Vt. Speaker Vows To Tackle Tax Reform Next Year

05/09/12 5:50PM By Bob Kinzel
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AP/Toby Talbot
Speaker Shap Smith holds a news conference with President Pro Tem John Campbell on Wednesday in Montpelier.

House Speaker Shap Smith told reporters at a Statehouse press conference on Wednesday that he's proud of the accomplishments of the 2012 session. He said the accomplishments included a balanced budget, a decision to renovate the state office complex in Waterbury and a plan to build a new state hospital in Berlin.

But Smith said he was disappointed that lawmakers didn't have a chance to make major reforms in the Vermont tax system. "I think in the world that we live in now and the way that services and goods are delivered, and the mobility of both income and capital, I think we need to really take a closer look at our tax structure," he said.

Several years ago, a Blue Ribbon commission recommended changes to Vermont's income tax structure and it also backed a plan to include many services under the scope of the sales tax. The panel said taking that step would allow the state to lower the sales tax rate.

Smith said he agrees with many of the Commission's recommendations. He said "We have an opportunity to talk about that report and use it as something of a campaign issue and come back with people committed to that in 2013."

During the 2013 session, lawmakers are expected to consider several plans to finance the state's health care system. Smith says this issue is a key part of the overall tax debate. "I actually think it' a perfect opportunity to integrate it with health care financing quite frankly," Smith said. "I think that if there is an attempt at broad health care finance next year, I think that it can be coupled with a broader tax reform."

Senate President John Campbell also wants lawmakers to consider ending the property tax exemption that many non-profit groups now enjoy. "The amount which is staggering that the different groups -- like again the social clubs, fraternities, sororities -- they don't pay any property taxes and if we look at it to see what kind of relief that could give the overall property taxpayer, it's huge,"Campbell said.

Lawmakers did give their approval to a plan to study the impact that taxing so called cloud computing services will have on the state's business community. That report is due in January.

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