MONTPELIER, Vt. (WCAX) – The Vermont House is expected to vote on an $8 billion state spending plan this week. It comes as lawmakers consider millions in new investments and millions in new taxes to fund them.
A key House panel advanced a plan to fund critical priorities in the budget, floated by about $125 million in new taxes.
The House Appropriations Committee is considering a state spending plan, including a big expansion of Medicaid, an expansion of the judiciary and more supports for affordable housing. And those ideas are all funded by new taxes– increases in the corporate income tax, the foreign income tax and the property transfer tax, and a new tax bracket for Vermonters who make more than $500,000 annually.
A proposal to tax unrealized gains like stocks did not advance.
Others, like a potential tax on candy, soda, streaming services and an expansion of the sales tax are still up for debate.
But the Vermont Chamber of Commerce is urging state lawmakers to slow down. They point to headwinds facing the business community, like ongoing labor shortages, health care costs, inflation and high interest rates, and a new child care payroll tax.
They say businesses need time to digest it all and see how it will affect their bottom line.
“I think we need a holistic look at what’s going on in our economy– what are the cost pressures people are dealing with– to understand what is the taxing capacity we have right now,” said Megan Sullivan of the Vermont Chamber of Commerce.
The House could vote as soon as this week. Then the state Senate would begin drafting its own spending and revenue plans.
It’s worth noting that none of these proposals so far are going to help buy down the looming 20% property tax hike.
As for what’s being done about the education fund problem, state lawmakers are advancing bills setting up a state fund for school construction and another to invest in community schools. But a revenue option to buy down the property tax hike is not yet on the table, though Vt. House Speaker Jill Krowinski said last week they will work on ways to lower the property tax burden.
Gov. Phil Scott said last week he would consider raising taxes to buy down the $240 million ed fund increase, but he said he would only support that if lawmakers pass widespread systemic reform, which is something that would likely take multiple studies and legislative sessions.
