Budget battle at Vt. Statehouse - WCAX.COM Local Vermont News, Weather and Sports-

Budget battle at Vt. Statehouse

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MONTPELIER, Vt. -

Legislative leadership targeted May 11 for the last day of work at the Vermont Statehouse. But, with 10 days to go, large divides over state fiscal plans remain.

Sen. Tim Ashe's finance committee proposes to raise an additional $10 million this year, largely through tax deduction and exemption changes. That's just enough to fund a 4.5 percent budget increase to $1.36 billion, put forth by Sen. Jane Kitchel's appropriations committee. But Sen. Anthony Pollina worries about cut backs to programs benefiting lower and middle class residents

"The question we have to grapple with as members of this body is where the heck did the money go," said Pollina, P-Washington County.

"We could clearly raise $21 million in additional income taxes, but that doesn't mean we should," said Ashe, D/P-Chittenden County.

The House's version raises $21 million, leaving excess funds for reserves by focusing largely on temporary and permanent tax hikes.

Neither the House nor Senate plans raise as much as the governor's January budget proposal.

"Sometimes you look at a tax bill and you say what's in it and maybe you like some things you don't like others, sometimes it's what's not in a bill," Ashe said.

Senators and representatives largely ignored the governor's proposal to tax break-open tickets, and reassign $17 million in funds currently bound for the Earned Income Tax Credit.

"As we come out of fragile recovery, if you really want to throw the brakes on a recovery, raise every single tax for Vermonters, it's a bad idea," said Gov. Peter Shumlin, D-Vermont.

The governor remains adamant that broad-based taxes should not go up, especially on the highest earners, who Shumlin says already pay too much. Others say the wealthy residents often pay less than 3 percent of their income, and say surveys show it's the poor being driven out.

It's unclear what the final plan will look like, but the chances of making the May 11 deadline are shrinking with each passing day.

While the House plan raises about $11 million more than the Senate's plan, it should be noted that a substantial cigarette tax hike is being considered separately in the Senate and would generate millions more in revenue than is currently accounted for in projections.

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