As Budget Surplus Grows, So Does Dispute Between Scott And Legislative Leaders

Jun 12, 2018

Gov. Phil Scott says he'll veto the newly passed state budget unless lawmakers agree not to increase the state's non-residential property tax rate.

Scott says he's giving legislative leaders until Thursday to find a solution that meets his requirements. But House Speaker Mitzi Johnson says she's not giving in to Scott's demands.

If you want an example of the dramatic gulf between Scott and Legislative leaders over the issue of property tax rates, a hastily called meeting on Tuesday of the state's Emergency Board served as a stark reminder.

The Emergency Board consists of the governor and four chairs of the Appropriations and Tax Committees of the House and Senate.

Scott called the meeting to highlight new higher budget surplus numbers that were released last week.

But the four Democratic chairs refused to attend the meeting saying they already knew about the new surplus number — and agreed with it — so there was no need to join the governor. As a result, the Emergency Board meeting schedule for Tuesday was canceled by the governor and a budget briefing with the State Economist Jeffrey Karr was held instead.

At the meeting, Scott discussed his desire to use the surplus money to stabilize the residential and the non-residential statewide property tax rates. Democratic leaders have agreed to a plan that includes no increase in the residential rate. They want to put some additional one-time money into the state's teachers retirement fund.

The clock is ticking: Scott has until Thursday afternoon to sign or veto that budget.

"The likelihood is growing every day that I'll be vetoing that budget,” said Scott Tuesday. “I don't see that I have any other choice in some respects because there is no incentive for anyone to come back to the table if those rates are going to increase by July 1."  

Scott says it would be possible to end the stalemate if lawmakers would agree to use the new budget surplus.

"I believe we can come to an agreement because we have enough cash to settle both initiatives,” said Scott. “We can pay down the teachers' retirement debt more and we can pay down the property tax rates as well. So everyone can win and the bottom line taxpayers win as well."

“I don't see that I have any other choice in some respects because there is no incentive for anyone to come back to the table if those rates are going to increase by July 1." — Gov. Phil Scott

House Speaker Mitzi Johnson says she's holding firm because the House plan is the most fiscally responsible approach.

"For the governor to make these demands, all along the way saying this is exactly what I want the Legislature to pass and this is when I want them to do," Johnson said, "it is completely forgetting that we are co-equal branches of government and we too represent Vermonters."  

Johnson says the governor’s plan artificially increases state spending on education.

"He is taking everybody that depends on state government and using their fear as 'leverage' ... that sounds an awful lot like ... Washington-Trump politics to me." — House Speaker Mitzi Johnson

She says Scott is inappropriately using the threat of a state government shutdown to force the Legislature to give in to his demands.

"He is taking everybody that depends on state government and using their fear as 'leverage,'" said Johnson. "That sounds an awful lot like ... Washington-Trump politics to me, which nobody thought he was capable of and is very disappointing to see."

If Scott vetoes the new state budget later this week, lawmakers will return to the statehouse next week to consider overriding the governor's veto.