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Vermont Legislature
Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Payroll Tax Divides Lawmakers

While there maybe some agreement at the Statehouse on the health care policies that need to be addressed this year, there is a lot disagreement on how to pay for these programs.

Calais Rep. Janet Ancel, the chairwoman of the House Ways and Means committee, has spent a lot of time reviewing the governor's payroll tax plan. She says some committee members question if there actually is a direct link between the money that's used to increase Medicaid reimbursement rates and reductions in private health care premiums.

That connection is the foundation of Gov. Peter Shumlin’s argument for raising the payroll tax to increase Medicaid payments.

"I think the bigger concerns have been more in this question about whether the money goes back in an equitable way to the people who pay it,” Ancel said. “We're still looking at it. I know people want me to say that it's dead. It's not. It's actually still alive in the committee."

Chittenden County Sen. Tim Ashe is the chairman of the Senate Finance committee. He says most businesses will be losers under the governor's plan. He also has a fundamental concern with the proposal.

"I know people want me to say that it's dead. It's not. It's actually still alive in the committee." - Rep. Janet Ancel on the payroll tax

"There are some of us who are somewhat worried that this proposal when we think about it in terms of our health care economy,” he said. “It feeds the beast. Some of us would like to put the beast on a diet, and so we're still unconvinced that this isn't just adding more dollars into a system that we're ... almost unanimous across the Legislature in saying needs to be reined in."

Some lawmakers want to pay for these health care programs by imposing a tax on sugar-sweetened beverages. Last year, the House Ways and Means committee rejected this approach on a six to five vote. Rep. Ancel thinks the tax makes a lot of sense.

"I continue to support it, understand the connections between sugar sweetened beverages and health care and to me that connection makes a difference to people but it's really an uphill battle in my committee," she said.

Ashe says he's reluctant to tie future health care spending to a revenue source that will likely decline in the coming years as fewer people consume sugar-sweetened drinks. Ashe says there's also a geographical concern.

"We also have a Senate that has at least half of its members along the New Hampshire border who have great concerns about whether the revenues would really come in quite as anticipated and people can go any buy several cases of soda in New Hampshire and then come back,” he said.

The House Ways and Means committee is expected to make a decision about how to raise money for these health care programs in the next few weeks.

Bob Kinzel has been covering the Vermont Statehouse since 1981 — longer than any continuously serving member of the Legislature. With his wealth of institutional knowledge, he answers your questions on our series, "Ask Bob."
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