SUBJECT: Governor Vetoes H.520 -- Will Implement Bulk of the Bill Administratively -- Contemplates fuel efficiency program that does not require a tax or new bureaucracy

Montpelier, Vt. – Governor Jim Douglas this evening signed and released a message to the Legislature outlining his reasons for vetoing H.520 and some of the steps his administration intends to take to promote renewable energy and fuel efficiency.

Governor Douglas, who announced he would implement administratively a bulk of the bills provisions, said the Affordability Agenda and his Administration’s focus on fostering a favorable economic environment that embraces innovation and job creation is central to securing our economic future. A major component of this bill—the tax proposal—is entirely inconsistent with these objectives, he said.

“It’s is truly regrettable that H.520 was poisoned by an ill-defined bureaucracy and an unnecessary tax that would undermine our economic security,” the Governor said. “H.520 as it passed the House was a good bill—a positive step forward for Vermont’s energy future—and a bill that I would have signed into law. Unfortunately, despite my frequently voiced concerns, both public and private, an unnecessary and shortsighted tax was added to the bill. That tax is not in the best interest of Vermonters or the long-term economic and environmental security of our state.”

The Governor also said he had to reject the bill because it creates an entirely new bureaucracy without sufficient deliberation or planning. “Before rushing into the creation of a massive new bureaucratic entity—that might itself be inefficient and wasteful—analysis is necessary to determine its structure, costs and benefits,” he said. “Asking Vermont taxpayers to expend what could be an additional $15 million a year on an unknown and hastily planned bureaucracy is not sensible public policy.”

The Governor was also concerned about the negative reaction of financial credit rating agencies that the arbitrary tax would trigger. “The new and unanticipated predatory tax on a single company sends a chilling message not only to Vermont businesses but any company that might be interested in locating or even doing business here,” Douglas said. “Business people are smart, they expect that government policies will change in a macro sense over time but they cannot tolerate the unpredictability of a legislative body selecting an individual business, or even an entire industry cluster, and assessing a punitive tax against them. Business leaders cannot take a risk with a government partner they cannot trust, Wall Street cannot either.”

Nevertheless, Governor Douglas—who has suggested he might propose a fuel efficiency program that does not require a tax or a new bureaucracy—said opportunities remain for the Legislature to join him in advancing the conservation and renewable energy initiatives outlined in the bill, as well as others.

“There will be an opportunity for the Legislature to pursue improved fuel efficiency without creating a poorly contemplated, cumbersome bureaucracy funded by an arbitrary tax. There is a better way to achieve this shared goal and I am committed to finding it,” he said.

“While we are already a national leader in energy conservation and efficiency and our emissions are a tiny fraction of those emitted by other states, we will continue to do more to combat climate change. That’s the Vermont Way.”

The bill and the Governor’s message will be delivered to the Legislature first thing tomorrow morning.

###