Death meets taxes
Amazingly, the losers don't like to lose, he added. That makes developing tax policy a little tricky.
Taxes were the topic of the hour on Monday night at the forum hosted by the Bennington County Democratic Committee on taxes and health care. Representative Cynthia Browning (D-Manchester, Arlington), Senator Bob Hartwell (D-Benning ton County), along with Wilson spoke. Originally, Senator Peter Galbraith, (D-Windham County) and Michael Costa, Deputy Director of Health Care were expected to attend, but Galbraith was unexpectedly called to Washington D.C. to work on Syrian issues and Costa was under deadline in Montpelier, said Michael Keane, the moderator and co-chairman of the Bennington County Democrats.
Hartwell said the issue Vermont is facing is health care and property taxes ballooning at the same time.
"Property taxes this year are up about 60 million dollars statewide and at the rate things are going they'll go up another 50 or 60 [million dollars] next year," Hartwell said. "And by the time Green Mountain Care comes about if it ever does there will be another $100 million dollars."
The rising cost of power, along with the stresses on the education fund are other problems Vermont will have to deal with. However, the good news, Hartwell said, is that many reports state this will be the best year for the United States' economy since 2005. He said he hopes that this is also the case for Vermont, instead of separating ourselves from the rest of the country.
"This is a big challenge, I have ideas for what to do with it, we're going to have to coalesce in a really non-partisan way," he said.
Browning spoke next and said that a recent blue ribbon commission on taxes had made a series of recommendations to help improve the Vermont tax code. None of these recommendations have been imple mented. In her opinion, Browning said she would like to see exemptions and deductions eliminated from the tax rate and instead see lower rates for all Vermonters. Another stress on property taxes are programs in the education fund that are not, strictly speaking, educational.
"[There are] programs financed in the education fund that are not educational, which would be current use, which supports agriculture and forestry and the income sensitivity program, which helps most Vermonters pay their property taxes based on their income, not their property value," Browning said. "[If the programs were taken out of the education fund] If you did that, the property tax rate would come down by 20 cents."
The financing of Green Mountain Care is not supported by Browning and she has filed a public records request to find more information about the way the program will be funded. Under Act 48, the Shumlin administration had to present a financing plan to the House and Senate by January 2013 and has of yet failed to do so, she said. Her request was denied and if her appeal of the request is once again denied, Browning plans on taking the matter to court.
"This administration has had three years to come up with this plan," she said. "It's very clear how you would raise this much money, the problem for them is the politics and that is just no excuse."
Wilson spoke last and said that as a member of the House Ways and Means committee, he spends most of his days dealing with tax issues. Property taxes raise about $1.5 billion in Vermont, he said, with 74 percent of that going to schools and the other 26 percent covering municipal services. There have been some changes with education spending this year - like phasing out small school grants and changes to income sensitivity - but there is still work to be done. Wilson said there are winners and losers in any tax reform, which is why it makes it so difficult to change. However, he said property taxes may not be the biggest issue.
"From my perspective, the biggest problem we have is education spending. We spend essentially more than any other state in the nation per $1,000 of income," he said. "We have a lot of small schools, a lot of small classrooms, we just don't have the efficiencies built into the system."
On the issue of health care, Wilson said there are many moving parts to put together, not just the finances, but also what benefits would be offered.
"I think the Governor's reluctance to do anything at this stage ... may be an indication that this is incredibly difficult to put all these things together, and I think that even though 2017 has been the target date, I can't imagine that we'd be able to roll anything out at this stage by 2017," he said.
After the introductions, Michael Keane and Chuck Sweetman, co-chairs of the committee, opened up the floor for discussion and questions from the audience.
Ashley Illinski, an x-ray technician from Arlington, shared her experience with the Affordable Care Act and her fear for what could come out of Green Mountain Care. Illinski, who is pregnant, said she was introduced to a $12,500 out of pocket maximum and after insurance, she will pay a minimum of $7,500 or up to $10,000 when she has her baby.
"If single payer is going forward, I need to know I'm not going to get stuck in an even worse situation than I am already in," she said. "I work full time, my husband works full time. There's not a lot of incentive for a young person like me to be in Vermont as it is, there aren't a lot of food jobs, there aren't a lot of opportunities. Don't stick me with a health insurance plan that won't do me any good."
Hartwell said the risk of Green Mountain Care is that Vermont will spend a lot of money making sure that individuals on the lower end of the pay scale are taken care of or those that are well enough off will be able to escape it. The problem with this program, Hartwell said, is people in the middle will be stuck paying more under the system.
The lure of other states, for example the tax breaks in New York and other incentives to move to other parts of the Northeast, was brought up at multiple times in the meeting. Hartwell said it would be really tough to compete head to head with some of the programs, like New York's Enterprise Zone. However, he said Vermont could implement programs like property tax freezes.
Vermont's two-year term for governor was also brought up. Wilson said a four-year term could give the office more time to work on policy, instead of worrying so soon about re-election. Browning did not agree. She said that any governor should instead stand up for what they believe and create change and not be so concerned about politics.
Keane asked if Vermont had the critical mass of people and resources to attract businesses in the way other states can and what it would take to get Vermont to the point where it will become attractive. Browning said instead of trying to attract outside businesses, the state should focus on building the economy that is already present in the state, like artisanal cheese. Bribing people to come to the state, or to keep them from leaving, is not a good policy, Hartwell added.
"We have to have the kind of environment here that keeps people here and attracts people," he said. "And that's going to mean - and it's not going to be easy - dealing with the high cost of power, dealing with corporate taxes, dealing with real estate taxes that are too high ... this is not a very good state of affairs for convincing people to hang around."
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