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Lawmakers, citizens criticize break-­open ticket tax proposal

MIDDLEBURY — There was continued controversy at Monday’s Legislative Breakfast surrounding Gov. Peter Shumlin’s proposed surcharge on break-open tickets. The 10-percent surcharge on the $1 tickets — sold by many local nonprofits to raise money for charitable causes — is designed to raise what Shumlin projects as $6 million for weatherizing Vermont homes.
Shumlin has stated that the surcharge would apply to the producers of the tickets and not on the proceeds raised from the nonprofit agencies who sell them, such as local American Legion posts.
But Legion members continue to voice concerns about the tax, fearing the break-open ticket producers will pass the surcharge on to groups that sell the tickets. Some voiced their feelings to lawmakers in the breakfast at the Middlebury American Legion.
“I am all in favor of weatherization; it is high on my list of priorities,” said Addison resident John Ball, a member of American Legion Post 14 in Vergennes. “But I don’t think funding weatherization with money that is going directly to the community, in supporting these community efforts that would not otherwise be supported, is the way the way to fund the weatherization program. We can find other ways.”
Ball noted that Shumlin has disputed some civic clubs’ projections that the surcharge could cut their break-open ticket revenues by more than half. But Ball voiced concern that Vermont Department of Liquor Control Commissioner Mike Hogan had yet to explain the intricacies of the surcharge to local Legions, as the governor had intimated he would at the Legislative Luncheon in Bristol last week.
“I highly urge the Legislature to take a deep, hard look at this situation,” Ball said.
Rep. Dave Sharpe, D-Bristol, said the House Ways and Means Committee has taken testimony on the proposed break-open tickets surcharge. That testimony has not made a good case for the surcharge raising $6 million, but Sharpe did say the break-open ticket industry could use some oversight.
The Ways and Means Committee was initially told that $259 million in break-open tickets are sold in Vermont each year. Most recently, the committee heard that $60 million to $171 million in tickets are being sold in Vermont annually.
“The reason these estimates fluctuate so wildly is that no one really knows, and that’s the problem,” Sharpe said. “It’s unregulated gambling.”
Sharpe said he is confident that nonprofits are acting responsibly in selling and distributing revenue from the tickets. But he said there are other entities that deal in the tickets (such as some bars) that might not be properly accounting for sales.
“We need some regulation with regard to this,” he said. “We need to know how many of these tickets are being sold in our state, who is selling them.”
The state, Sharpe added, does not need to tax the tickets in the manner that the administration is proposing. He said early estimates indicate the state would really reap around $740,000 annually from the surcharge. Sharpe predicted that any tax that is passed on break-open tickets will be small and used exclusively to administer the program.
“I do think the committee feels pretty strongly that we need to actually regulate this,” Sharpe said.

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