Legislature Make Changes To Income Sensitivity Program

05/13/10 7:04AM By Bob Kinzel

(Host) Before adjourning late last night, the Senate engaged in an active debate over legislation that makes changes to a program that allows a majority of Vermonters to pay their education taxes based on their income and not the value of their property. 

It's a provision known as income sensitivity and Vermonters with household incomes under $90,000 are eligible for the program.

The legislation makes two changes to the program.  It caps the value of homes of eligible participants at $500,000 and it makes it harder to qualify for the program if the homeowner has more than $10,000 in dividend and interest income.

The changes are expected to save roughly $13 million a year.  Windsor Senator John Campbell defended the proposal:

(Campbell) "Because I don't want to hurt low income people I don't want to hurt middle income people I don't want to raise their taxes I don't anyone else in this room does and I just want to see are we talking about those people who we were really trying to find those are the people who have these very wealthy homes and they have trust funds and they have IRAs and they have all sort of other unearned income."

(Host) Orange senator Mark MacDonald opposed the bill because he said the savings would be used to lower the statewide property tax rate for wealthy homeowners:

(MacDonald) "We're giving them property tax stuff with this bill with the money we collected form the working folks in the bottom 80 percent we're collecting the money from them and we're giving it to the top 10% to lower their taxes."

(Host) By a vote of 22 to 9, the full Senate supported the changes and the bill was later approved in the House.

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