Emphasis on educational priorities in Governor Shumlin’s inaugural address was met with restrained enthusiasm by Progressive legislators, who spoke out today in a press release.
Like many of us, they recognize that the devil is in the details, and as desirable as pre-K and higher educational opportunities are for Vermonters, how those initiatives are funded is critically important.
Already known for his reluctance to raise tax contributions by the wealthy, the Governor’s address suggested only one potential funding opportunity, the Earned Income Tax Credit.
The legislators are concerned that the Governor’s vision for redirecting support from the EITC will mean that new educational opportunities will be built on the backs of those least able to afford it.
Asking the Governor to take another look at alternative funding for the initiatives, Anthony Pollina (P-Washington) made the following observation:
Diverting money from the Earned Income Tax Credit shifts funds away from those who need it the most. It is a new tax that hits lower-income Vermonters hardest. Some may say this is not a broad based tax. But it is worse; it is a tax targeted at those least able to afford it: low-income Vermonters, working families, and others struggling to make ends meet. It is tax that would affect over 40,000 Vermonters. The Earned Income Tax Credit is recognized as one of the most effective anti-poverty programs in Vermont. Cutting it contradicts our focus on building a state budget that puts people first.”
His concerns were echoed by Chris Pearson (P-Chittenden) and Susan Hatch-Davis (P-Orange)
“As someone who represents an area of the state with a high level of poverty, I want to say this funding source is a bad idea. It will hurt families who are continuing to struggle in this economy. This change isn’t a question of scaling back and buying a Lincoln instead of a Cadillac. The Earned Income Tax Credit helps families afford groceries and heat. This is bare-budget stuff.
Addendum by jvwalt: I was at today’s announcement, and I’ll attach a few more points to Sue’s summary… after the jump.
Additional notes by jvwalt:
Rep. Chris Pearson said that “using the earned income tax credit to fund this is not a serious proposal. I have yet to hear from any Democrat who supports this idea. Republicans have articulated their concerns, and Progressives are solidly opposed to this funding scheme.” He noted that he’d just heard Republican Lt. Gov. Phil Scott speak out against an EITC cut, and said he couldn’t remember the last time he jumped up and down at something Scott said.
Pearson also said the Progs are working on alternative funding schemes, and implied that they might be trying to work around Shumlin’s steadfast opposition to income tax hikes:
We’re preparing some packages that would look at more than just the income taxes we’ve proposed in the past. There are a number of things where Vermont is quite unique; for instance, we’re one of only eleven states that doesn’t tax natural-resource extractions. There are some tweaks to the estate tax we could look at.
Standing in the background at the Statehouse news conference as the Administration’s Ghost-In-Chief, Human Services Secretary Doug Racine. He’d apparently been dispatched to represent Shumlin’s point of view, which he dutifully delivered. Racine noted that the EITC has grown by about 45% in the last seven years, due to increases in the federal allotment. (The state EITC piggybacks on the federal, so the two rise or fall in lockstep.) “The Governor… sees an opportunity to shift resources to a place where we an get a better bang for the buck.”
Racine estimated that the typical EITC recipient would lose about $370 out of a total annual benefit of roughly $2600.
And on the one hand, yes, it’s substantially more than recipients were getting just a few years ago. But on the other, I doubt that too many of those recipients are feeling particularly flush these days. And, as Pearson noted, while the Governor objects to “broad-based tax increases,” a proposed hike in the income tax on high earners would affect about 4,000 families — while Shumlin’s proposed EITC shift would affect more than 40,000.