State News
April 1, 2015

House passes budget, tax bills

By Elizabeth Hewitt, VTDigger.org

After spending 10 weeks erasing an massive budget deficit, the House gave final approval to two bills that will constitute the backbone of Vermont’s finances in the coming fiscal year.

House lawmakers rejected a flurry of last-minute amendments before passing the FY 2016 state spending package, H.490, on a voice vote Friday evening, March 27.

Earlier, lawmakers sent the budget’s companion tax bill (H.489) to the Senate, which raises $33.2 million through changes in the state income tax code.

Lawmakers convened in January needing to fill a $113 million gap between projected revenue and expected spending. As passed by the House, the general fund budget for FY 2016 totals $1.47 billion, a 4.8 percent increase over this year’s $1.407 billion general fund budget.

Spending cuts
On both sides of the aisle, lawmakers were unhappy to see the elimination of state funding to a low-income home energy assistance program (LIHEAP) in the budget. Paid primarily through support from the federal government, the budget removes $6 million in state money from LIHEAP.

The House did approve an amendment to the bill offered by Rep. Susan Davis, P-West Topsham, to bolster the fund if state revenue improves. Under the amendment, the first $5 million of general fund surplus in the next year will go to LIHEAP.

Rep. Paul Poirier, I-Barre, offered an amendment that would restore $3 million of state funding to LIHEAP. He did not propose a source of funds for his amendment, which would have put the budget out of balance. His amendment failed, 115-24.

Although Vermont is not bound by law to pass a balanced budget, the Legislature has a strong tradition of doing so.

Revenue bill passes
The House revenue bill also survived a series of Republican amendments Friday, passing on a roll call vote, 90-53.

H.489 raises $33.2 million in taxes. Partnered with a fee bill that already passed the House, the legislation provides $35 million in new revenue.

The bill changes two aspects of the state income tax. It caps itemized deductions at 2.5 times the standard deduction, which shakes out to be $15,500 for an individual or $31,000 for a couple filing jointly. It also eliminates deductions for state and local taxes from the previous year.

Several Republicans helped to usher the bill through a preliminary vote Thursday by a narrow margin, after Progressives and liberal Democrats supported an amendment to find an additional $12 million in revenue.

However, House Minority Leader Rep. Don Turner, R-Milton, made it clear that the Republican Party does not support the new revenue.

The House rejected two amendments that would have cut back on the amount of revenue raised.

One amendment, proposed by Rep. Paul Dame, R-Essex Junction, would have exempted anyone who makes less than $60,000 a year from the itemized deduction cap.

Lawmakers also rejected an amendment proposed by Rep. Janssen Willhoit, R-St. Johnsbury, to exempt charitable donations from the itemized deduction cap.

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