AN IMPORTANT POINT, MAYBE WE SHOULD WORK OVERTIME TO SEE THEY MITIGATE THIS, BECAUSE WE ARE REALLY SETTING OURSELVES UP FOR A FISCAL CRISIS IN 2015. IF REVENUES GROW SLOWLY, SPENDING GOES FASTER, WE'RE FACING A CRISIS. YOU KNOW, WE'VE SHOWN THAT WE'RE PRETTY GOOD AT RECOVERING FROM THINGS, GIVEN THE IRENE SITUATION. WE'RE VERY GOOD AT THAT AND THAT WAS A COMPLIMENT TO US, AFFECTED US POSITIVELY, BUT WE'VE HAD TO INVEST A LOT AND WE'RE NOT DONE. AND THE RESERVES ARE PRETTY MUCH GONE, AND THAT'S NOT PRUDENT LOOKING FORWARD.

>> THE HOUSE PLAN HAS ABOUT 3 MILLION IN RESERVE AS CURRENTLY WRITTEN. HOW MUCH WOULD YOU LIKE TO SEE PUT ASIDE.

>> WE USED TO TALK ABOUT HAVING $50 MILLION PUT ASIDE. I REMEMBER WHEN -- THE SENATOR REMEMBERED CORRECTLY, HE'S BEEN HERE LONGER THAN I HAVE, BUT I SEEM TO RECALL THAT -- AND I FORGET THE PERCENTAGE, THE GOOD GOAL, OF HOW MUCH OF THE RESERVE WE WOULD HAVE BASED ON THE SPENDING WE WOULD BE DOING BUT IT WOULD BE FAR MORE THAN 3 MILLION.

>> 3 MILLION DOESN'T BUY YOU MUCH THESE DAYS.

>> 10 OR 15 DOESN'T BUY YOU MUCH. IT SHOULD BE 50, 60,' $70 MILLION AT ONE POINT IT WAS. EVEN IN MY TENURE IN THE SENATE, FOR SEVEN YEARS. THIS IS NOT GOOD AND THERE'S NO WAY TO FALL BACK, GOING INTO THE NEXT FISCAL YEAR, EXCEPT TO MAKE VERY TOUGH SPENDING CHOICES, AND I THINK WE'RE GOING TO HAVE TO MAKE THEM.

>> WHAT ARE SOME OF THOSE CHOICES YOU THINK YOU FOLKS ARE FACING?

>> BOTH OF US HESITATE. I THINK THE WHOLE THING HAS TO BE LOOKED AT. THERE ARE MANY AREAS, DOING A LOT OF GOOD, AND YOU HAVE TO HAND OUT SOME BAD NEWS. AND I'M NOT SURE WHO GOES FIRST IN THE BAD NEWS. I HESITATE TO SAY, SIMPLY BECAUSE -- OR LET'S JUST CUT EVERYTHING ACROSS THE BOARD. WE ALREADY KNOW WE SHOULDN'T DO THAT BASED ON OUR CONVERSATION, BECAUSE THE EMPLOYMENT, TRAINING AND SYSTEM, THE STEM, AND THE ENCOURAGING THESE INDUSTRIES THAT REALLY ARE GOOD, CLEAN, AND ARE GOOD PAYING JOBS, JOB TRAINING AND DEVELOPMENT IS REALLY GOOD INVESTMENT. SO THAT'S PROBABLY NOT THE PLACE TO CUT. BUT THERE ARE A LOT OF OTHER THINGS TO BE LOOKED AT. IT'S GOTTEN TO BE A PRETTY COMPLICATED BUDGET. IT'S ALL OVER -- WELL OVER $5 BILLION FOR SUCH A SMALL STATE, AND THAT'S THE PROBLEM, THE FEDERAL MONEY IS GOING TO BE LESS GOING FORWARD.

