Inside the tax bill

The House’s version of the miscellaneous tax bill – up for a final vote later today – has seen some significant revisions recently. And while the $24 million in new revenues it contains have stolen the spotlight, other interesting provisions have been either added to or scrapped from the legislation.

Lawmakers appeared poised yesterday to reward the fiscal restraint of the 17 supervisory unions who met their Challenges for Change spending targets. The provision would have reduced by one penny the statewide property-tax rates for residents in 61 towns that approved 2-percent decreases in local school spending in March.

The token of gratitude, as some lawmakers called it, generated cheers from the representatives of benefiting municipalities. But the provision would have cost the education fund about $1 million in foregone revenue, and other legislators soon chimed in with concerns.

Some towns, opponents of the rate reduction said, achieved the spending cuts at their local elementary schools. But because the supervisory unions of which they are a part failed to meet the goal overall, they would unfairly be denied the tax relief.

The House Committee on Ways and Means took note, and offered an amendment to yank from the bill a provision it had approved in a committee vote just three days prior.

“This action remains the only incentive that would have recognized our school district for meeting the Legislature’s voluntary request for meeting Challenges for Change goal,” House Minority Leader Don Turner said.

The bill also sets in statute the statewide property tax rate, which will see the first increase since the passage of Act 68 in 2003. Last year’s rate of 86 cents per $100 of assessed property value will rise to 87 cents this year.

Absent from the tax bill is a major overhaul in the state’s income-tax code. The ways and means committee had, until last week, planned to institute a provision that would have lowered income-tax rates by about a third by broadening the base of income on which those rates apply.

The shift from “taxable income” to “adjusted gross income,” proponents said, would eliminate a menu of deductions – like home mortgage loans, charitable contributions and interest payments on school loans – and increase the tax base from $10 billion to $15 billion overnight. The proposal also condensed five income brackets into three.

Vermont is one of only nine states that bases income-tax rates on taxable income. Though the proposal would raise the same amount of revenue, Democratic lawmakers said it would make the state’s income-tax rates more competitive with neighboring states. Vermont has a top rate of about 9 percent. Massachusetts’ is 5 percent.

Committee members though pulled the provision from the bill. The proposal could still make it to the floor this year in a piece of standalone legislation. Lawmakers say they need to work out kinks in the new code before moving ahead.

House Speaker Shap Smith and Ways-and-Means Chairwoman Janet Ancel have suggested the tax-code overhaul bill, if it materializes, could be used as a vehicle for a proposed surcharge on the incomes of the wealthy.

The surcharge, sought by Progressives and some Democrats in a floor amendment Tuesday, failed to win support. Smith though said he might reconsider his opposition if the federal government approves a budget that results in additional cuts to Vermont programs.

Self-employed Vermonters will see some relief in the tax bill. Currently they’re unable to deduct health-insurance costs from their income-tax forms. Lawmakers say it creates an unfair disadvantage, since the health benefits of employed residents are decoupled from their taxable income.

The measure is expected to cost the state about $700,000 in foregone revenue in fiscal year 2013.

Wood-products manufacturers will see a two-year extension of a tax credit, a move expected to save that industry about $400,000 in tax liabilities in fiscal year 2013.

The tax bill would repeal a provision in the tax code that reduces property-transfer tax rates on land that is part of the Current Use program. The change would generate $170,000 next year, which would be allocated to the tax department to digitize land records.

The bill also spares some organizations from a law that imposed sales taxes on admission tickets sold by nonprofits. The new threshold is designed to insulate smaller organizations from the tax and would cost the state about $75,000 in foregone revenue next year.

Japanese students visit Statehouse

A group of students from Tottori Prefecture, Japan visited the Statehouse Wednesday. The students were a part of an exchange group called Green Across the Pacific, which partners students from Japan and China with Vermont high school students to learn about global environmental issues.

The students from Tottori arrived in Burlington on March 19^th, about a week after an earthquake and tsunami devastated Japan. Tottori is located on the western region of Honshu, the main island of Japan and approximately 380 miles from Fukushima, where the Fukushima Daiichi nuclear power plant was crippled after the earthquake caused problems with cooling systems in the reactors.

While the students are visiting Vermont they will learn about natural history, environmental initiatives and conservation from professors and representatives from the Agency of Natural Resources. The students will also work on projects relating to environmental issues of their choice, some of these projects relating to alternative fuel.

The students from Vermont and Tottori came to the Statehouse to learn about the impact that politics have on environmental policy in Vermont.

The students from Vermont had planned to visit Japan in April, but according to the founder of the program, Peter Lynch, said that the trip will unlikely happen because of travel restrictions for student groups traveling to Japan.

