As part of a broader package to raise $35 million in tax revenue, the Vermont House Ways and Means committee approved a plan to cap itemized deductions at 2.5 times the standard deduction by an 8-3 vote. This package includes charitable deductions.
As reported by Common Good Vermont, while charitable deductions are estimated to generate $5 million in additional tax revenue, experience in other states show that this will cost Vermont nonprofits millions in charitable giving. The measure is expected to pass the House shortly and the Senate Finance Committee will take up the issue this week.
The Vermont Foodbank is one of many nonprofit organizations that have urged the Senate Finance Committee to reject the proposed cap for itemized deductions under the Vermont tax code.
The Foodbank’s reason is simple: 153,000 of our Vermont neighbors who rely on the Vermont Foodbank and our network of 225 food shelves and meal sites each year cannot afford even the possibility of a decrease in charitable donations.
Each year, one in four Vermont citizens receives food aid that comes through the Vermont Foodbank. Seventy percent of the funds that keep our shelves stocked come from charitable donations.
The Foodbank has already seen a decrease in donations this year that, if not made up, will drastically reduce the amount of fresh produce distributed to vulnerable children, seniors and families by 400,000 pounds. That’s 1.6 million servings of fruit and vegetables. One of the only other sources of food aid many of these families receive comes from SNAP, known in Vermont as 3SquaresVT, and those benefits were cut twice last year and are being targeted for further cuts by congress right now.
We all acknowledge that difficult decisions must be made in a time frame that doesn’t always allow for lengthy deliberations. However, the unintended consequences of the proposed cap on itemized deductions will lead to results that could dwarf this year’s budget dilemma—thousands of Vermonters, including 34,000 children, could go without the critical resources that Vermont’s nonprofit community provides if the Senate Finance Committee doesn’t reject this proposal.
Click here to learn more about the discussion, including supporting documents and talking points for getting in touch with our legislators.