Obama giveth and the state taketh away," someone commented last week.

The drum roll of intended tax increases has begun to emerge from House Committees onto the House floor. A handout on a proposed income tax surcharge showed the impact after including the new federal tax reduction.

In effect, for many taxpayers, much or all of the stimulus money now showing up in their paychecks - intended to help families and get more money into the economy - will be taken back by the state.

Two weeks ago, I voted against the five cent gas tax increase. This was a close call, given that our urgent highway needs would receive a more equal share among users, including out-ofstate users, through a tax on gas rather than through motor vehicle fee increases.

However, there is a question as to whether we can actually make use of all the proposed state bonding on top of the federal stimulus funds coming for transportation.

The larger problem was the expectation that we vote on one tax increase, in isolation, without yet hearing what other ones are also in the offing.

For now, the Senate has rejected the gas tax based upon the federal funds.

In the meantime, the House was presented with the overall state budget. It does not reduce state spending to match our sharp decline in current revenues, nor did I expect it could fully close the gap between essential funding and actual revenue. But instead, according to our Joint Fiscal Office, it increases overall spending for next year by 6.7 percent - from $1.232 billion to $1.315 billion.

The budget also arrived with two huge, empty holes: $14 million in undefined state employee cuts, and $24 million in undefined new revenues.

It filled another $183 million in holes with federal stimulus money that will disappear in two years, leaving us with an even more dire shortfall. Even with the stimulus money and new taxes, the 2011 budget projects a $79 million deficit. The 2012 budget projects a $173 million deficit.

I think it was irresponsible to pass a budget without defining where the funding will come from, and without considering more than a single year's outlook.

I voted no, but it passed easily under the Democratic supermajority, and is now under review in the Senate.

The very afternoon the budget passed the House, the new tax proposals were announced.

Also on our House calendar is the concurrence with the Senate's proposed amendments to the budget adjustment bill passed by the House last month - the bill that realigns funds for the current year based on actual categories of funding.

That bill has now been deferred, because just in the time since the Senate passed it, new estimates for the current fiscal year show another $3 million drop in tax revenue. It can't pass if it doesn't balance, so the scramble now behind the scenes is to figure out how to get it into alignment.

The new income tax surcharge proposal is supposed to sunset after 2011, right when the federal stimulus funds end - an amazing presumption of a major economic rebound at that time. Either that, or draconian cuts and big tax increases will be passed off to a different legislature.

One aspect is particularly troubling: the plan includes a back tax on income since January of 2009. The tax year goes by the calendar year (January 2009 to December 2009) and the budget goes by fiscal year (July 2009 to June 2010).

Since the tax would begin in January 2009, and the current tax rate will have been used for existing paycheck deductions through June, there is only one way to gain that revenue "retroactively." It means that any tax rate increase will actually be double the rate that is being stated publically, as applied in the second half of this year.

One of my strongest values is transparency: whatever we do as a legislature, whether over objections or not, we need to be public and honest about what we pass into law, so I intend to raise this vigorously in floor debate.

Four years ago the legislature secretly took $15 million away from property taxpayers through a shift in the way the tax year was counted, and no one realized it until the next year.

Because rates increase as income increases and taxes also depend on family size, it isn't possible to give a specific break down of the impact here. As with the underlying tax rate, the surcharge increases as income increases.

The surcharge would bring the effective rate for those with the lowest income from 3.6 to 3.7 percent in the second half of this year; from 7.2 to 7.4 for the $32,000 to $77,000 income bracket; from 8.5 to 8.9 for those with a taxable income of $77,000 to $160,000; from 9 to 9.5 percent for those in the $160,000 to $350,000 tax bracket; and from 9.5 to 10.1 percent for those making above $350,000.

For perspective, as listed in the most recent available tax year (2006), the 70 percent of Vermonters who earned under $35,000 in taxable income paid 15 percent of the state's total income tax revenue; the 21 percent earning $35,000 to $75,000 paid 26 percent of the revenue, the seven percent of Vermonters with $75,000 to $150,000 in taxable income paid 21 percent, and those who made more than $150,000 - 2.3 percent of taxpayers - paid 38 percent of the total income tax revenue. (In 2006, Vermont had 313 taxpayers - one tenth of a percent - making $1 million or more, and they paid 13 percent of all our income tax revenue.)

Among most of the lower tax brackets, however, no one will see an actual overall tax increase from last year. It will be hidden by the offset from the federal tax cuts.

Another proposed change would be for "land rich, income poor" Vermonters who pay their property tax under the income sensitivity program. Rebates on high property taxes would be capped at $6,000 instead of the current $8,000.

Civil Marriage

I was pleased that my amendment, adding the word "civil" to all Vermont law that uses the word marriage, was adopted. Creating the status of civil marriage helps to make it clear that this bill is about equal treatment by the state - not about a change in the definition of marriage as created through the ages of history in Biblical and religious contexts.

That definition of marriage remains the clear prerogative of each religious and faith tradition.

A majority of Republicans opposed this bill, and it seems therefore that the expectation was that I would also oppose it. As I explained in advance several weeks ago, however, I saw this as an issue of equality under state law.

In a representative democracy, my job is to act in the best interests of the people of the state, applied consistent with the values and positions that I presented to voters in the election process. I believe I did that, and I remain more than willing to discuss this with those who feel otherwise.

A "pure democracy" - not what we have - would mean direct voting by the people on government decisions. To the extent that the "wishes of the people" were expressed in this district, about half of those responding to the "Doyle poll" opposed "same sex marriage." Among the hundred or so who contacted me directly, support and opposition was about equally divided.

For the veto override vote, Governor Douglas made it clear that he did not consider it a political issue, and he did not ask for support for his position. Thus it was not a vote about supporting or not supporting the governor.

The single vote margin on the override was the result of three Democrats who changed from opposing to supporting the bill. Sadly, one of them said he changed his vote because it was the only way of getting his party to work with him on other issues important to him. In effect, he felt he would be blacklisted if he did not comply with party leadership demands.

The day I became a Republican candidate I was promised I would never have my arm twisted to "vote the party line." That commitment has never been broken.

I did not vote for the bill without some concerns, and I expressed them on the record. There were snide comments made about the Catholic faith on the floor by one person, and I know there are fears that the law will create an environment where those who have different views will end up as victims of discrimination.

I said: "We did not necessarily take this vote with a common or clear understanding of its intent or implications. More time and a more inclusive process could have made a difference and may have brought about a more unified outcome.

"To me, this is not about changing the institution of marriage: the longstanding cultural beliefs about the influence of God as we individually understand it in our lives. It is about the state role in fully equal treatment of those who differ, and in acceptance of that difference.

"Tolerance, however, is a twoway street, and discrimination takes many forms.

"It remains socially acceptable to mock religious faith. I felt the sting of that mockery on the floor last week; the anti-Catholicism that remains in a state where only a generation ago, hooded men burned a cross on a hilltop in Northfield.

"If this law fosters intolerance towards those with different, but deeply held beliefs, then I will have voted on the wrong side of the pages of the history of our civilization."

Please let me know your thoughts as well, on these and any other topics. You can always email at

counterp@tds.net or leave a phone message at 485-6431. This and past updates are also now accessible on my blog, http://annedonahue.blogspot.co m.