Legislature hits home stretch with taxes, school districts and other issues unresolved

Vermont lawmakers head into what are expected to be the final two weeks of their 2015 session with debates still unresolved on taxes, water quality, education, vaccines and other issues.

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House Speaker Shap Smith said Monday he expects the Legislature to complete its work for the year by May 15 or 16.

And Smith, a Morristown Democrat, said he was not too troubled by a curveball thrown by Gov. Peter Shumlin last week. Shumlin, a Democrat, told lawmakers he wanted another $8 million in cuts to avoid some of the tax increases lawmakers had been considering.

"At the end of the session, governors always disagree with what the Legislature does," Smith said.

There are plenty disagreements still to be resolved between the House and Senate, too. Among the issues still in play:

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SCHOOL GOVERNANCE

Both the House and Senate are pushing small school districts to merge to cut costs — eventually mandating them to do so, but the Senate's process would unfold more slowly. The Senate also disagrees with a House effort to put new caps on spending by local school districts while the consolidation process goes ahead.

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INCOME TAXES

The House is calling for capping itemized deductions at $15,500 for an individual taxpayer, $31,000 for a couple, leaving it up to taxpayers to claim deductions on mortgage interest, charitable deductions or other eligible categories. The Senate is a bit more directive, capping the mortgage interest deduction at $12,000 and leaving charitable deductions alone if the money is going for in-state purposes.

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CONSUMPTION TAXES

The House is calling for ending the exemption from Vermont's 6 percent sales tax for soda and candy. The Senate decided to keep the exemption for candy after concerns were raised about how to define it. An item containing flour is not candy under existing law, so a Kit Kat bar, which contains flour, would not be taxed, under the House plan.

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WATER QUALITY

Both the House and Senate are keen to make significant progress on cleaning up the state's waters, especially Lake Champlain, which is bringing a threat of more expensive requirements issued by the Environmental Protection Agency if the state doesn't act. But there are key differences on how to pay for the work. The House would raise some of the money through a surcharge on the state's property transfer tax, which is imposed when properties change hands. Senate Finance Committee Chairman Tim Ashe said he'd rather see a per-parcel fee more broadly imposed.

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CHILDHOOD VACCINATIONS

In a late-session move, the Senate passed a bill to eliminate Vermont's philosophical exemption for parents who don't want to get their kids fully vaccinated. The Senate passed a similar bill three years ago, but the House did not follow suit. Smith, who is married to a physician, said he supports ending the exemption. But it's far from clear there's time for the bill to move from its first scheduled hearing Tuesday in the House Health Care Committee to a vote by the full House before adjournment for the year. If not, it could be held over to the second year of the legislative term in 2016.