Gov. Phil Scott announced Tuesday that he will call lawmakers back for a special session beginning next Wednesday, May 23. In a publicly released letter to House Speaker Mitzi Johnson (D-South Hero) and Senate President Pro Tempore Tim Ashe (D/P-Chittenden), the Republican governor wrote that he hopes to reach an agreement to avert a property tax increase by May 25.
The Democrat-led legislature passed budget and tax bills and adjourned on Saturday, anticipating that Scott, who has demanded lawmakers hold down property taxes this year, would veto both pieces of legislation. Rather than schedule a veto session, the legislature left it up to Scott to call them back for a special session. That means the governor gets to pick the date, but lawmakers won’t be limited to voting on bills he vetoed.
Not wasting any time, Scott chose to call lawmakers back to Montpelier before the budget and tax bills have even reached his desk.
The tax bill, which won support from some Republican legislators, would result in an average 2.6 cent increase for residents and a 5.5 cent increase for businesses and second-home owners.
Scott wants lawmakers to use $33 million in one-time funds to eliminate the increase this year. Lawmakers contend that voters approved the school budgets that drive that rate, and buying down the rate this year could lead to a larger increase next year.
Legislators instead opted to use the money to pay down the state’s teacher retirement liability, an investment reflected in the budget bill.
Although the 2018 legislative session ended on a bitter note, Scott, in his letter, asserted that “we are very close to an agreement.” He asked Ashe and Johnson to meet with him this week to pave the way for a deal next week.
The governor laid out a framework for the upcoming negotiations: He wants the meetings to be held in person, and he wants all proposals and counterproposals to be made in writing and released to the public. Scott also requested that lawmakers focus on the must-pass budget and tax bills and refrain from working on other legislation during the special session.
Read the entire letter below:
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Governor Scott would do well to better understand our political system. There is a separation of powers and decision making for a purpose, and one of those purposes is to assure that a strong handed governor who would prefer to rule by personal decree is not given free reign.
Vermont’s state constitution (https://legislature.vermont.gov/statutes/c…) contains the necessary guidance for an impeachment of our state’s Governor; and allowing the state government to shut down over this education spending would be the ultimate in dereliction of duty.
With a large surplus this year there is plenty of room for compromise. As requested by the Governor, school boards have kept their budgets in line. However, there are over 40 million dollars worth of programs unrelated to K-12 education and not part of school board budgets that are now in the Education Fund. This includes, as of last year, a transfer from the General Fund to the Education Fund of over 7 million dollars for the annual Teachers Pension Fund payment.
Using the surplus to cover these legislative mandated programs in the Education Fund and reducing income sensitivity payments ( which now can go to those with incomes up to $147,500 and individual payments as high as $8,000) to make up any remaining difference would be a progressive and fiscally responsible solution to the current standoff. Longer term differences on educational funding and policy could then be part of the fall election campaign.
Paying down obligations such as the teacher’s pension fund is the fiscally prudent use of the budget surplus.
The best use of a surplus is to first cover existing expenses before raising more taxes. I would be run out office in my town if I told the voters we had a large surplus our budget but were raising property taxes to pay off past obligations sooner.
The good news is that there is enough money to both cover the legislative mandated programs that are the major contributor to the hole in the Education Fund and still put millions of the remaining surplus towards helping with past problems of the legislature short changing needed contributions to the Teachers Retirement Fund. Plenty of room, if we save partisan politics for the election season where they belong, for a win-win compromise.