Senate Committee Creates Tax Relief Package Without Raising New Taxes

The Senate Finance Committee has signaled that, in a year when revenues are soaring, a package to provide tax relief to working Vermonters and families should not necessitate raising new taxes. That leaves a generous $36 million available for tax cuts to fit within the Senate’s budget. The House created a $50 million Child Tax Credit for families making up to $200,000, providing a refundable tax credit of $1,200 per year for each child in the home under the age of six, and a Social Security Income Exemption increase of $5,000. Committee members discussed the expected child care financing report due to be released prior to the start of the next session and cautioned that a sizable tax cut this year for families that doesn’t impact the cost of child care will likely impact the ability to tackle child care costs next year.

The Senate Finance Committee gave additional consideration to the Governor’s tax relief proposal and are considering a mix of the House and Governor’s proposals in their own tax relief package of around $30 million. The Senate’s relief package includes a scaled back version of the Child Tax Credit, a Manufactured Home Credit, a Student Loan Interest Deduction, an increase to the Child and Dependent Care Credit, and an increase to the Earned Income Tax Credit. The Committee is requesting that the Senate Appropriations Committee appropriate $5.5 million to support child care workers with the remaining funds.