Shumlin backs Volz for Public Service Board

Gov. Peter Shumlin on Tuesday said he wants Jim Volz, the chairman of the Public Service Board, to be reappointed to his post.

Volz has been chairman since 2005 of the Public Service Board, which regulates the state's electric, gas and telecommunications companies.

Shumlin praised Volz as the right man for a job that will deal with major issues in the coming years, including the potential closure of the Vermont Yankee nuclear plant and the expansion of internet and cell phone service throughout the state.

“What I know is he is extremely competent, fair, he listens, he knows the issues… better than almost anyone, and he cares deeply about Vermont,” said Shumlin. “So I don’t think I can do any better than that.”

The Judicial Nominating Board, which includes lawmakers and gubernatorial appointees, is required to solicit and screen applications for the Public Service Board position, and the governor then appoints a chair from the list of candidates. Shumlin asked the board to begin that process. 

Volz was thankful for the chance to keep his job, which pays $122,800 annually.

“I’d like to thank the governor for his faith in me and for giving me the opportunity and honor to serve the people of the state of Vermont for the next 6 years,” Volz said.

 

 

And off we go

House Speaker Shap Smith banged the opening gavel on Tuesday’s floor session with a plea for “patience.” Legislators this week will debate the tax bill (today), health-care reform legislation (Wednesday) and budget (Thursday) before sending the bills off to the Senate.

Things will no doubt get contentious.

“Patience is a virtue, a virtue that will most likely be tested this week,” Smith said. “We are a big family, and big families often have squabbles, so we’ll get to test that this week also.”

Smith though tried to bring some perspective.

“We are lucky to have each other and we are lucky to represent the state of Vermont and I hope that we can keep in our hearts and minds a certain level of peace and patience.”

 

Vermont GOP gets new Executive Director

Pat McDonald, recently elected the chair of the Vermont Republican Party, has named Tayt R. Brooks the executive director.

From the press release:

 

"I'm excited to have Tayt join our team," said McDonald.  "His experience in working with people around the state and in working with members of the General Assembly makes Tayt a good fit to advance my plan to grow our party."

 

Brooks joins the Vermont Republican Party after serving as Vermont Commissioner of Economic, Housing and Community Development in the Douglas Administration.

 

He served as Executive Director for the Vermont Republican Party during the summer and fall of 2008. Prior to that, he spent five years as the Government Affairs Director for the Home Builders' & Remodelers' Association of Northern Vermont and has over four years of experience sourcing candidates as a personnel recruiter. Brooks also served as a selectman for the Town of St. Albans.

 

Brooks, 36, was born and raised in St. Albans and after graduating from Bellows Free Academy in 1993, he enrolled at St. Lawrence University in Canton, NY, where he earned a B.A. in history with a Canadian studies minor.

Health care bill debate goes late; Buy local contracting rules;

The fate of H.202 in committee was fairly certain last night; the committee was set to reconvene at 10 p.m. to hash out final details before voting it through. We'll have an update on that status this morning. Details as of 9 p.m. last night are in Pete's story here.

Health care workers came to the capitol Wednesday to testify against another health-care related issue: the provider tax.

More than 250 doctors, nurses and volunteers visited Montpelier on Wednesday to tell legislators why they think a proposed tax increase on health care providers is a bad idea.
Among them was Kristin Baker, who takes pride that the emergency department at Fletcher Allen Health Care, where she is nurse manager, is the only one in the state to offer specialized emergency-room care. But she told lawmakers that some of those services would be eliminated if Gov. Peter Shumlin’s proposed tax increase on hospitals goes into effect....

And while we're on taxes:

Tax the rich, spread the pain

House lawmakers on Thursday sought to rally support around a new tax proposal that could raise as much as $50 million in revenue next year by tapping the incomes of middle- and upper-class Vermonters.  At an informal meeting shortly after noon, about two dozen legislators listened to a presentation by the main architects of the plan. Rep. Johanna Leddy Donovan, a Burlington Democrat, said the Legislature cannot abide the $44 million in human-services cuts proposed by Gov. Peter Shumlin....

And Thatcher Moats writes about a new kind of buy local:

Anthony Pollina is proposing favoritism for Vermonters where state contracts are concerned.

On the campaign trail last fall, candidates of every political stripe said creating jobs to help Vermonters rebound from the Great Recession was a top priority. Sen. Anthony Pollina, a Washington County Democrat, believes a bill he has introduced this year is an opportunity for lawmakers to follow through on those promises.  Pollina is the lead sponsor of a “hire local, buy local” bill that would require state government to hire Vermont workers and buy local food as it spends taxpayer money.