>> ONE OF THE TAXES WE HAVEN'T TALKED ABOUT IS THE PROPERTY TAX, AND THE ANALYSIS THAT WE'VE BEEN LOOKING AT IN SENATE FINANCE SHOWS THAT ARE NOT INCOME-SENSITIZED ARE GOING TO SEE A 6.8% INCREASE IN THEIR PROPERTY TAXES. NOW, THAT IS, I THINK, THE WORST TAX INCREASE THAT WE'RE SEEING OUT THERE, AND I THINK THAT WE HAVE TO TRY TO FIND A WAY IN THE SENATE TO MITIGATE PROPERTY TAX INCREASES, AND THE ONLY WAY YOU CAN DO THAT IS YOU'RE GOING TO HAVE TO BE WILLING TO CUT SOME PROGRAMS, AND LIKE SENATOR SAID, I DON'T THINK THE ACROSS THE BOARD CUT MAKES SENSE. WE HAVE TO TARGET THOSE PROGRAMS THAT WE THINK WILL WORK AND FULLY FUND THEM, RATHER THAN NICKEL AND DIME THOSE PROGRAMS, BUT MAKE HARD CHOICES, AND SOME PEOPLE ARE GOING TO BE UPSET AND IT'S GOING TO BE UNPOPULAR, BUT IT'S GOING TO BE A HECK OF A LOT MORE POPULAR THAN PASSING A GAS TAX ON THE PEOPLE 569.8% INCOME IN THE INCOME TAX, HALF PERCENT INCREASE IN THE MEALS TAX, AN INCREASE IN THE CIGARETTE TAX, AN INCREASE IN THE BOTTLED WATER AND BEVERAGES AND CANDY, YOU KNOW. IT'S GOT TO STOP.

>> ARE YOU SURPRISED AT THAT? THAT HALF PERCENT INCREASE IN THE MEALS TAX, THE ONE YEAR SUM SET THAT'S ATTACHED TO THAT, DID THAT STRIKE YOU AS AN ODD CHOICE?

>> I THOUGHT IT WAS EXTREMELY ODD, IN THAT WHY WOULD YOU GO TO THE WELL FOR A HALF A PERCENT INCREASE, AND THEN ONLY HAVE IT FOR A YEAR? YOU'RE GOING TO HAVE TO SPEND MONEY TO CHANGE ALL THE FORMS FOR THE BUSINESSES THAT ARE DOING THE COLLECTION OF THE TAX REAL ESTATE, SENDING IT IN, THEN A YEAR LATER REDUCE IT, AND I CAN'T HELP BUT GO BACK TO THE 1960S WHEN THE 3 PERCENT SALES TAX WAS A TEMPORARY TAX, AND WE ALL KNOW WHAT HAPPENS. EVEN THOUGH WHEN YOU HAVE A PERCENTAGE TAX LIKE THE SALES TAX OR THE ROOM AND MEALS TAX, IT SHOULD GO UP NATURALLY BECAUSE OF PRICE INFLATION, WE STILL SEE THAT INCREASE GOING UP, CONSISTENTLY. IF YOU TAKE A LOOK, EVERY FEW YEARS, WE SEE SOMEBODY PROPOSING AN INCREASE IN EITHER A SALES TAX OR THE ROOM AND MEALS TAX. YOU KNOW, IN SOME RESPECTS, IT WOULD HAVE MADE MORE SENSE IF THE HOUSE JUST SAID LET'S JUST MAKE IT 10, BECAUSE THAT'S WHERE WE'RE AT WITH ALCOHOLIC BEVERAGES AND WE'LL HAVE THAT STRAIGHT 10 PERCENT ACROSS THE BOARD FOR ROOM AND MEALS GOING FORWARD. I DON'T THINK PEOPLE REALLY LIKED IT, BUT IT MAKES A LOT MORE SENSE THAN BEING A HALF A PERCENT INCREASE FOR ONE YEAR ONLY.

