[A] House-backed proposal that would double the tax on heating fuel to boost funding for low-income home weatherization is now facing resistance from both the governor and Senate leaders.
The legislation, which passed the Legislature’s lower chamber last month, would raise the fuel tax from two to four cents per gallon.
The hike would generate $4.6 million in new revenue for weatherizing homes for low- and moderate-income Vermonters.
Raising additional dollars for the Vermont’s weatherization program this session is a shared priority among the House, Senate and governor’s office. The state efficiency program lowers heating fuel costs and reduces carbon emissions.
But Gov. Phil Scott, a Republican, and Senate President Pro Tem Tim Ashe, D/P Chittenden, have concerns that a higher fuel tax would place a burden on the Vermonters it aims to help.
During a press conference last week, Scott suggested he wouldn’t support the legislation, and said increasing the tax is “moving in the wrong direction.”
“It’s regressive, so regressive, it hurts the rural parts of our state,” he said. “It hurts the people we’re trying to help and I think we need to take a different approach.”
On Tuesday, Sen. President Pro Tem Tim Ashe, D/P Chittenden, that he felt “general discomfort” towards the legislation, and relying on a “regressive tax” to fund weatherization.
“We’re particularly worried about the impact on lower and moderate income households and also people living in rural areas,” Ashe said.
The Senate is considering alternative proposals to boost weatherization funding.
Ashe said It’s also possible the Senate could back an increase in the fuel tax, if lawmakers could also decrease the tax consumers pay on electricity.
“It could be that by reducing one and increasing the other one in some commensurate way you’re not making life less affordable for anyone but you’re freeing up the dollars to be used for weatherization and heating efficiency,” he said.
Democrats in the House who backed the fuel tax hike argued that ramping up weatherization efforts would eventually save low income families money.
Weatherized homes reduce fuel consumption by 30 percent on average and can result in savings as high as $500 per year on energy costs.
“Unlike the gas tax and unlike the sales tax, this revenue goes entirely to low-income families,” Rep. Janet Ancel, D-Calais, the chair the House Ways and Means Committee told legislators on the House floor last month.