Does Republican gubernatorial candidate Randy Brock want to eliminate income sensitivity in the statewide property tax?
Gov. Peter Shumlin and the Democratic Party would certainly like you to think so. During Wednesday's gubernatorial debate on WPTZ, Shumlin said that Brock recently told Vermont Public Radio that he wanted to end the program that lets taxpayers who earn less than $87,000 a year pay property taxes based on their income, rather than their property wealth.
He said Brock's plan would "raise property taxes" on families earning $30,000 to $50,000 a year.
Then Shumlin looked dead into the camera and uttered the sharpest line of the night: "All I can say to Vermonters is, watch out. If you're a middle-class Vermonter, what you just heard is that Randy is willing to reduce income sensitivity on property taxes — the one thing that's making property taxes affordable ..."
At which point Brock interjected, "Now, Governor, that's not what I said at all. I said that we should review our entire tax code so that things that look like income taxes ought to be called income taxes."
"Well, now you sound like Mitt Romney," Shumlin shot back. "Specifically, how you gonna do that?"
The next morning, Dems doubled down with a press release titled "Brock Denies His Own Statements During Gubernatorial Debate." The release included a link to an October 1 VPR story that Shumlin cited in the debate as the source of his "Brock wants to kill income sensitivity" claim.
In this case, what the story reported and what Brock claims his position is are two different things.
In the October 1 VPR story, reporter Bob Kinzel interviewed Brock about his newly released economic development plan. Kinzel wrote:
What Brock is suggesting is a top to bottom review of the operations of state government because he says there are a number of programs that the state can no longer afford to operate.
"That means I want to make the tough decisions as to what's the most important thing we do," said Brock. "What's the next most important thing we do. Those go at the top of [the] list and continue down the list until we come to the things that are the least important to do."
Brock says it would be inappropriate to identify any programs before the overall review has taken place.
But he did target a program known as "income sensitivity" that lowers property tax burdens for households that have incomes lower than roughly $85,000.
"It's now morphed into what is really a middle class tax entitlement that often is apparently abused by folks who have substantial assets but who have relatively low income based on the way that they have those assets invested."
In the debate — and in a subsequent interview on Friday — Brock, a Franklin County state senator, stood by those remarks. Except the part about "targeting" the income-sensitivity program. Notably, Brock did not say that Kinzel misquoted him. Asked if he told Kinzel he would "target" income sensitivity, Brock said, "Income sensivitiy is not a target. Income sensitivity, though, is one of the things on the list that I think we ought to look at, because my question is whether or not it's really working the way it was originally intended."
Asked whether he would do away with income sensitivity as part of his tax overhaul plan, Brock responded, "Not necessarily. But I think what we need to do is we need to look at how we can make it more transparent. You could eliminate income sensitivity if you moved the effectiveness of that over to the income tax. Is that a great idea? I'm not sure. That's the whole point of doing the analysis that you need to do, the same thing that we did with the income tax and the sales tax with the Blue Ribbon Commission."
Tying tax payments to an individual's ability to pay "makes sense to me," Brock said Friday, but the question is whether the program is "fair and transparent." Brock said anecdotal evidence suggests that there are millionaires who are receiving "income-sensitivity payments" because their wealth is in assets, rather than wages or salary.
That's a loophole that Shumlin himself has tried to close. As Brock pointed out Friday, he and Shumlin, then the Senate president pro tem, cosponsored a so-called "millionaire's amendment" in the Senate that said anyone with a net worth of at least $1 million — excluding their personal residence — would not be eligible for income sensitivity payments. The amendment passed the Senate, but did not survive a House-Senate conference committee.
So, did Brock say he'd eliminate income sensitivity in the property tax? The VPR story sure makes it sound like he did, but now he's saying it's only one of several options for overhauling Vermont's tax code. He's not saying he'd do it, but he sure isn't taking it off the table, either.
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