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FISCAL DISCIPLINE & RESPONSIBLE TAX RELIEF

NOTE: Our site is currently undergoing an update and the below information may not be fully up-to-date.

Strategic Budgeting & Lowering Costs of Government

  • Established a Growth Rate Calculation, a figure based on a six-year rolling average of wage growth, which serves as the base for budget growth rather than past practice of using forecasted revenue growth. 
  • For both FY18 and FY19, the Governor presented and passed balanced budgets that do not grow faster than Vermonters' growth in wages.
  • Reduced General Fund operating cost increases by $32.5 million, while improving the delivery of services.

Holding the Line on New Taxes & Fees

  • Did not sign a single bill that created or increased taxes or fees during his first term in office.
  • The FY18 State budget did not raise or add taxes or fees and held statewide property tax rates level for residential and non-residential rate payers.
  • The FY19 State budget did not raise or add taxes or fees and held statewide property tax rates level for residential rate payers for a second consecutive year.
    • The Governor vetoed two budgets in 2018 to prevent an increase to non-residential property tax rates, but under threat of a government shutdown, the budget became law without his signature. No Governor has fought harder to prevent unnecessary tax increases.  
  • Worked to implement a new approach to managing the State’s Education Fund, which – with the support and hard work of school boards across the state – helped Vermonters avoid about $71 million in forecasted property tax rate increases. Of those total savings, $29 million was a direct result of the Governor’s budget vetoes.

Elimination of the Tax on Social Security Benefits

  • Proposed and passed the elimination of the income tax on Social Security benefits for low and middle-income retirees, benefitting approximately 35,000 Vermonters.

Proposed Elimination of the Tax on Military Retirement Income

  • The Governor’s recommended FY2019 & FY2020 budgets both proposed to phase out the tax on military retirement income in order to help make Vermont more affordable and attractive to retired servicemen and women.

Working Family Taxpayer Protection Act

Changes in federal tax laws at the end of 2017 impacted Vermont's tax system, so while many Vermonters will see lower federal rates due to this reform, these changes meant the State would have collected a net increase of $30 million in income tax, primarily from working families. To prevent this, the Governor proposed and passed a revenue-neutral plan to update our income tax laws, that did the following:

  • Lowered tax rates across the board by 0.2% for all filers;
  • Increased the Vermont Earned Income Tax Credit from 32% of the federal credit to 35% of the federal credit; 
  • Reintroduced personal exemptions at $4,000 each;
  • Created a Vermont-defined income deduction, equal to $6,000 for single filers, $12,000 for joint filers, and $9,000 for heads of household;
  • Introduced a 5% tax credit for charitable contributions (the as-passed bill includes a cap introduced by the Legislature); and
  • Moved to a system more closely tied to Adjusted Gross Income (AGI) to add resiliency and stability to the Vermont tax system;

This legislation, coupled with the exemption of social security benefits, reduced income tax rates and prevented the collection of a net $30 million in higher taxes on Vermonters.

Modernizing the Estate Tax

  • To make Vermont more competitive in retaining and attracting taxpayers,, the FY20 budget adopted the Governor’s proposal to gradually increase the estate tax exemption from $2.75 million to $5 million in order to more closely align us with the exemption amount in surrounding states.

Cutting the Land Gains Tax

  • Drawing on the Governor’s proposal, the FY20 revenue bill virtually eliminates the Land Gains Tax by substantially reducing the properties to which it applies.

Protecting Vulnerable Taxpayers

  • The FY20 revenue bill reinstates a deduction for medical expenses within Vermont’s personal income tax. This will allow taxpayers to deduct any medical expenses above Vermont’s standard deduction and personal exemptions.

Keeping Promises and Paying Down Debt

  • The FY18 and FY19 budgets fully-fund the required investments in our state employees’ and teachers’ pension and other post-employment benefits (OPEB) obligations.
  • The FY19 budget adjustment and FY20 budget further pay down our unfunded liabilities with:
    • $22.2 million to retire an internal loan that is funding retired teachers’ health benefits;
    • $3.3 million to make an additional payment to the retired teachers’ pension plan; and
    • New statutory changes to direct a portion of future General Fund surplus reserves to the state employee’s OPEB trust fund.