The subject of today’s exercise is money – yours and theirs.

‘You,’ in this context, is the Vermont citizen taxpayer. ‘They’ are the six people with ambition to lead the government of said citizen-taxpayers, all of whom have recently released their 2009 federal income tax returns.

Let’s deal with “them” first, because it’s simpler and quicker, starting with this indisputable and somewhat surprising piece of information: Not one of them is filthy rich.

Peter Shumlin, the Senate President from Putney (and a Democrat, as are they all except Lt. Gov. Brian Dubie, so we won’t have to keep specifying party labels here) comes closest.

Shumlin reported $974,732 in total income last year, most of it – more than $617,000 – from rents and royalties, and about $286,000 from wages and salary. He paid $271,870, or about 27 percent of his total income, in federal income taxes.

He sure wasn’t cheating on his taxes. Many taxpayers at that income level pay far less of it to the feds.

Shumlin is in Vermont’s top income bracket, but he’s small potatoes compared with – just to take one example out of the blue – Barack Obama, who cleared more than 5 million clams last year, mostly royalties from the books he’s written.

Not to mention compared with Sen. John McCain, who couldn’t remember exactly how many houses he owned when he ran against Obama in 2008. By national political standards, Shumlin is a piker. Even in Vermont, that kind of income doesn’t quite meet the “filthy rich” level, unless someone earns it for so many years that he acquires huge amounts of property and other capital.

Shumlin, a businessman who is, among other things, a director at Putney Student Travel, which arranges foreign trips for students, seems to be in the early stages of that process. But it would take him a while to get to the filthy rich level, and if he gets elected, being governor might prove too great a distraction.

The rest of the field doesn’t even qualify as rich, though all would seem to be comfortably affluent. The incomes range from a low of $95,969 (Sen. Susan Bartlett) to $198,435 (former Sen. Matt Dunne). In the middle were Dubie ($165,395); Sen. Doug Racine ($136,192) and Secretary of State Deb Markowitz ($122,614).

The lesson here appears to be that one need not be a multi-millionaire to get elected governor of Vermont. While it’s probably not true that anyone can be governor – all the contenders earn substantially more than the typical Vermonter – a whole lot of people can reasonably aspire to the state’s top job.

Taken together, the only outstanding revelation in the tax disclosures is that…there is no outstanding revelation in the tax disclosures. Judged by their tax returns at least, the gubernatorial field is a bunch of moderately successful, law-abiding, respectable folks.

Oh, and maybe bland.

In fact, the returns are so unexciting that there is no point in going into detail about them here. Whoever is interested can get them on line, though not via the candidate web sites. Try the web sites of the major newspapers or TV stations.

Now to your money, or at least the part of it the state is going to tax. There were a couple of interesting if tentative developments at the Statehouse yesterday.

One is that the Senate seems to be intent on raising the statewide property tax two cents higher than the House voted for or the Douglas Administration proposed.

It’s right there in a document the Senate Appropriations Committee prepared to explain the differences between the two houses over H. 783. The Senate would set the education property tax rates for Fiscal Year 2011 at $1.37 for nonresidential property, and $0.88 for “homestead property,” in both cases two cents higher than the House version.

This displeased some House members, especially Rep. Ann Manwaring of Wilmington. She said the Senate was supporting an Administration proposal to shift $6.89 million in federal funding for Special Education Revenue into the General Fund, thereby shorting the Education Fund, where these monies had gone in the past.

Actually, she didn’t just say this; she had a document to back it up, a list of proposals from Senate Appropriations.

But the document had the word “Draft,” penciled on top in big capital letters, and Shumlin warned, “at this stage in the session, don’t take seriously anything the House says about the Senate, or the Senate about the House.”

Perhaps some bargaining is taking place.

As it seems to be on another issues, raising taxes on people who don’t earn a lot of money and therefore qualify for the “income sensitivity” rebate on the statewide school property tax even though they might live in a million-dollar home and have other assets.

Stories about such incidents, including this one in the Burlington Free Press have annoyed if not enraged some folks, many of whom would agree with Senate Finance Chair Ann Cummings, who said “they should probably sell (their expensive house) and pay taxes on a smaller house.”

The annoyance is understandable, but in some ways this seems like a fake issue. As Sen. Mark MacDonald of Williamstown noted, the statewide property tax isn’t really a property tax. It was designed to tax most people on the basis of their income, not on the value of their property. Only the wealthiest, he said, are really taxed primarily on the value of their property.

This is not entirely true. A $70,000 household whose statewide property tax bill was only about $1,700 would be taxed on the value of its property, because the bill is less than 2.5 percent of its income, the current maximum.

But this is probably rare. Like other Americans, most Vermonters no doubt buy as much house as they can afford, if not more, so most households earning less than $90,000 (and that’s a large majority of households) have their tax capped on the basis of their income.

The proposed changes, MacDonald said, would “create a tax on these people that never existed,” forcing them to pay on the basis of the value of their property rather than their moderate incomes.

The beneficiaries, he said, would not be modest-income people in more modest houses, whose tax would remain capped according to their income, but the very wealthy, most of whom pay no more than half a percent of their income in the statewide school tax.