>> AND WHEN WE THINK ABOUT THAT -- I AGREE, I THINK THAT IT'S PROBABLY -- IT'S A SET -- WE'LL BE BACK A YEAR FROM NOW WITH THE SAME FISCAL PROBLEM, WITH AN INCREASE IN THE MEALS TAX AND THIS IS AN ISSUE FOR SOME OF US, CERTAINLY IN THE DISTRICT I COME FROM, WHERE WE HAVE A LOT OF VISITORS, WHO HELP OUR ECONOMY A LOT WITH WHAT THEY PURCHASE, AND THEY HAVE CHOICES, OTHER STATES AND OTHER PLACES TO GO. SO THIS IS A -- I THINK THAT IT'S ANOTHER EXAMPLE OF WHAT IS NOT A VERY ENORMOUS AMOUNT OF REVENUE TO CREATE A LOT OF ANGST IN THE TOURISM INDUSTRY, WHICH IS BIG IN VERMONT, BUT WORST OF ALL, IT'S A PIECE OF THIS KIND OF BALING WIRE APPROACH. FINDING SOMETHING MORE TO PUT A TAX ON. FOR EXAMPLE, WE'RE ALL STKUFRPBLGING SMOKE, WE KNOW THE CON -- DISCOURAGING SMOKING, WE KNOW THE CONSEQUENCES OF THAT, AND THEY WANT TO INCREASE THE TAX BY 50 CENTS, AND I'M NOT SURE WHERE THE NUMBER CAME FROM. I THINK IT WAS PROBABLY PICKED BECAUSE IT'S A NICE, ROUND NUMBER BUT THERE ARE TREMENDOUS RAMIFICATIONS FOR HOW HIGH THE CIGARETTE TAX IS, COMPARED TO CONNECTICUT OR NEW HAMPSHIRE, WHERE I COME, FROM BENNINGTON COUNTY, WHERE THE NEW YORK STATE TAX IS VERY, VERY, VERY HIGH, SO WE GENERATE A LOT OF BUSINESS FROM NEW YORK. PEOPLE COME OVER TO BENNINGTON AND BUY THINGS, AND WHEN THEY COME TO BUY CIGARETTES THEY BUY OTHER THINGS.

>> THAT'S A PIECE WE DON'T HEAR VERY OFTEN. WE'RE TYPICALLY HEARING ABOUT THE NEW HAMPSHIRE BORDER.

>> THE BORDER IS HUGE FOR BOTH DISTRICTS, AND IF YOU TAKE A LOOK AT TOWNS IN MY DISTRICT, LIKE FAIR HAVEN, PEOPLE COME FROM NEW YORK TO BUY GAS BECAUSE IT'S 15 CENTS CHEAPER A GALLON TO COME ACROSS THE VERMONT BORDER FROM NEW YORK AND BUY GAS AND WHILE THEY'RE HERE, THEY'RE PICKING UP CIGARETTES, THEY'RE PICKING UP BEVERAGES, AND OTHER THINGS. SO IT DOES HAVE AN IMPACT ON OUR SIDE. FROM THE LAKE, YOU DON'T GET THE CROSS-BORDER TRAFFIC LIKE WE DO BUT IN OUR DISTRICT, IT'S HUGE.

>> WE NEED TO TAKE

>> EVERYONE, WE ARE TALKING ABOUT SENATORS MULLIN AND HARTWELL. WE LEFT OFF WITH TALKING ABOUT THE TAX PROPOSAL COMING OUT OF THE HOUSE. THE GAS TAX DREW A LOT OF ATTENTION EARLIER THIS YEAR AS THEY TRY AND FILL A PRETTY GAPING HOLE IN THE TRANSPORTATION BUDGET. TALK TO ME ABOUT THAT PROPOSAL. IT'S CURRENTLY SITTING IN THE SENATE TRANSPORTATION COMMITTEE. I'M SURE IT WILL BE IN FRONT OF THE FULL BODY SOON ENOUGH. WHAT ARE YOUR THOUGHTS ON THE TRANSPORTATION BUDGET?