Veterans added to income tax check offs

The Vermont Veterans’ Fund has been added as a “check off” on this year’s state income tax returns.

Vermonters will now have the option to make donations to the Vermont Veterans’ Fund as well as the Non-game Wildlife Fund Contribution and the Children’s Trust Fund Contribution on the IN-111 income tax returns, said Gov. Peter Shumlin.

The Office of Veterans Affairs received calls from Vermonters who were unsure how to make donations to local charities that benefit veterans, according to Veteran Services director, Clayton Clark.

“We frequently receive calls from people who want to make donations to help veterans and want their donation used locally by trusted organizations,” said Clark.

The Veterans’ Fund, created in 2010,  will be used by a committee that is yet to be formed who will distribute grants to local organizations that provide support and services to veterans and their families starting this fall.

Donations to the Veterans’ Fund can also be made directly through the Office of Veterans Affairs.

-Jenna Pizzi

Legislators honor fallen marine

Legislators gathered along State Street in Montpelier and on the steps of the Statehouse Thursday to honor the memory of a Marine from Danville who was killed in Afghanistan.

The remains of Cpl. Ian Muller, who was killed Friday in Afghanistan, were returned to his Vermont family Thursday morning and transported from the Burlington International Airport to Saint Johnsbury. The public was invited to line the route to honor the 22-year-old.

The House recessed in order to honor Muller as the motorcade passed outside.

“It is a heartfelt response from all legislators to be gathered out here today,” said Rep. John Moran, a Wardsboro Democrat.

As the motorcade approached, the crowd quieted and all other traffic was stopped as the hearse, escorted by seven state police cars, passed in front of the capital building.  Many legislators put their hands over their hearts and an American flag was held up.

“Service members do not ask much from us and this is us being able to show them the respect that they deserve,” said Rep. Peter Fagan, a Rutland Republican.

A wake will be held on Friday and a funeral will be held Saturday, both in Saint Johnsbury.

Vermont newspapers and New York Times online subscriptions

Since we went live with a paid news model in October of last year, our headlines have dropped off the Googles and the Yahoos of the world. We heard then and since that this was a major mistake, and certainly for a daily newspaper with a great deal invested in the print world while creating a new one online, this is a venture into the unknown.

One reason we did this is to keep our future in our own hands. As we saw recently, when Google makes a tweak to its search algorithm, business models are turned upside down. We never really completely relied on Google or Yahoo for our online business model, but now we don't at all. We create our own community - which is what small, locally owned businesses do, and we're slower than average to adopt new technology, which is a strategy employed by a lot of Vermont newspapers.  

I wrote about this for the Champlain Business Journal earlier this year - many Vermont weeklies and at least three dailies besides us either have a paywall up or post only limited content online. That includes the Valley News, the Caledonian Record, the St. Albans Messenger, the Addison Independent, the Barton Chronicle and the Herald of Randolph. This isn't because they are backwards or resistant to change, it's because locally-owned newspapers have an eye on the long term, and long term means having a solid business model. For some papers, like Seven Days, that means free in print and free online. But newspapers in Vermont are still in a start-up phase for their online business models; most of them have a hybrid - some free, some paid content.

Those business models are built around providing quality, local content, and around making connections between disparate parts of our cities and towns - creating a community.

We also have heard in response to our paywall the call for allowing free linking, more free content, and the ability to connect via social media, and we are close to adapting our web sites to meet that demand, because a paid online model is about quality journalism, but newspapers are also about creating that community.

Meanwhile, the New York Times has announced a new online pay model, and will be requiring subscriptions for those visiting their web site more than 20 times a month, or for use of their mobile and tablet apps.

-Rob Mitchell

Vermont mental health services get competitive; MDs on the march

From the Vermont Press Bureau (paywall stories):

Health care providers rally to oppose "provider tax" in Shumlin budget

More than 250 doctors, nurses and volunteers visited Montpelier on Wednesday to tell legislators why they think a proposed tax increase on health care providers is a bad idea.

Among them was Kristin Baker, who takes pride that the emergency department at Fletcher Allen Health Care, where she is nurse manager, is the only one in the state to offer specialized emergency-room care. But she told lawmakers that some of those services would be eliminated if Gov. Peter Shumlin’s proposed tax increase on hospitals goes into effect.

Racine proposes free-market competition approach for mental health agencies

Already targeted by Gov. Peter Shumlin for an $11 million spending cut, Vermont’s mental health agencies are now fighting an administration proposal that seeks to open up the mental-health care system to free-market competition.