The Vermont House on Tuesday gave preliminary approval to a measure that would double the tax on heating fuel to boost funding for low-income home weatherization.
But before the legislation was advanced by a vote of 81-60, it faced resistance from lawmakers with concerns that hiking the tax would disproportionately burden Vermonters with lower incomes. House leadership also used parliamentary procedures to dodge a vote on an alternative proposal with a more progressive tax.
Fiscal analysts project that the legislation, which would hike the tax on heating oil, propane, kerosene and dyed diesel fuel by 2 to 4 cents per gallon, will raise an estimated $4.6 million in additional revenue for low-income weatherization.
Expanding funding for the state’s weatherization program, which helps Vermonters modify their homes to optimize energy efficiency, in turn reducing carbon emissions, has become a major priority among Democrats this session.
Rep. Jim Masland, D-Thetford, who sponsored the fuel tax increase, told House lawmakers that the cost of the tax hike to an average household would be about $15 per year.
The financial benefits from a weatherized household, however, can be great, he said: an average of 30 percent less fuel consumption, and savings as high as $500 per year on energy costs.
“If we’re serious about helping low-income people with weatherization … this is it,” he told the caucus of House Democrats on Tuesday morning.
But many House members — enough to uphold a veto from Gov. Phil Scott — are concerned that doubling the fuel tax will be a regressive move, placing an undue burden on low-income Vermonters.
Rep. Heidi Scheuermann, R-Stowe, said low-income renters will likely bare the brunt of the new costs from landlords who will pass them on to tenants.
“Some people will certainly take advantage of this but they will generally be homeowners, low- and middle-income homeowners,” Scheuermann said “But it will be paid in large part by low-income renters.”
Rep. Topper McFaun, R-Barre Town, said the bill was paradoxical.
“We’re taxing a commodity and the cost of that is being passed on to the very people that we’re trying to help,” he said.
During a caucus meeting on Tuesday, some Republicans called the proposal a “carbon tax,” because it taxes fossil fuels.
Democrats, who have said they don’t plan on advancing a carbon tax measure this session, rejected that claim, arguing that carbon taxes are increased levies on gas meant to encourage drivers to purchase less.
“What people thought of as the carbon tax didn’t reinvest a lot of money in the things that would help people adjust to a more severe climate or reduce our carbon footprint, it just tried to steer people away from a behavior,” House Speaker Mitzi Johnson said Tuesday. “This is an existing program, we’ve heard year after year after year that they could use more money.”
Democrats noted that the current waiting lists for low-income Vermonters seeking to weatherize their homes ranges from two to four years.
People who may feel the pinch from the new tax are going to be the ones who see the benefits of the funding, they say.
“Unlike the gas tax and unlike the sales tax, this revenue goes entirely to low-income families,” said Rep. Janet Ancel, D-Calais, who chairs the House Ways and Means Committee.
Some who supported raising additional money for weatherization, but were concerned about doubling the fuel tax, wanted to consider raising the income tax on the wealthiest Vermonters to raise the money.
Rep. Cynthia Browning, D-Arlington, put a proposal on the table that would raise the top two income tax brackets to generate about $4.5 million in new revenue for weatherization.
“If we want to do a good thing … why do we do it in a regressive way?” Browning asked on the House floor, introducing her amendment.
But Democrats moved to split Browning’s amendment into two sections: one including provisions that would raise income tax rates, and another that would direct new income tax revenue to the weatherization fund.
By separating the proposal in two, House leadership was able to withdraw the amendment — claiming the pieces were not germane — and avoid a vote on it. They argued that the two parts, individually, weren’t relevant to the weatherization proposal at hand.
Browning accused Democratic leadership of using “parliamentary maneuvers” to avoid a vote that would have revealed that many in the caucus would support her proposal over doubling the fuel tax.
Rep. Robin Chesnut-Tangerman, P-Middletown Springs, said Tuesday morning that he was also drafting an amendment that would raise additional revenue for weatherization by raising the income tax rate on top bracket earners.
Chesnut-Tangerman said he planned to introduce his amendment before the bill heads to a final vote in the House on Wednesday.