Student loan relief also comes with tax relief

Posted by Jack Hoffman on September 27, 2022 at 3:23 pm | Comments (0)

Vermonters who qualify for a reduction in their student loan debt will get another break from the state: The loan forgiveness won’t be taxed.

Debt forgiveness is typically counted as income and taxed by both federal and state governments. People who negotiate debt reduction with credit card companies are sometimes surprised to learn they owe income taxes on the amount written off.

Before President Joe Biden announced his student loan forgiveness plan, the American Rescue Plan Act (ARPA), passed in 2021, anticipated the tax consequences of such a proposal. Under ARPA, federal student loan debt forgiven through 2025 is not be counted as federal taxable income.

Joe Wiah, Refugee Resettlement Director, to Receive the 2022 Con Hogan Award

Posted by Staff on September 22, 2022 at 11:42 am | Comments (0)

The Vermont Community Foundation and the organizing committee for the Con Hogan Award for Creative, Entrepreneurial Community Leadership are pleased to announce that Joe Wiah will be honored with this year’s award. Wiah is Director of the Ethiopian Community Development Council’s (ECDC) Multicultural Community Center in Brattleboro.

The annual award, established by a group of Con Hogan’s colleagues in 2015, celebrates his life’s work by recognizing a community leader who shares his vision of a better Vermont and seizes the responsibility for making that vision real. The awardee shows deep community involvement, generosity, enthusiasm, a collaborative approach, and a focus on data and measurable outcomes in their work.

State revenue: What do we want for the new “normal”?

Posted by Jack Hoffman on August 18, 2022 at 1:34 pm | Comments Off on State revenue: What do we want for the new “normal”?

A strong economy, spurred by federal stimulus money and funds to fight the COVID-19 pandemic, is producing a surge in Vermont state tax receipts. Personal income taxes are up, meals and rooms taxes are up, and so are corporate taxes.

Now is the time to start planning for when revenues come back down to earth.

A giant leap backward

Posted by Staff on June 29, 2022 at 9:38 am | Comments Off on A giant leap backward

The U.S. Supreme Court’s decision last Friday to overturn Roe v. Wade has devastating effects on anyone who can get pregnant. Plain and simple, this ruling is a clear effort to assert control over women’s bodies and therefore our agency, our autonomy, and our freedom.

Vermont has codified the right to reproductive health care in statute and will vote on a constitutional amendment to reinforce that in November. The governor issued a statement on Friday in support of that right and the amendment. But none of that means that Vermonters are shielded from the consequences of this decision.

Many have made the case that this ruling is wrong, that it sets us back 50 years and that it subjugates those who can get pregnant to the whims of the state they live in. Others have pointed out that the history of systemic racism in this country means that Black, Indigenous and other people of color will pay a disproportionate price for this ruling. Low-income people will struggle to access health care that better-off individuals can seek across state lines. And the lack of access to reproductive health care has severe long-term economic consequences for women and their families. These are all true, and yet this is even bigger than any of that.

What’s the plan when pandemic aid ends?

Posted by Jack Hoffman on June 9, 2022 at 3:26 pm | * Comments (1)

In the past few years, Vermont has gotten a taste of what it would be like to have a state that worked for everyone who lives here. Thanks to extraordinary federal relief in the wake of the COVID-19 pandemic, the state received billions of dollars that allowed policy makers, at least for a time, to acknowledge and address gaps that had been lingering for decades: health care, child care, livable incomes, and clean water to name a few. Read more

A flexible, effective revenue adjustment tool

Posted by Jack Hoffman on May 12, 2022 at 2:56 pm | Comments Off on A flexible, effective revenue adjustment tool

Twenty years ago, Vermont lost a valuable tool that let the state easily adjust state revenues to respond to fluctuating demands for public services. It’s time to find a replacement.

