Vermont Legislature passes budget adjustments

The Vermont Legislature returned to work Wednesday before finally adjourning the special session by passing a number of changes notably identified by Governor Douglas as problematic. While not addressing the governor’s concerns over total spending and tax levels, the Legislature did agree to others, in particular with the impending deficit in the Unemployment Insurance Trust Fund and the timing of when the increase in the Capital Gains tax would begin. While these concessions did not prevent the governor from vetoing the state budget, they could have helped the Democratic leadership muster enough votes to override the veto Tuesday.
The state budget companion bill (H 442) included:
1. Postpone Capital Gains change to July 1, 2009The effective date of the capital gains changes were changed from January 1, 2009 to July 1, 2009. This change will be accounted for with a partial income tax rate reduction in 2009 and a full rate reduction in January 2010.
2. Allowing Farmers/Timber sales to retain the current 40% exclusion for Capital Gains. Individuals over 70 will also retain the current 40% exclusion for one year. (An amendment was attempted to change this to 65 years of age, but was defeated.)
3. Provide Research and Development tax credits as of FY 2011. 4. Address the UI fund shortfall by increasing employer contributions to fund UI by raising the taxable wage base from $8,000 - $10,000 in 2010; freezing benefits by maintaining the maximum weekly benefit at $425 (this amount was scheduled to increase to an estimated $438 as of July 1st); and creating a 12 person study committee of legislators to review underlying issues such as those employers who carry negative balances.
5. Provide the Vermont Telecommunications Board with $400,000.
6. Minor changes in the state employee retirement incentive as well as changes in employee position language to address constitutionality concerns to limit the Legislature’s review of position reductions.
7. Vermont will have two sales tax holidays, one on August 22 and one on March 6, 2010.
8. The Next Generation Fund will receive $1.5 million more to be split among the Vermont State Colleges, the University of Vermont and Vermont Student Assistance Corporation for scholarships. This money is coming from estate tax revenues, which would have gone to the Higher Education Trust Fund.
9. Clean Energy Development FundThe clean energy development fund is expected to receive over $30 million of ARRA funds in the coming months. To prepare for these funds the governance structure of the fund has been changed. The Investment Committee will become a permanent board and will be given the authority to hire and supervise the fund manager. The fund manager will be housed in the Department of Public Service for administrative purposes.
Legislators also passed a technical correction bill, S.1. This bill amends the Economic Development bill (H.313) to eliminate redundant and unclear language as well as provides clarifications to the budget, health care reform and tax bills.
In other news under the golden dome, Senator Susan Bartlett, D-Lamoille County and long time chair of the Senate Appropriations Committee, announced she would be running for Governor. She joins Senator Doug Racine, Secretary of State Deb Markowitz and Senator Peter Shumlin as officials who have expressed either an intent or interest in seeking the state’s highest office
Source: Lake Champlain Regional Chamber of Commerce