- Associated Press - Friday, May 1, 2015

MONTPELIER, Vt. (AP) - With hundreds of demonstrators outside demanding tax increases on the rich to avoid cuts in social programs, the Vermont Senate on Friday defeated legislation to raise taxes on Vermont’s top two income brackets.

It did pass $34.2 million in new taxes to support a nearly $1.5 billion general fund budget, an increase of about 4.8 percent over the current fiscal year.

Part of that money would come with changes mainly affecting upper-income taxpayers. The mortgage interest deduction would be capped at $12,000 and charitable deductions would be limited to in-state charitable purposes.

It wasn’t enough for demonstrators from labor and low-income advocacy groups who observed May Day in part by crowding Statehouse hallways at midday Friday, disrupting the Senate’s deliberations over the tax bill.

Chants of “Hey hey, ho ho, budget cuts have got to go” grew louder until Sen. Richard Sears, D-Bennington, rose to his feet.

“Mr. President, point of order,” Sears said. “I cannot hear the senator right behind me. I don’t know how anybody over there can hear him,” he added, gesturing across the room. A recess was called.

While the Senate deliberated on revenue and budget bills, the House spent the day debating a miscellaneous health care bill that also included several spending provisions. Debate continued into the evening.

That bill put $2.8 million in state money into helping people who get health insurance through the Vermont Health Connect exchange pay their copays and deductibles. Another provision would put a $4 million mix of state and federal funds into the Blueprint for Health, a suite of programs including a per-patient, per-month fee paid to some primary care providers.

As things stand with about two weeks expected to go in the session, both the House and Senate are looking to apply Vermont’s 6 percent sales tax to soft drinks for the first time. The Senate includes bottled water. The House wants to apply the sales tax to candy, but the Senate rejected that on Friday.

Differences will have to be worked out in conference committees.

It would be too difficult in some instances to differentiate candy from other, tax-exempt foods, senators said.

Sen. Tim Ashe, chairman of the Senate Finance Committee, said the panel had heard from Sen. Richard Mazza, D-Grand Isle and a store owner, about the difficulties of determining which products would be taxed.

Ashe mentioned chocolate-covered potato chips as an example.

“I don’t know if I should say I’m saddened to say there are such things. But it’s even worse that the senator from Grand Isle carries them in his store,” Ashe said to laughter.


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