A group of Democrats in Montpelier are introducing set of new bills to tax fossil fuels with the aim of discouraging environmentally damaging activities while easing other tax burdens on Vermonters, or simply putting the money back in Vermonters’ pockets.
Rep. Martin LaLonde, a South Burlington Democrat, held a news conference at the Ben & Jerry’s corporate offices in South Burlington to announce his bill. LaLonde’s proposal would use the proceeds of a tax on fossil fuels to contribute to the state education fund, which would reduce the pressure on property taxes to cover the cost of Vermont’s schools.
“This would be a revenue-neutral tax swap,” LaLonde said. “Every dollar raised off a fee on carbon pollution would go to reducing property taxes.”
LaLonde said his is part of a suite of four bills in Montpelier being introduced near the end of the 2017 legislative session, all proposing a tax on fossil fuels for their greenhouse gas emissions, and all proposing different ideas for how the new revenue can be used to help the state’s economy.
Republican Milton Rep. Don Turner, the House minority leader, said the proposals are a “non-starter” for many House Republicans who see affordability as the top issue for their constituents.
LaLonde outlined his bill and three others as having major economic upsides for Vermonters, even if it means paying more at the fuel pump.
"These are ideas that would strengthen Vermont's economy and align our tax code with our priorities." — Rep. Martin LaLonde, D-South Burlington
“One would offset sales tax with the proceeds from a carbon pollution fee, another would reform income tax, and a third would provide a dividend to all Vermonters based on the revenue created from a carbon pollution fee. These are ideas that would strengthen Vermont’s economy and align our tax code with our priorities,” LaLonde said.
A tax on fossil fuels isn’t a new idea in Vermont; when the idea came up in 2016, Republicans used it as a campaign tool and launched an attack ad, which said in part, “Democrats lobbied for an 89-cent per gallon tax on gasoline and home heating fuels.”
In the 2017 legislative session, other legislative efforts – such as fast-tracking a bill to defy President Donald Trump on immigration, marijuana policy reform, and developing a state budget consistent with new Gov. Phil Scott’s demand that no new taxes or fees be included – took priority. The idea of a new fossil fuel tax has not been a major focus. LaLonde said he hopes these bills will give him and other proponents a chance to re-frame the conversation about the policy.
For one thing, LaLonde was very clear that all four proposals are revenue-neutral.
“We’re not looking to raise more money to spend,” LaLonde said. “And that was what the bill that was attacked by the Republicans last fall also did, but that story was not told. And it also was not told that this was a gradual increase in the fee on carbon pollution that, I believe it was over five years, would get to the level of 87 cents [per gallon], because that’s what everybody heard, was ‘We’re going to tax gas by 87 cents,’ well the full story was not told.”
Referring to the Republican criticism last year as a “scare tactic,” LaLonde said supporters of the tax proposal are “certainly trying to get out and make individuals- or allow individuals, to understand the facts behind these proposals for having a fee on carbon pollution.”
"It's just going to allow the schools to continue to spend, and that is not revenue-neutral." — Rep. Don Turner, House Minority Leader
Turner, the Republican minority leader, said that LaLonde’s proposal may appear to be revenue-neutral, but isn’t.
“You could make that argument if the cost was contained and the costs weren’t going to continue to increase,” Turner said. “It’s just going to allow the schools to continue to spend, and that is not revenue-neutral.”
Many of the details, however, remain unclear. The four new bills are “short-form,” meaning they introduce an concept but not a specific, turnkey policy for the state to implement.
“At this point, there are not a lot of nuts and bolts in the bill,” LaLonde said. “It’s really the concept, and the details need to still be worked out. The concept [of this bill] basically being a fee on carbon pollution that would be put into the education fund, and the education fund would have to raise less money through the property tax.”
LaLonde acknowledged that with the 2017 session closing in a matter of weeks, it’s not likely that the bills will pass this year. This is the first year of the legislature’s biennium, however, which means the bills introduced in the 2017 session can still be taken up by lawmakers in 2018.
Vermont Republican Party Executive Director Jeff Bartley made it clear in a statement that Turner’s uncompromising view of a new tax for fossil fuels is consistent with the party line.
"The fact is a carbon tax will take millions more dollars from Vermont taxpayer’s, [sic.] increase the costs of goods and services across the board, cause more businesses to shut their doors and cost us jobs,” Bartley said in the statement. “That is exactly why Governor Phil Scott has repeatedly pledged to veto a carbon tax and Vermont's Republican legislators are prepared to sustain that veto should it become necessary.”
