Statement on Gov. Peter Shumlin’s Jan. 24, 2013 Budget Address

In his Budget Address today, Gov. Peter Shumlin focused on several key areas important to job creation and Vermont’s economic future: education, child care, health care, energy, and transportation. Since government can do little to actually create jobs, we applaud the governor for speaking to these critical areas where the state can invest in making the state more conducive to job creation.

The governor made a compelling case that these investments will help the entire state. But his speech fell short because he didn’t ask all Vermonters to contribute. In fact, he is asking the lowest income Vermonters, those who can least afford it, to exert the most effort to advance his initiatives.

He proposed raising income taxes on low-wage workers by cutting the Earned Income Tax Credit (EITC), which allows these 44,000 working Vermonters to earn closer to a livable wage and support the 50,000 children in their care. He proposed reducing welfare benefits for those who are not working but who also have children to care for.  Additionally, lower income Vermonters will be hurt by increases in taxes on motor fuels and break-open tickets.

While we will be looking at the governor’s budget in more detail in the coming weeks, we think a better approach to funding the governor’s initiatives would be to broaden the base of his income tax increase.  Instead of targeting the poor by reducing the EITC, the state could eliminate or reduce other income tax deductions so that more of us take responsibility for the needed investments in our state.