Legislative Review: Lake, budget among top issues

Entering the Town Meeting break there are three topics that have percolated to the top of legislators’ lunch break discussions. Those subjects are solving the state revenue projected shortfall, changes in public education, and water quality issues, especially surrounding Lake Champlain. What are my thoughts on these issues?
Right now we are facing a revenue shortfall (General Fund expenses versus anticipated revenue) of approximately $118 million. That’s about 8 percent of the General Fund budget. This is not an easy fix. What’s happened? The main culprit has been lower than expected personal income tax receipts. Our economists, whose forecasts have been off the mark, don’t have solid reasons for these disappointing income revenues.
The aging population of our state means more people in retirement thus less earned income. Unemployed people have left the work force, discouraged with job opportunities. We’ve lost higher paying manufacturing jobs in recent years and many workers have moved into service related employment, which generally doesn’t pay as well. With less earned income reported, there is less income tax paid.
The Legislature has three options to address the revenue shortfall — reduce spending, raise taxes, or a combination of both. The governor has chosen the third option with over $40 million in cuts and over $50 million in tax increases. We still have to find $18 million that, in February, economists suggested we would not realize. What the assembly will do is unclear at this point. I, for one, don’t favor raising taxes. I believe we can find savings in our existing budget without sacrificing service to Vermonters.
As of this writing, the Education Committee seems poised to introduce a bill that will move us toward larger school districts hoping that consolidation will lead to greater efficiencies, thus less cost. Qualifying for small school grants is also likely to change. There has been much discussion around ways to reduce property taxes, which is a priority from my point of view. It’s uncertain at this time if we’ll see something on this front prior to adjournment.
There is strong sentiment in Montpelier that we need to act on measures that we know will make progress towards cleaning our waterways. There are several bills outlining strategies, which will involve agriculture, town road management, storm water management, and municipal sewer systems. Enforcement of existing rules is part of the story. Capital will be needed to fund other aspects of the effort. For example, town road drainage systems will need to be brought up to certain standards to minimize runoff into brooks and streams. Should the cost of this fall on our property taxes? Should the state raise the money and offer subsides to towns? Do we expect compliance in three years, five, 10 or 15 years? The devil is in the details, but I believe you can expect a comprehensive bill on lake cleanup this session. I believe this is important and I will make an effort to have a good bill that Vermonters can support.
The first money bill we voted on this year was the Fee Bill. The bill raised fees in almost all categories, in some instances by 70 percent and 80 percent. The total increase in fees was $2.7 million. Who pays these fees? It impacts restaurants, caterers, medical practitioners, hunters, fisherman, convenience stores, trash haulers, and more. Consumers end up paying these fee increases. I voted no on this bill.
My committee, Commerce and Economic Development, has several positive bills in the pipeline. One creates a sales tax holiday, which has proven to stimulate sales in our retail sector and business profitability. We are also recommending initiating a marketing campaign designed to promote working and living in Vermont. We know our state is beautiful. It can be an excellent place to start and grow a business. We want to reach out to entrepreneurs and have them make Vermont their home. There is an Angel Investor tax credit program on the table, which is designed to provide money to startups and growing businesses when conventional means are not available.
Reading between the lines you can see money is always the main topic of conversation. We need to be good stewards of your tax dollars and at the same time grow our economy so we have additional dollars to support the programs that make our state great.

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