>> I THINK THAT WE'RE VERY LUCKY IN THE SENATE TO HAVE A VETERAN LAWMAKER, SENATOR DICK MASELL, CHAIRING THE TRANSPORTATION COMMITTEE AND DICK DOESN'T LIKE TAX INCREASES, AND HE'S DOING EVERYTHING THAT HE CAN TO TRY TO KEEP THAT DOWN. WITH THAT BEING SAID, IF THERE'S ONE AREA THAT WE HAVE TO MAKE SURE THAT WE DON'T LEAVE OFF THE TABLE IS WE HAVE TO HAVE THE FUNDS IN THE BUDGET TO MAKE THE MATCHING FEDERAL FUNDS FOLLOW THROUGH WITH US, BECAUSE WE HAVE A HUGE NEED TO KEEP OUR BRIDGES, OUR ROADS, OUR CULVERTS UP TO DATE, ESPECIALLY AFTER THE FLOOD LAST YEAR. WE'VE MADE A LOT OF PROGRESS, BUT A LOT OF THAT WORK WASN'T PERMANENT WORK SO, WE'VE GOT TO GO BACK AND MAKE SURE THOSE ROADS ARE PERMANENTLY IN PLACE FOR THE FUTURE, GOING FORWARD. SO I THINK THAT THERE WILL HAVE TO BE AN INCREASE MOVING FORWARD, I THINK THAT IT'S SMART TO GO TO A LITTLE BIT OF A PERCENTAGE, SO THAT IT GROWS WITH INFLATION, BECAUSE WE'VE GOT DECLINEING USE OF GASOLINE, WE'RE SEEING SMART VEHICLES, THINGS LIKE THAT, BUT WE NEED TO MAINTAIN OUR ROADS AND BRIDGES. SO SOMETHING HAS TO GIVE THERE. THE ONE THING WE CAN DO TO MAKE IT LESS OF AN INCREASE IN THE GAS TAX IS TO PURIFY THE TRANSPORTATION FUND, MAKE SURE THOSE FUNDS THAT PEOPLE RELATE TO, TRANSPORTATION ISSUES, ARE ACTUALLY GOING TO THE TRANSPORTATION FUND AND NOT OTHER AREAS OF GOVERNMENT, AND IF WE CAN DO THAT, THEN WE CAN MITIGATE SOME OF THE INCREASE THAT'S NECESSARY TO DO THE WORK THAT WE NEED TO DO.

>> CAN THAT BE DONE WITHOUT COMPLETELY HAMSTRINGING THE EDUCATION FUND?

>> I BELIEVE THAT'S LIKE A 30RBGS $40 MILLION TRANSFER.

