By Representative Heidi Scheuermann

The Vermont General Assembly convenes for its new biennium on Wednesday, January 5, 2011.

Unfortunately for property taxpayers, over $60 million of this deficit is money that is supposed to be transferred from the General Fund into the Education Fund, and unless that transfer happens, the statewide property tax will increase by over 6 cents. Given the already high property taxes in Stowe, and throughout the state, this is of great concern to me.

While the deficits over the past three years have been as substantial, we relied heavily on federal stimulus dollars and tax increases to patch the state budgets. Now we face a very different reality. There is no more federal stimulus money coming, state revenues have stabilized but remain at below 2008 levels, the demands for state services continue to increase, and Challenges for Change (the effort to redesign state services to control state spending) has only partially materialized. Most significantly, the $23 million in anticipated reductions in education spending in CFC is projected to result in just $4 million. Meanwhile, Governor-Elect Peter Shumlin has proposed using a $19 million one-time appropriation from the federal government to fill the gap. Once again, however, this use of one-time monies merely defers the education dilemma for another year. Obviously, developing a responsible state budget will be the most pressing issue facing us this coming session. But there are other significant initiatives that will be at the forefront. First and foremost, the Blue Ribbon Tax Commission will be releasing its report later this month. This three-member commission has been working for over a year on proposals to modify our tax code in an effort to make it "simple, fair, sustainable, and economically competitive" in a manner that is revenue neutral.

From all indications it appears as though two of the most significant recommendations will be 1) that the basis for Vermont’s income tax be moved from Taxable Income to Adjusted Gross Income, and 2) that we expand our sales tax to include business-toconsumer services. The first would allow for a reduction in tax rates, but would also eliminate a number of federal deductions Vermonters now take to reduce state income taxes. The second proposal would allow for a reduction in the sales tax rate, but would institute a new tax that would apply to many services provided by our local businesses that are not currently taxed.

I look forward to reviewing the work of the Commission in its entirety when the report is unveiled at the end of this month. Specifically, I will research what the overall effect of the proposed changes would be on our state’s economy as we emerge from this recession and beyond, and if the effort to broaden the base and reduce the rates at this time simply lays the groundwork for increasing the rates next year or in the near future.

As has been the case in the past, I will continue this legislative session to work hard for meaningful education and education funding reform, responsible state spending, and for policies that allow for the private sector to grow and create jobs for Vermonters. Frankly, given the priorities outlined by Governor-Elect Shumlin, and past initiatives from him and the legislative majority, I anticipate some respectful disagreement.

As always, I encourage you to contact me with any questions or concerns, and I will do my best to keep the people of Stowe and Lamoille County informed as the session progresses. If you are interested in receiving my regular email newsletters which usually include more in-depth information and observations, please contact me. I can be reached at 253-2275 or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .