Business & Economy

Vermont House backs gas tax rise despite Republican objections

A bunch of lawmakers surround Majority Leader Willem Jewett, as opponents of a gas tax try to enter a petition into the record on Wednesday, March 20,2013. Photo by Nat Rudarakanchana
Lawmakers surround Majority Leader Willem Jewett, as opponents of a gas tax try to enter a petition into the record on Wednesday, before the House gave preliminary approval to a 4 percent gas tax increase. Photo by Nat Rudarakanchana

After a day-long debate marked by defeated amendments and many speeches, the Vermont House eventually backed a new 4 percent sales tax on gas, 105-37, over repeated Republican objections.

The debate today clears the way for a final formal vote in the near future, likely later this week. Much substantive debate came today, but the legislation eventually survived intact and only slightly altered from a Shumlin administration proposal from late January.

The legislation phases in a 4 percent sales tax on the pre-tax price of gas over two years, but also lowers the state’s per gallon excise tax by 5.9 cents per gallon, from 19 cents per gallon to 13.1 cents per gallon.

The bill calls for $10.38 million in bonds and over $5 million in transportation spending cuts, including a $1.8 million cut to maintenance programs, about $600,000 to paving and $600,000 to rail programs. Nine rail projects would be cancelled under the plan.

The proposal is set to raise about $36.5 million in new revenues from the gas sales tax, without which the state will lose about $56 million in federal matching funds. It’s also intended to address volatile gas prices and declining gas consumption by providing a blended revenue source.

Overall, Vermonters will see a 7.5 cent increase in gas taxes, by 2014, with the first phase of the tax coming this May. There’s a minimum floor, so that Vermonters will never pay less than 13.4 cents of gas taxes, even if gas prices go below $3.88 a gallon, and a maximum ceiling, so people won’t pay more than 19 cents per gallon, even if prices rise to $5.30 a gallon.

House Transportation Chair Pat Brennan, R-Colchester, pitched the increase as a needed one-time fix to maintain the state’s crumbling infrastructure, avoid losing federal money and mitigate the effects of long-term declining gas consumption.

On the House floor, Brennan recalled the happier days of 2005, when gas cost $1.86, and when the state’s drivers used 39 million gallons more gas, a plus for state coffers.

“It was not an easy choice to move in this direction, and we didn’t make this decision lightly,” said Brennan. “We explored anywhere between 15 to 20 different funding options, and we ended right back here every time.”

Meanwhile, House Republicans and some Democrats made it apparent they’d oppose parts of the package, branding it “regressive.”

Four Republican amendments failed roundly on the House floor. Two attempted to eliminate tying the gas tax to inflation, or levied new taxes and registration fees on electric vehicles. Others cut state subsidies to Amtrak by $7.65 million, upped bonding from $10.3 million to $16.6 million, or prevented future transfers from the Transportation Fund for other state programs.

By tying the gas tax to inflation, or the CPI index, the state could have raised about $27 million more annually than it does now, according to mid-February Joint Fiscal Office committee documents. But taxes would have also grown about 8 cents between 1994 and 2012, with average increases of less than a cent per year.

Some lawmakers blasted this as an “escalator” automatic increase, which wouldn’t be scrutinized or voted on yearly.

Rep. Cynthia Browning, D-Arlington, argued that the tax should be imposed only for one year, to safely secure the federal funds, but then repealed. She said lawmakers could then take more time to permanently solve transportation funding problems, including a $240 million annual budget transport gap.

“When the price of gas goes up, the inflation will go up, the tax on gas will go up, and the burden on working Vermonters’ budgets will be greater,” Browning said. She said she understood the need for transportation revenue, but wanted lawmakers to show the same kind of concern for impacts on the budgets of the poorest Vermonters.

She argued that the federal funding crisis was being used as an “excuse” to put through a substantial permanent gas tax increase.

To make their points, both sides also brandished documents. Brennan circulated color photos of the state’s poorly maintained roads and a Newark bridge, while Rep. Ron Hubert, R-Milton, wanted an anti-gas tax petition signed by 13,000 Vermonters entered into the legislative record.

Throughout the day, three House committees – Transportation, Ways and Means, and Appropriations – repeatedly backed the initial package, in decisive votes, taking the wind out of potential amendments.

In a House Democratic caucus to outline the proposed amendments, Rep. Diane Lanpher, D-Vergennes, who sits on House Transportation, said only once in the past had the state failed to take enough federal funds.

“We’ve only once in the history of Vermont left any federal dollars on the table, and everyone was fired the next year,” Lanpher told the caucus, to laughs.

Deputy Transportation Secretary Sue Minter believes that lapse happened under the Kunin administration, with the then-Transportation secretary fired for failing to secure those funds, though she isn’t sure of the details.

The last time the state faced a similar crisis to draw down federal funds was in 2006, Minter said.

After the defeat of all the amendments, House Republican Leader Don Turner said: “We did the best we could. We have only 45 people here, but we’ve made our case. I hope we showed you that there are other choices to be made in the transportation budget.”

House Speaker Shap Smith told VTDigger he supports the tax because the federal revenue is sorely needed. Smith couldn’t preside over the debate because he had to act as governor in the afternoon. Both Gov. Peter Shumlin and Lt. Gov. Phil Scott were out of town.

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  • Tony Lolli

    Two words: CUT SPENDING!

    • Neil Gerdes

      Cut spending on the roads? Are you insAne?

    • Peter Liston

      That’s what people say until it’s road and bridge maintenance on their road that gets cut.

    • Cheryl Pariseau

      Tony has a perfect response to this new broad based tax (this is broad based regardless of what they want to say)!. The transportation money has been being “re-appropriated” for years. Had they not robbed Peter to pay for Paul then this tax would not have been needed. These civil servants didn’t want to make it look like they were out of control with their spending years ago so they took from one fund to prop up the other. Now that house of cards is falling down and they want us to pay even more. CUT SPENDING AND DUPLICATE SERVICES!!!

  • Jim Christiansen

    “The proposal is set to raise about $36.5 million in new revenues from the gas sales tax, without which the state will lose about $56 million in federal matching funds.”


    “House Speaker Shap Smith told VTDigger he supports the tax because the federal revenue is sorely needed.”

    These quotes imply the Transportation Fund does not raise enough in existing taxes to draw down all available federal funds, and that is bullsh*t.

    The Transportation Fund has more than enough money to secure all federal funds if the transfer of regressive gas tax monies to the Education Fund is stopped.

  • Jane Stein

    The math isn’t adding up for me.

    If the current tax is 19 cents a gallon and the legislation specifies we should never pay more than 19 cents a gallon, how come you say we’re going to be paying 7.5 cents more by 2014?

    What am I missing?

  • Tony Redington

    For the 9,000 Vermont workers who 2000-2010 chose travel other than by car to work (no additional workers chose car travel to work during that period), the increase in the gas tax does not amount to a hill of beans. Increasingly people flee the car travel mode and the taxation related to that mode. Instead of worrying about matching federal dollars, transportation committees need to deal with the new transportation needs of the state which require switch to broad base taxes–commuter rail, incentives not to drive, walking and bicycling infrastructure in urban areas and town centers, public transit, and–yes, sufficient funds to support the current unmet highway needs.

    Tony Redington Blog:

  • Walter Carpenter

    Does that mean to not fix the roads? Cut spending and just leave the roads as they are?

    • Craig Powers

      Try using the money already collected instead of raising more money through new taxes.

      No one has the kahunas to even suggest this as a viable option.

      • Michael Stevens

        What do you think happens to money already collected?

        Are you actually saying this money is not being used?

        • Craig Powers

          As usual Mr. Stevens is trying to twist words and pick a fight.

          If it is not clear what I wrote…reread it and think about it some more.

          • Michael Stevens

            What you wrote was obtuse and misleading.

            As usual, Mr. Powers is unhappy with the state he lives in and chooses to double down on his none sense rather than have a sensible conversation.

      • Kathy Nelson

        Craig, I think you mean “cahones”, the Spanish word for testicles. If you’re talking about the VT legislature there may be some other anatomical points involved that are lacking.
        Kahunas, by the way, are Hawaiian priests/priestesses of the religion native to those islands.

        • Craig Powers

          Thank for the correction. My bad.

  • Peter Liston

    The Republican objections will stop in the Senate, where Republican Transportation Chair Rich Westman has been advocating this tax hike.

    Westman has supported gas tax increases since his time in the House.

  • Sheila Tourangeau

    The tax wagon that Shumlin is running will eventual spill over and so will his days in office. I am usually for Democrats, but these days they won’t cut anything and want to tax us for everything. Balance the budget! As for a gas tax to fix roads the problem in VT has a history of taking from the Transportation fund when they need money for Education. I still cannot figure why we need a 5 cent property tax hike when the number of students enrolled in schools is down?

    • Peter Liston

      Perhaps you missed the part where it said that the REPUBLICAN Chair of the House Transportation Committee is championing this tax hike.

      And the REPUBLICAN Chair of the Senate Transportation has been pushing this tax hike for years.

      This is a BI-PARTISAN tax hike.

      P.S. If you want school taxes to go down, go to Town Meeting and vote down your school’s budget.

  • John Skalecki

    Here we go again. Our Government making it harder for us to live here. Now even more people will move out and you will have to raise the taxes again to make up for the lost revenue that is YOUR fault to begin with. It seems you wont be happy until the entire state is just rich second home owners who can afford to pay. Thanks again Montpelier.
    Welcome to VT, More taxes and less services. Unreal.

  • Jason Rouleau

    So Bernie’s work to lower VT gas prices for all his hard working constituents so they can put more money in their pockets is nothing but a facade. Apparently the real purpose of his probing is to force VT gas prices lower, in order to make room for more taxes. What a sham. He’s a dirty politician just like the rest of them.

    • Peter Liston

      Yea! Shame on him for working for lower gas prices!

  • Jim Barrett

    It’s too late folks and we never had a chance to talk down increases in taxes in Vermont. This is a tax state, rape the taxpayers every way they can because they know you have ZERO clout…yes ZERO.

    • Michael Stevens

      Fun fact, every time a Republican refers to taxes as “rape” they not only weaken the argument, but also remind of us a certain Mr. Akin.

      • Moshe Braner

        Yeah, if this gas tax is a “rape” then it’s a “legitimate” one. Oops. Never mind…

        What I don’t get about anti-tax Republicans is how happy they are to spend gazzillions of our tax dollars on some things, especially military stuff.

        • Michael Stevens

          Personally, I just chalk it up to hypocrisy.

  • Arthur Hamlin

    It would be helpful if you could cite the bill number in the article. Does this bill still have to pass the Senate?

  • Luci Stephens

    I think the bill Mr. Mr. Hamlin’s question refers to is H.510. It is a 4% tax. If the bill becomes law (it appears to have considerable support) we will all pay a price for diversions of transportation fund dollars to other programs and projects. Maybe the time is coming when the legislature should look at the pros and cons of designating certain funds as ‘sacred and untouchable’ and constructing walls that make it impossible for those funds to be diverted to other uses, no matter how compelling. This particular tax will affect us all, and it will strike struggling individuals and businesses dependent on vehicle fuel especially hard. If we do not protect our truly vital infrastructure funds, I think we can realistically expect more of this in the not-too-distant future.

  • Instead of taxing the working class, they need to remove the tax cap for the rich. I get taxed on all the money I earn, why don’t people with big money get taxed on ALL the money they earn. This would solve some of this tax bullSh*t…maybe if people like Shumlin followed the same rules as the American public and took home a paycheck like most working class, this wouldn’t be an issue.
    I get so tired of all these people who never have to worry about loosing their jobs because they decided to vote themselves in for life. While out in the REAL working world these taxes are going to cause layoffs because if busissinesses can’t afford to pay for fuel they will make a choice.

  • Roy Hobbs

    Listen, both sides are to blame here, Dems & Rep. are both spend happy with Tax payer money, OUR hard earned money!
    With the price of gas and it going even higher now has forced me to give up my second job which involved a lot of driving, even with a Honda Accord it’d not worth it for me, which means one less income and with the pitiful “salaries” that are in VT is forcing me back to NJ which I don’t want to do but at least down there I can make a livable wage and be able to pay my bills. In VT it’s getting harder and harder to stay here, frankly I can’t afford to, between lousy paying jobs, and I do mean LOUSY, and the cost of living is pretty close to what it is in Jersey, not to mention gas in VT is already .50 cents MORE per gallon than NJ and now it’s going higher??
    When you have more people taking from the system than what people (who actually work) pay into the system you will ALWAYS have a shortfall, too many people addicted to government crack which is what the politicians in Washington (both parties) want, in turn they get votes and the spending goes on!
    I work my ass off to support my kids, I wish more people had the work ethic my father gave to me, he didn’t teach me to take govt. handouts…..