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Lawmakers propose budget changesBY LOUIS PORTER VERMONT PRESS BUREAU | May 29,2009
MONTPELIER — Working to gather votes to override a promised budget veto by Gov. James Douglas, legislative leaders are proposing a half-dozen changes in that $4.5 billion spending plan.
Those changes, made to a state budget lawmakers just recently approved, are not designed to woo members of the House to join in overriding the veto, House Speaker Shap Smith said.
"This isn't about shoring up votes or anything like that," Smith said. Instead, the proposed changes "reflect our willingness to listen to some of the concerns that have been raised."
Smith and Senate President Pro Tem Peter Shumlin also said the changes do not mean the budget that passed the Legislature early in the month was not a good one.
"We are not saying the bill we passed should not have gone into law," Shumlin said.
Two-thirds of those present in the 150-member house will have to vote to override the governor's veto and thereby pass the budget into law without the governor's agreement.
But Rep. Patti Komline, R-Dorset, said the latest budget changes are obviously a way of gaining votes.
"As of today, they don't have the votes," said Komline, whose caucus voted unanimously against the legislative budget passed by the Democratic House and Senate. "This is an attempt to peel off votes, to buy votes."
Several of the changes would alter or remove provisions that Douglas objected to in the legislative budget. For instance, the new bill, if approved next week when legislators return to Montpelier for a special session, would exempt farmers and timber land owners from capital gains tax changes. It would also implement changes to the ailing unemployment insurance fund. Douglas has hammered lawmakers on both of those aspects of the legislative budget.
On Thursday, the governor had little good to say about the changes, although he has not reviewed the proposed budget amendments completely.
"This budget is not in the public interest. It has too many deficiencies," he said. The proposal to amend the budget shows that the legislative spending proposal is flawed, the governor said.
"It is an acknowledgement the budget they passed … does not serve the needs of the people of the state."
The proposed changes to the budget offered by Shumlin and Smith would:
Postpone an increase in capital gains taxes that would result in investment income being taxed at roughly the same rate as wages until July. Douglas has said that piece of the budget — capital gains earned since the start of the year would have been taxed at the higher rate — would amount to an unfair retroactive tax increase.
Exempt farmers and timberland owners from the higher capital gains rate. That would mean, as under Douglas' alternative budget, that those groups would still be taxed at 40 percent of the rate earned income is taxed at.
Provide research and development tax breaks for businesses starting in fiscal year 2011 (which starts in July of 2010).
Take some steps to address a shortfall in the unemployment insurance fund, expected to grow to $160 million by the end of calendar year 2010. The proposal would hit both workers and employers. Employers would pay more; the taxable wage base would increase from $8,000 to $10,000. Meanwhile, workers' benefits would be frozen at current levels, delaying an expected increase. Employees would have to work a minimum of four weeks to collect benefits, and could be disqualified for gross misconduct.
Provide additional money for the Vermont Telecommunications Authority.
Make some changes to an incentive program to encourage qualified state employees to retire, as recommended by State Treasurer Jeb Spaulding.
And change a provision putting restrictions on the administration's ability to lay off state workers, to avoid potentially violating the Vermont constitution.
Some of the governor's objections to the lawmakers' budget are not addressed in the proposed changes. Those include:
The budget, even if amended, would not move the obligation to pay for teachers' retirement to the Education Fund. That is needed in order to give voters an indication of the true cost of education in Vermont, according to Douglas. Lawmakers say the move could raise property taxes and is too drastic a change The proposed amendments would not go toward closing a large gap in the following year's budget. Douglas says that sets up an even larger problem in fiscal year 2011. Lawmakers say the budget gaps caused by dramatic declines in state revenue are best addressed incrementally over several years.2 CommentsMORE IN World / NationalThe bodies of four people missing after a boat crash on the Mississippi River in Iowa were found... Full StorySANAA, Yemen — Fresh clashes between al-Qaida fighters and government forces in Yemen left 17... Full StoryVIENNA — The head of the U.N. Full Story -
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