But Cummings said the change might bring in as much as $10 million. Considering the budget crunch, lawmakers are unlikely to resist some formula for raising taxes on the opulently housed but moderately paid.

SCANDAL SWEEPS VERMONT

TOP OFFICIAL DEFIES THE LAW

SNEAKY POLITICS SUSPECTED

OK, so it’s hardly Blagojevichian in scope or power. But we do have, right here in squeaky-clean Vermont, a senior state official who has…well, broken the law

With malice aforethought? Well, with forethought,  meaning he knew what he was doing. The malice part is debatable.

So rare is such behavior here that our major metropolitan dailies seemed not to recognize it. They handled it as if it were a policy dispute.

It is, and one in which the alleged perpetrator could have the stronger argument. But it’s more than that. It’s a political ploy, and so far, it’s working.

The “crime” is part of an intertwined legal-political-fiscal muddle too convoluted to explain-or absorb-in one sitting. Today, let’s just deal with the basics and the politics. The policy and the money parts can wait.

The alleged perp is Tax Commissioner Tom Pelham, who has no known priors. As required by law, on December 1, pelham wrote to the leaders of the Legislature reporting on how much money public schools are likely to spend next year, and how much the statewide school property tax is expected to raise for the Education Fund. What he concluded was that “the Education Fund in fiscal 2010 at current tax rates will generate an operating surplus of $20.5 million.”

Translating into the English, this means the statewide property tax (along with money from other sources that goes into the Education Fund) is going to raise more than the schools are planning to spend.

In that case, according to law (Title 32, Chapter 135, Section 5402b), the Tax Commissioner “shall recommend…a reduction… in the statewide education tax rates.”

He didn’t.

“Given the extraordinary fiscal choices before us, a recommendation from me regarding 2010 tax rates may be extraneous or even harmful to the flexibility you and the Governor need to craft an overall fiscal course for the state,” Pelham explained in his letter.

And in an interview, he said, “it’s worth leaving the issue of the tax rate ambiguous because there is no certainty in these tumultuous fiscal waters.”

Could be. But put this in context. Pelham is the appointee and  ally of Gov. Jim Douglas, especially when it comes to cutting property taxes. And here he is refusing to recommend a cut in property taxes even where the law requires him to recommend a cut in property taxes.

Granted it’s only a recommendation. Pelham has no power to set the tax rate. But just imagine what Republicans would say if a Democrat passed up the chance to propose lower property taxes.

No, don’t bother. No need to imagine. Go back almost four years, to February, 2005. Then as now the Education Fund was projected to be in surplus for the coming year. Douglas wanted to cut the tax rate by more than enough to bring it into balance. The Democrats said no, inspiring then Republican State Chairman Jim Barnett to issue a statement accusing the Democrats of trying to “increase property taxes.”

So are Democrats now taking similar advantage of this inconsistency on the part of the Douglas Administration?

Apparently not.

“Because these are such difficult financial times, (Pelham) doesn’t want to make promises to the schools that he may not be able to keep,” said Senate Finance Committee Chairman Ann E. Cummings of Montpelier. Agreeing with Pelham that this is a “different year,” she declined to take political advantage of Pelham’s letter.

“We’re going to make an effort to do this in a bipartisan manner, which we can’t do if we start out throwing partisan darts at the governor,” she said.

We have here three possibilities: (1) Vermont Democrats (at least as compared to Vermont Republicans) are too responsible about governing to take cheap shots; (2) Vermont Democrats  (at least as compared to Vermont Republicans) are wimps with no taste for combat; (3) Both.

Just because the Democrats aren’t complaining doesn’t mean nobody is. In a joint statement, Vermont League of Cities and Towns and the School Boards Association called on Pelham to propose a tax rate based on the new numbers, a move they say could save taxpayers $18 million next year.

Without such a recommendation, said John Nelson of the School Boards Association, local school districts won’t be able to present their proposed tax rates to voters at least 30 days before town meeting day, as the law requires.

More strangeness. Just as Pelham could be expected to propose a low property tax rate, the school boards might like the increased revenue from the higher rate. So-you’d think-would the teachers union, the Vermont National education Association. But it attacked Pelham, too.

Less strange when we add a little more context, specifically that the Douglas Administration has some thoughts of filching from the Education Fund surplus to repair roads and bridges. Transportation Secretary David Dill came right out and said so.

That way the governor and his minions-with, quite possibly, the cooperation of the Democratic-controlled Legislature-can effectively raise taxes (certainly by Jim Bartlett’s definition), and still say to the voters, ‘What? Raise taxes? We din’t raise no stinkin’ taxes.’

If you think this is convoluted, you ain’t seen nothin’ yet. Because neither Douglas nor Pelham tried very hard last week to hide the rest of their political agenda here. They might not want to cut the school property tax rate just yet.  But they want to persuade, cajole, or embarrass the schools into spending less.

After all, they say, if just about every other government agency has to cut back, why shouldn’t the schools?

A valid question, though as with all comparisons, the appropriateness  of this one is open to debate.

To be explored on another occasion, “maybe not tomorrow,” in the immortal words of Richard Blaine, “but soon.”—Jon Margolis