Vt. lawmakers give in on tax changes

MONTPELIER, Vt. (AP) -- Vermont's lawmakers dealt with death and taxes Monday, all but wrapping up a historic 2013 session.

Legislators settled on a $1.4 billion general fund budget and approved aid-in-dying legislation to stay on track to wrap up their business by late Tuesday.

The bill to allow doctors to prescribe lethal medication to terminally ill patients who request it makes Vermont the first state to give legislative approval to such a measure — Oregon and Washington did so by referendum, while in Montana, a court decision had a similar effect.

Lawmakers also agreed Monday to decriminalize small amounts of marijuana and hashish and allow farmers to grow hemp — which is illegal under federal law — and gave in to Gov. Peter Shumlin's opposition to plans to make the state income tax system more progressive.

"We had ... quite honestly a showdown," Senate President Pro Tem John Campbell told reporters about negotiations between him and House Speaker Shap Smith on one side and Shumlin on the other. But in the end lawmakers decided to give up the fight, he said. "Any longer discussion would have taken another two weeks, and that would have cost Vermonters money."

Campbell joined Smith to say they would continue during the break between legislative sessions to flesh out a tax proposal that Shumlin said had been rushed at the end of the session. The legislative leaders said they expected to return in January ready to reduce tax deductions that mainly benefit wealthy taxpayers, while lowering tax rates across the board.

"We want a proposal that lowers rates for all Vermonters and a fairer and more equitable tax structure," Smith said. With so little time left on the legislative calendar, it was not time to fight with the governor now, he said.

"We think that it's worthwhile all being on the same page, rather than having a fight about something that we should all want to do," Smith said.

Shumlin had been arguing the tax changes were not revenue-neutral, as lawmakers claimed, but would raise millions in new revenues. A top Shumlin aide, Administration Secretary Jeb Spaulding, released an email Monday from an administration tax analyst saying the changes would raise nearly $10 million in new revenue.

The 2013 session was not a complete tax policy victory for Shumlin, lawmakers noted. They fought off his attempt to raise about $17 million for expanded child care subsidies by cutting the earned income tax credit, which mainly benefits low-wage workers.

With a tax fight avoided, the remaining must-pass legislation was the general fund budget for the fiscal year beginning July 1. House and Senate budget negotiators sealed a deal Monday afternoon, which they said would give lawmakers the traditional 24 hours they have to review the document before giving it final passage Tuesday evening.

Missing from the budget was the big boost in child care subsidies sought by Shumlin; less than $2 million went to that purpose. He also did not get as tough a version as his administration had sought to time limits on participation in the state's Reach Up welfare to work program.

On other issues:

— The House concurred with Senate changes and sent to Shumlin's desk a measure to decriminalize possession of up to an ounce of marijuana or up to 5 grams of hashish. The national Marijuana Policy Project said Vermont would become the 17th state to have either decriminalized or, in the cases of Colorado and Washington, legalized possession of small amounts of pot.

— The Senate agreed with a House-passed measure to legalize growing hemp, even though the plant's tiny concentrations of the same active ingredient as in marijuana makes it illegal in the eyes of the federal government. This was despite warnings from Attorney General William Sorrell's office that the state currently lacks the testing equipment to differentiate between hemp and marijuana.