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Governor, Legislature disagree on tax breaks for economic stimulus package

Tuesday April 29, 2008
John Dillon

Montpelier, VT

(Host) Democrats in the Legislature are eager to finish their work and adjourn by this weekend.

Governor Jim Douglas is determined to win passage of a package that will stimulate the state's economy.

He says with a little more effort, lawmakers can come up with a plan that he and they can support.

VPR's John Dillon has more.

(Dillon) It was just over a week ago that the governor unveiled an economic stimulus plan to help lift the state out of a recession.

After a week of review, a special committee voted to support most of that plan. But the committee left out some tax breaks that Douglas says are key. Democrats say the administration hasn't shown how it would make up for state revenues that would be lost under the Douglas plan.

And besides, Senate President Peter Shumlin says, there's only so much Vermont can do on its own.

(Shumlin) ``I think that Vermonters fully understand that this great state of Vermont, and this little capital of Montpelier, does not have the power to control oil that's selling at $120 a barrel that's providing tremendous pain, economic pain.''

(Dillon) The legislative committee and the governor agreed on a number of proposals. One idea came first from lawmakers. It's a plan to increase state bonding for transportation projects by $10 million.

But lawmakers did not endorse Governor Douglas's idea for a sales tax holiday for a weekend in July. They say they're open to the idea, but want to know how the administration will make up for the lost tax revenue.

The Democratic proposal contains a range of low interest loans to businesses. But the committee did not go along with a plan to grant tax credits to manufacturers in areas of high unemployment, such as Orleans County.

House Speaker Gaye Symington said the Legislature needs more detail.

(Symington) ``We're not saying yes or no, we just need more information and assurance that we have an opportunity to evaluate the effectiveness of that kind of tax credit since we've been moving away from that kind of credit over time.''

(Dillon) Douglas was critical of the legislature's decision not to include his tax ideas.

(Douglas) ``Well, Democrats are good at coming up with excuses for not doing things. We need to move this package forward. We need to make sure the economy gets the jump start it needs.''

(Dillon) Democrats tried to score political points of their own. They argued that much of the work of the Legislature over the past two years has been aimed at improving the economy, and helping Vermonters save money.

They displayed a list that included legislation passed earlier this year, including a bill that would help people make their homes more energy efficient.

Burlington Democrat Mark Larson chaired the special committee that worked on the stimulus package.

(Larson) ``We understand that Vermonters are facing increasing costs and stagnant wages for a while. We understood that, and we've been working hard on those issues. I think we also are trying to make a credible effort at seeing could we do anything different given that the situation has become worse in the last few months.''

(Dillon) But Douglas said the legislature still has time to do more, and he urged them to include the sales tax holiday and tax credit ideas.

For VPR News, I'm John Dillon in Montpelier.

© Copyright 2008, VPR

This is the online edition of VPR News. Text versions of VPR news stories may be updated and they may vary slightly from the broadcast version.

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