Gov. Phil Scott’s 2020 budget includes millions for electric vehicle incentives, and tax breaks for companies working on clean energy projects.
But Democratic lawmakers, who face mounting pressure to drastically cut carbon emissions, are unimpressed by the Republican governor’s climate change proposals, and are ready to pass their own legislation, in the face of opposition from the Republican governor.
“I think we need a much more visionary position,” Sen. Majority Leader Becca Balint, D-Windham, said of Scott’s climate change initiatives Tuesday. “I think what I’m going to hear from my caucus when we meet next is that it is not a bold enough investment on climate initiatives.”
The governor, who has put electric vehicle incentives at the forefront of his climate action strategy, pitched an additional $3 million in incentives to help Vermonters purchase EVs.
His proposed spending package would also dedicate 25% of all future budget surpluses towards initiatives that support electrification and home weatherization, instead of the state’s rainy day fund. Surplus funds are currently split 50/50 between the state’s rainy day reserves, and paying off the state’s pension obligations.
Scott said that if this provision had been in effect last year, when the state saw a surplus of $40 million, an additional $10 million would have gone toward spending on climate change.
Democratic leaders were quick to criticize the plan to redirect surplus funds to climate spending because it would diminish reserves in the event of a downturn in the economy.
“His proposal is taking away from our financial future,” House Speaker Mitzi Johnson, D-South Hero, said Tuesday.
The budget would also invest $3.15 million towards a “Clean Grid Modernization Package.”
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This package includes about $500,000 in tax credits for companies that “promote research and development into clean energy.” It would also use $400,000 to eliminate corporate income taxes for companies that are working to make Vermont’s electric grid more efficient. And it includes $2 million for “capital and technical investments” for companies working to optimize the electric grid.
“[To] send a crystal-clear message about how highly we value climate economy employers and how much we want them to be part of our future, I propose we eliminate the corporate income tax on these job creators,” Scott said in his address Tuesday.
Sen. Chris Pearson, P/D Chittenden, a vice-chair of the Legislature’s Climate Solutions Caucus, said he would not be inclined to support the tax breaks for companies working on clean energy initiatives, which he believes are already thriving in Vermont.
“These are companies that are not struggling, they’re doing very well,” Pearson said. “I just think that it’s an easy talking point to eliminate the corporate tax for green jobs. I just think that is a blanket approach and does not necessarily reflect the economics of those businesses.”
Pearson said he approved of the governor’s decision to increase spending on electric vehicles, and his plan to roll-out a pilot program to collect revenue from EV charging stations to invest in transportation maintenance.
Scott has signaled he will not support major climate change initiatives Democrats are expected to send to his desk later this year.
In particular, the governor has reservations about the Transportation and Climate Initiative, a multi-state push to charge companies for fossil fuels brought into the state. Money collected through a regional cap and trade program would be used for carbon-cutting initiatives.
Participating in the agreement could increase gas prices in Vermont by as much as 17 cents per gallon, according to an early version of the plan. Republicans have blasted the proposal as a “carbon tax,” and in his State of the State address, the governor said that he could not support climate change legislation that raised costs for Vermonters.
Fellow Republicans championed Scott’s climate initiatives Tuesday saying they are aimed at helping the state reduce its carbon footprint without raising taxes.
“We really still need to do our part, and I think this is a way of doing it without slapping in another tax on already taxed individuals,” said House Minority Leader Patricia McCoy, R-Poultney.
Sen. Randy Brock, R-Franklin, liked the idea of investing future budget surpluses towards climate initiatives because it allows the state to spend on targeted needs, like weatherization, “rather than things that we talk about in theory.”
Renewable Energy Vermont, a trade group, also came out in support of Scott’s incentives.
“Every Vermont community should be empowered to generate and store its own power locally – which is only possible if we modernize and improve efficiency of the grid,” Olivia Campbell Andersen, REV’s executive director, said in a statement.
Sarah Copeland Hanzas, D-Bradford, co-chair of the Climate Solutions Caucus, said the governor’s climate initiatives a“good faith gesture” but said they “fall short of reacting to the crisis that’s before us.”
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“We need to be investing more money faster in helping Vermonters move to sustainable heating and transportation technologies,” Copeland Hanzas said.
Kit Norton contributed reporting.
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