- Associated Press - Thursday, March 27, 2014

MONTPELIER, Vt. (AP) - The Vermont House Thursday endorsed a $1.44 billion budget after rejecting higher income tax rates on top earners to make up for cuts in federal support for food stamps.

It voted to support a 92 percent tax on the wholesale cost of e-cigarettes, and boosted taxes on other smokeless tobacco products, including snuff and chewing tobacco.

The budget crafted by the House Appropriations Committee calls for a 3.8 percent spending increase for the fiscal year starting July 1 over the current year.

The committee’s chairwoman, Rep. Martha Heath, D-Westford, said that the budget “makes investments in strategies that will reduce future costs, address poverty, tackle opiate addiction, spur job growth and drastically reduce our reliance on one-time funds.”

The budget comes up for final House approval on Friday before moving to the Senate,

Thomas Briant, executive director of the National Association of Tobacco Outlets, told lawmakers that the e-cigarette tax increase would raise the average price of the smoking devices, which heat a liquid usually containing nicotine into a vapor, from $7.99 to $18. Lawmakers said that would generate about $500,000.

Health said the budget would provide $10 million in new money to cope with what Gov. Peter Shumlin has called a drug abuse crisis - particularly heroin - in Vermont. One focus will be trying to divert people from the criminal justice system into drug treatment.

Minority Leader Rep. Don Turner, R-Milton, said the budget relied too much on “one-time” funding - money for which there will be demand but no set source in subsequent years. He cited projections from the nonpartisan Joint Fiscal Office saying that would lead to budget gaps of $70 million in fiscal 2016 and $72 million in 2017.

“It’s growing spending more than we can sustain,” Turner said. “We’re spending faster than we’ve grown” revenues.

The budget and accompanying tax bill drafted by the Ways and Means Committee did not do enough to address poverty to satisfy some of the more liberal members of the House.

Rep. Paul Poirier, a Barre independent, unsuccessfully pushed for the income tax increases to boost food stamp funding. He said he wanted the state to make up for a roughly 10 percent cut in federal food stamp funding that took effect in November.

“One out of every six Vermonters depends on some kind of financial help to put food on the table,” Poirier said. He said the average food stamp benefit before the federal cut was $243 per month for a family.

“I would ask anyone in this (House) chamber … if you could feed your whole family for a month on $243,” Poirier said.

Under Poirier’s proposal, a household with an income of $225,000 would see a $14 tax increase, he said. A household making $350,000 would see an $889 tax increase and one making $1 million would see state income taxes climb $7,244 to $90,438, Poirier said.

The House voted down Poirier’s amendment to the tax bill, 115-28. When he later tried to add $10 million to the budget for food stamps without identifying a revenue source, he was voted down, 120-15.

Heath later said the federal government increased food stamp funding in 2009 as part of a wide-ranging spending bill designed to boost the nation out of the recession. She said that increase was widely understood to be temporary.

“I didn’t have a single advocate ask me for that money,” she said. “The state can’t just pick up every single cut the federal government makes.”

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