>> IT DEPENDS ON IF YOU ARE ABLE TO FIND A WAY TO BACKFILL THE EDUCATION FUND. AGAIN, IT GETS DOWN TO MAKING HARD CHOICES. I THINK WE HAVE TO PROTECT THE EDUCATION FUND. BUT I AGREE THAT THERE'S GOING TO HAVE TO BE SOME KIND OF A TAX INCREASE ON MOTOR FUELS. IT'S INTERESTING THAT WE DON'T TALK MUCH ABOUT THE FACT THAT WE HAVE A LOT OF PEOPLE WORKING ON PROJECTS. THEY BECOME VERMONT TAXPAYERS THEMSELVES. SO THERE ACTUALLY IS SOME POSITIVE EFFECT THAT IS GENERATING REVENUES TO THE STATE FOR ALL THE PEOPLE THAT ARE WORKING ON THESE PROJECTS. AND IF WE DON'T DO SOMETHING ABOUT THIS, WE LOSE A -- WE LEAVE A LOT OF FEDERAL MONEY BEHIND, IT WILL BE $50 MILLION THAT WE WOULD NOT RECEIVE, AS SENATOR MULLIN POINTS OUT, IF WE DON'T STEP UP TO THE PLATE WITH ADDITIONAL REVENUES OURSELVES. SO WE'RE REALLY IN A TOUGH SPOT, AND THE TRANSPORTATION COMMITTEE I SERVED ON FOR THREE YEARS IS REALLY -- REALLY WORKS HARD TO TRY TO MITIGATE THESE PROBLEMS, SO IT GOT TO A POINT WHERE WE HAVE TO DO SOMETHING. OUR CARS ARE MORE EFFICIENT, WE'RE GOING TO HAVE TO ADDRESS HOW ALTERNATIVE FUELS MAKE A CONTRIBUTION, IF YOU HAVE MORE ELECTRIC CARS AND VEHICLE THAT IS ARE EFFICIENT, AND EVEN ALL OF THE FLEET IS JUST SO MUCH MORE EFFICIENT, SO WE'RE REALLY LOSING REVENUE, BUT WE'RE STILL DAMAGING ROADS. SO I THINK WE'VE GOTTEN TO THE BREAKING POINT HERE, AND I THINK THAT HAVING SOME KIND OF A FLOATING MECHANISM IN THERE NOW, IN TERMS OF HOW TO CALCULATE IT -- BUT IT'S TOUGH, BECAUSE THE STATE IS SO -- THE TRANSPORTATION IS SO REAL. PEOPLE CANNOT GET AROUND IN MANY AREAS, IN RURAL AREAS. SO HOW DO WE MITIGATE THAT, SOMETHING THAT WOULD BE ADVANTAGEOUS FOR PEOPLE THAT DRIVE FAR, TO HAVE AN EFFICIENT CAR, BUT IT'S COMPLICATED TO SET THOSE SYSTEMS UP, AND WE HAVE TO ACT NOW BECAUSE WE'VE GOT A LOT OF PROJECTS UNDERWAY THAT ARE -- QUITE A FEW OF WHICH WOULD STOP IF WE DON'T DO SOMETHING.

>> DO YOU THINK ULTIMATELY THE SOLUTION LIES WITH A FEDERAL MOVE OF VEHICLES TRAVELED, OR A GAS TAX SET UP FOR TRANSPORTATION BUDGET?

>> THAT'S DEFINITELY SOMETHING TO LOOK AT. IT'S CERTAINLY ONE ALTERNATIVE AND MAYBE WE GO THERE AT SOME POINT. A LOT OF STATES ARE LOOKING AT THAT SERIOUSLY NOW AS AN ALTERNATIVE, AND I DON'T KNOW WHAT KIND OF REVENUE IT GENERATES. THE ONE FEATURE ABOUT IT THAT'S REALLY PRETTY GOOD IS IT SEEMS FAIR, IT KIND OF FALLS ON THE CARS THAT ARE DRIVEN THE MOST, AND THE -- AND IT REWARDS YOU FOR BEING CLOSER TO MASS TRANSPORTATION OR DRIVING LESS OR DRIVING THE MOST EFFICIENT CAR POSSIBLE. I'M NOT SURE HOW IT WOULD TURN OUT, BUT THE MECHANISM FOR DOING THAT CAN'T BE VERY FAR AWAY, WHEN YOU HAVE THE SYSTEMS THAT WE HAVE NOW. JUST GPS AND ALL THE TECHNOLOGY IS VERY CLOSE TO OUR BEING ABLE TO DO THAT. SO I THINK WE'RE GOING TO HAVE TO MAKE THAT DECISION AT SOME POINT AS TO WHETHER WE GO TO THAT SYSTEM OR SOMETHING SIMILAR.

>> DO YOU THINK THE WHOLE UNITED STATES WOULD HAVE TO MOVE TO THAT SYSTEM TO MAKE IT WORK? IS THAT SOMETHING THAT COULD WORK WITH ONE STATE EXPERIMENTING IT WITH OTHER STATES BEHIND?

>> I DON'T KNOW. IT'S COMPETITION AMONG THE STATES AS WE TALKED ABOUT BEFORE, BUYING THE PRODUCT THAT IS PEOPLE COME TO VERMONT TO BUY FROM OTHER STATES. DEPENDING UPON THAT PRICE, I THINK IT DEPENDS ON HOW THE GAS TAX IS IN THE NEIGHBORING STATE. I'M NOT SURE HOW YOU CALCULATE THE COMPARISON. BUT WE HAVE TO REMEMBER, BECAUSE OF THE FUEL STORES PUT OUT AND INCENTIVES, I THINK YOU'RE GOING TO FIND THAT THE PRESSURE IS ON FOR CONSISTENCY.

