MONTPELIER — Democratic Gubernatorial candidate Peter Galbraith released a plan Tuesday to cover the cost of a college education for Vermont students at state colleges by eliminating nearly $50 million in tax breaks and loopholes.
Galbraith, a former diplomat and state senator from Windham County, revealed his plan outside of the Community College of Vermont Tuesday afternoon, declaring that “higher education should be a right, not a burden for young Vermonters.”
He said the plan would provide four years of free tuition at all of the Vermont State Colleges for all graduates of Vermont high schools who meet the academic requirements for admission. It would also provide free or reduced tuition at the University of Vermont for high school graduates who meet the income criteria to be eligible for Pell Grants.
The total cost of providing free higher education is estimated to be $29 million, Galbraith said. The program would be paid for by eliminating tax breaks and raising the minimum wage, a key plank in Galbraith’s economic agenda.
“Along with raising the minimum wage, this will do more to make Vermont more affordable for those for whom it is currently not affordable,” he said.
Vermonters who borrow money to attend a state college will incur over $40,000 in debt for tuition, Galbraith said. That debt is harming Vermont’s future in a number of ways, he said.
“Debt deters Vermonters from acquiring the education and skills they need for the jobs that our economy requires. It makes it impossible for many young Vermonters to buy a house, and it even effects such basic human decisions as to when or even whether to start a family. College debt is one reason that young Vermonters leave our state for jobs elsewhere,” he said.
Galbraith said raising the minimum wage to $15 per hour will save Vermont up to $18 million a year because of reductions in Earned Income Tax Credits paid out. He also said there will be some savings from public assistance programs that will not longer be required, but he did not include that in his estimated total savings.
The remaining savings would come from changes to the tax code. He said he would achieve the following savings:
— $11.5 million from eliminating the capital gains tax exclusion
— $4 million from eliminating the sales tax exemption for products sold on the internet
— $3.7 million from eliminating a municipal bond exclusion
— $600,000 from eliminating the investment tax credit
— $3 million from eliminating corporate and individual research and development tax credits
— $2 million from eliminating the Vermont Higher Education Investment Plan tax credits
“For the most part, these tax breaks do not accomplish their intended purpose or are very inefficient ways to do so,” Galbraith said.
In addition, Galbraith said converting Vermont Economic Growth Incentive grants into unsecured loans would save an additional $2 million.
Galbraith said the research and development and investment tax credits are in addition to larger federal tax credits and are unnecessary.
“The additional Vermont credit almost certainly rewards Vermonters for investment decisions that they would have made anyhow, but it costs taxpayers $3.6 million,” he said. “The investment tax credit is particularly hard to justify because it goes to — get this — it goes to funding advanced coal technology and gasification. At our time when our state is engaged in a debate over divestment, it makes no sense for us to be subsidizing fossil fuels.”
Galbraith’s college education plan follows the release of a plan by one of his Democratic primary rivals, Sue Minter, a former secretary of the Agency of Transportation. Minter’s plan calls for two years of college education at Vermont State Colleges at an estimated cost of $2 million the first year and $12 million when two classes are enrolled. Minter’s plan would be paid for by a bank franchise tax and subjecting banks to the corporate income tax.
Matt Dunne, a former Windsor County state senator, is also running in the Democratic gubernatorial primary.