October 15, 2011, Times Argus, Thatcher Moats
MONTPELIER — When it comes time to raise money to help pay for Tropical Storm Irene damage, the Legislature and the Shumlin administration should begin by taxing the rich more, the Vermont Progressive Party said in a statement issued this week.
“We should start by asking the wealthiest Vermonters, who are benefiting from the extension of the so-called Bush cuts, to pay more,” the party said.
The Progressive Party, which has five lawmakers in the House and two in the Senate, weighed in this week in the aftermath of historic flooding that devastated Vermont in August. It outlined a vision for recovery different from the Vermont Republicans and from Gov. Peter Shumlin, a Democrat.
The Progressives were to the left of Shumlin during the last session on fiscal issues and unsuccessfully pressed the administration and other lawmakers to raise income taxes to help fill a $176 million budget gap.
Their goal was to avoid budget cuts that the party argued landed hardest on elderly and low-income Vermonters, who rely on the state Agency of Human Services.
The party’s message largely remains the same when it comes to paying for Irene recovery.
“We must protect support services for people who need them,” the party wrote. “It makes no sense to cut human services when the need for them is likely to increase as a result of the disaster and the on-going economic downturn.”
Rep. Chris Pearson, a Progressive from Burlington, said the starkest contrast between how the Progressives and the Shumlin administration want to approach Irene recovery is illustrated in a budget memo that the administration issued last month. At that time, a top administration official instructed agency heads to reduce next year’s spending by 4 percent.
Shumlin is shooting for a zero-growth budget, and officials in his administration said this might require cuts in some areas to make up for increases in others that may result from Irene-related repairs.
Administration officials said human services cuts will be considered in the budget plan Shumlin will present to the Legislature in January.
Pearson said those kinds of cuts should be off the table.“Taking away services those families depend on seems very short sighted,” Pearson said.
One Democratic lawmaker plans to introduce a bill next year that would raise the gasoline tax to help pay for road repairs in Vermont.
But Pearson said the gas tax is regressive — one reason why taxing wealthy Vermonters at a higher rate should be one of the first options.
“The gas tax just hits working people hard, and gas prices are already pretty high, so that’s a low-priority tax if we’re looking at the whole gamut,” Pearson said.
Sen. Anthony Pollina, a Democrat allied closely with the Progressives, agrees with Shumlin that the state should rebuild better than it was before Irene. But he argues that will take a significant investment and that the money should come from the wealthy.
“We do know wealthy Vermonters have been saving money from the Bush tax cuts,” he said.
One area where the administration and the Progressives agree is that bonding to finance repairs should be strongly considered.
Shumlin has resisted steady calls for tax hikes on the wealthy that Pollina and others have made since early this year. The governor’s counter-argument: the state already has one of the most progressive tax structures in the country.
Shumlin hasn’t said whether he would support any tax increases, such as the gas tax, to help pay for the Irene recovery, because the state doesn’t yet know how much it will need to raise. He reiterated Thursday that the focus should be on getting reimbursement from Washington, D.C., by way of federal funding.
“We can’t tax our way out of this one,” Shumlin said Thursday during a press briefing. “We must have help from Congress. If we don’t have it, it’s going to have a severe impact on Vermonters and will result in what I call the second major disaster for Vermont: Irene 2.”