In 2002, the state ended the simple, straightforward system for assessing personal income taxes that had been in place for more than 30 years. Vermont stopped using the “piggyback,” whereby the amount of income tax a person owed to Montpelier was calculated from the amount owed to Uncle Sam. Typically, the rate was about 25 percent of a person’s federal tax liability. But it varied, which was the beauty of that system.

Vermont started using the piggyback in 1968. As a result, it had one of most progressive personal income taxes in the country because the federal income tax was much more progressive than typical state income taxes. Under the federal system, income is taxed in tiers, and income in the higher tiers is taxed at higher rates than the income in the lower tiers. Such systems are fairer because they better reflect people’s ability to pay. Thanks to the piggyback, Vermont’s income tax system mirrored the progressivity of the federal system.

Vermont needs to make a real, ongoing commitment to our kids

Posted by Julie Lowell on May 6, 2022 at 1:28 pm | * Comments (1)

We saw first-hand how the expanded 2021 federal child tax credit (CTC) reduced child poverty in the country. The additional income to families from refundable state credits like CTCs have also been shown to improve child development and educational outcomes and boost local economies. Seeking these benefits for the state, the Vermont House initiated a state CTC earlier this legislative session for kids six and under. But the state Senate has cut back the House bill and would end the credit in 2025.

In order to lower the price tag, the Senate’s version of the CTC, passed last week, would help fewer children and families than the House plan. The Senate reduced the amount of the credit, disqualified six-year-olds, and lowered the income threshold for qualifying families, cutting nearly 10,000 kids from the benefits of the credit.

Where is the state headed?

Posted by Jack Hoffman on April 29, 2022 at 10:43 am | Comments Off on Where is the state headed?

The Vermont House, Senate, and governor’s office are thrashing out their differences over state appropriations for the coming fiscal year that will total roughly $8.3 billion. We’re all aware that a massive amount of federal aid has poured into the state in response to the COVID-19 pandemic. But it’s worth pausing for a moment to grasp the magnitude and the potential of all of that aid.

In the five years prior to COVID, Vermont’s annual spending averaged about $6 billion a year. Since COVID, the budgets have been: $6.3 billion (FY2020), $7.2 billion (FY2021), $7.9 billion (FY2022), and $8.3 billion (FY2023, pending).

Much of the early COVID money—and not all of it flowed through the state’s coffers—was used to protect people from the virus and treat its victims, but it also was intended to protect states from economic collapse. States faced extraordinary and unexpected costs, and fortunately the federal government stepped up to foot the bill.

Then came the American Rescue Plan, which extended and expanded some of the earlier programs, but also contained some elements of a traditional economic stimulus plan. As part of that plan, Vermont received $1.05 billion, essentially, to spend as it saw fit.

Child poverty in Vermont

Posted by Julie Lowell on April 1, 2022 at 1:01 pm | * Comments (1)

Does Vermont want to help families with children living in poverty?

So far we’ve gotten a mixed message from policymakers on this question.

But there is still time for the Legislature to act decisively.

The Ed Fund needs an outside opinion

Posted by Jack Hoffman on March 17, 2022 at 3:33 pm | * Comments (1)

Gov. Phil Scott wants to use a $96 million surplus in the Education Fund for a little tax relief for homeowners and to expand job training. Another scenario laid out by the tax commissioner in December was, in essence, to just lower everybody’s school taxes for one year. These aren’t the only options, nor the best ones, which is why the Legislature needs to create an Education Fund Advisory Committee to oversee the long-term stability of the education finance system.

Governor Scott proposed last week that half of the surplus—about $48 million—be returned to resident homeowners in the form of a rebate. He recommended a flat amount of $250-$275 to each household. If you were going to issue rebates, that would be a better way to do it than, say, a small percentage reduction in everyone’s tax bills. The percentage approach favors those with higher tax bills, i.e. those with more valuable property or higher incomes. A fixed rebate is better for lower-income households, but better still would be to set a maximum income threshold and to include something for renters.