>> WE HAVE ABOUT TWO MINUTES LEFT. I WANT TO GET YOUR TAKE. IT'S A BUSY WEEK, UPCOMING HERE. WHAT DO YOU THINK IS GOING TO BE THE BIGGEST CHALLENGE? I'LL START WITH YOU SENATOR MULL STKPWHRAOEUPB I THINK THE THE BIGGEST CHALLENGE FOR THE SENATE IS WE HAVE THE REVENUE PACKAGES THAT HAVE COME OVER FROM THE HOUSE AND WE HAVE TO DEAL WITH THEM AND WE HAVE TO START WORKING VERY QUICKLY. WE ONLY HAVE SIX WEEKS LEFT, AND SOME WOULD LIKE US TO DO THAT IN FIVE, AND SO WE HAVE TO MOVE QUICKLY TO GET OUR PACKAGE TOGETHER, SO THAT THERE WILL BE TIME FOR THE CONFEREES TO HAMMER IT OUT, AND NEGOTIATIONS ARE GOING TO HAVE TO TAKE PLACE BETWEEN THE HOUSE, SENATE AND THE GOVERNOR, TO GET TO PRACTICAL SOLUTION.

>> I AGREE. I THINK THE FINANCIAL ELEMENT IS REALLY CRITICAL AND FIGURING HOW TO MAKE AN AGREEMENT WITH THE HOUSE THAT MAKES SENSE ON THE TAX INCREASES AND THE SPENDING, AND AS THE SENATOR POINTS OUT, THE ADMINISTRATION IS IN IT AS WELL, OF COURSE. SO THAT'S GOING TO TAKE A LOT OF HARD WORK, BECAUSE I THINK THERE ARE GOING TO BE SOME PROBLEMS IN THE SENATE WITH THE BUDGET AND THE TAX PROPOSALS FROM THE HOUSE. DESPITE THEIR HARD WORK. THERE WAS A LOT OF WORK ON THIS. BUT I THINK THAT WE'RE GOING TO HAVE SOME REAL ISSUES IN TRYING TO AGREE ON THAT.

>> THE GOVERNOR PROMISED NO BROAD-BASED TAXES. DO YOU THINK THE SENATE COMES FORWARD WITH THE BASE TAX HIKES?

>> I MOVE TO JOIN THE GOVERNOR IN HIS PROMISE.

>> I AM TOO. ONE OF THE THINGS THAT TROUBLES ME IS THE BROAD-BASED TAX NEVER SEEMS TO INCLUDE THE PROPERTY TAX. WE'VE ALREADY HAD SIGNIFICANT PROPERTY TAX INCREASES IN THE LAST COUPLE OF YEARS AND WE'RE GOING TO HAVE MORE, AND IF YOU ASK THE AVERAGE HOMEOWNER WHEN THEY THINK THE PROPERTY TAX IS A BROAD-BASED TAX, EVEN IF IT TECHNICALLY ISN'T, THEY ARE GOING TO SAY THOSE ARE BIG ITEMS, AND WE'RE NOT ADDRESSING THEM FAST ENOUGH.

>> SENATOR HARTWELL, SENATOR MULLIN, THANK YOU BOTH FOR JOINING US ON THIS EASTER SUNDAY. WE APPRECIATE IT.

>> IT'S AN PLEASURE. HAPPY EASTER, EVERYONE.

>> THANK YOU.

>> AND THANK YOU FOR JOINING US AT HOME, EVERYONE. WE'LL SEE YOU SOON. CAPTIONING PROVIDED BY CAPTION ASSOCIATES, LLC WWW.CAPTIONASSOCIATES.COM

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