by Andrew Stein March 5, 2013 vtdigger.org Vermont lawmakers have tossed a variety of proposals into a ‘ kitchen sink’ draft bill aimed at reducing carbon dioxide emissions and improving energy efficiency.
Rep. Tony Klein. Photo by Roger Crowley
By the end of next week, Rep. Tony Klein, D-East Montpelier, who chairs the House Natural Resources and Energy Committee, said H.216 would be whittled down and voted out of his panel.
Right now, a hefty 55-page spread is on the committee’ s table, including $17 million in appropriations; an order to adopt biomass pellet standards; a study on renewable heating and cooling methods; and a cost-benefit analysis for expanding the state’ s electric vehicle capabilities, among other items.
But there’ s one central ingredient missing from the current draft: A big chunk of revenue.
The original version of the bill, introduced by the committee’ s vice chair Rep. Margaret Cheney, D-Norwich, included a half-percent increase in the gross receipts tax on heating fuel, which funds the state’ s low-income weatherization program. According to a report released by the state-organized Thermal Efficiency Task Force, raising the gross receipts tax rate from 0.5 percent to 1 percent on the retail sale of fossil fuels for heating purposes would generate $15.9 million annually ‘ up from $7.97 million.
However the tax was struck from the latest draft, and the Vermont Fuel Dealers Association welcomed the change.
‘ There is much relief that there will not be an attempt to increase the cost of heating fuel through a tax,’ Matt Cota, director of the association, said on behalf of dozens of fuel dealers.
Klein cautioned that the notion is not entirely off the table, as the committee prepares to consider a wide range of revenue options early next week.
Gov. Peter Shumlin proposed in his budget a tax on so-called ‘ break-open’ tickets to raise $17 million in revenues for thermal efficiency and renewable energy initiatives. But after the Legislature’ s Joint Fiscal Office ran the numbers, its staff estimated that a 10-percent excise tax on the lottery-like games would only generate $6.5 million in new state revenues.
Klein said the tax on break-open tickets would be in play next week. While Klein is not keen on a gross receipts or excise tax on fuel, he said the money needs to come from somewhere, if the state is going to stop pouring dwindling dollars from the Low Income Heating Energy Assistance Program (LIHEAP) into homes that can’ t hold heat.
‘ I know that it’ s going to be very, very difficult to raise the revenue for these programs in the current state that Vermont’ s budget is in, and with all of the valuable programs that are underfunded and vying for the revenues available,’ he said. ‘ I’ m going to fight hard, but I’ m not real optimistic we’ ll be successful.’
The one revenue measure currently in the bill that the fuel dealers association supports is the removal of a gross receipts tax exemption for fuel dealers that sell less than $10,000 worth of heating fuels. According to state figures, the number of dealers, who apply for that exemption totals close to 70.
While the source of the proposed $17 million is up in the air, the draft bill mirrors Gov. Peter Shumlin’ s budget proposal for how to spend it, calling for allocating $6 million to thermal efficiency initiatives, $6 million to shore up Vermont’ s Low Income Heating Assistance Program and $5 million for the state’ s Clean Energy Development Fund.
The $6 million in proposed annual thermal efficiency funding doesn’ t keep pace with the roughly $267 million paid out over seven years that the Thermal Efficiency Task Force recommended. That is the amount the task force said the state should spend from 2014 to 2020, if it is to meet a statutory goal set five years ago. That Vermont statute, enacted in 2008, set a bar of ‘ substantially’ improving the energy efficiency of 80,000 homes ‘ or one quarter of all the Vermont homes ‘ by 2020.
Staunch advocates of the task force’ s recommendations say the investment would more than pay off.
Ben Walsh is an energy advocate for the Vermont Public Interest Research Group and a member of the task force. He pointed to the environmental and economic benefits of launching the program as recommended by the task force, which found that every $1 of public investment in such programs would create more than $5 in benefits.
‘ We feel like this bill would be a good step in the right direction, but not nearly enough,’ he said. ‘ We’ d still be leaving hundreds of millions of dollars in savings on the table and millions of tons of CO2 going into the atmosphere. The bill does a lot of good things, but it isn’ t nearly what we need to see as a state.’
The vice chair of the committee, Cheney, said that the $17 million figure is still in flux. But if she has anything to say about it, the state would allocate more to thermal efficiency and renewable energy projects.
‘ That amount does not reflect what the programs actually need,’ she said.
DRAFT BILL H 216