Budget Veto Looking Inevitable As Talks Sputter Over Teacher Health Benefits

May 17, 2017

Vermont appears to be headed for its first budget veto in nearly a decade.

Negotiations between Republican Gov. Phil Scott and Democratic leaders in the House and Senate have sputtered to a standstill in Montpelier. And with both sides still at an impasse over the issue of health benefits for employees of public schools, a budget veto now seems all but inevitable.

“I’ve made it quite clear that if we aren’t able to get agreement on what I believe needs to be in the bill, that I will not hesitate to veto it,” Scott said Wednesday.

Scott unveiled a plan to reduce education costs by creating a statewide contract for teacher health benefits. Scott says that if teachers pay 20 percent of their health care premiums, and are on the hook for at least $400 in out-of-pocket costs, then Vermont would shrink spending on the K-through-12 school system by $26 million.

Democratic lawmakers have been unwilling to submit to plan that, in their view, undermines the collective bargaining rights of public employees.

House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe have been negotiating behind closed doors with the Scott administration for weeks to try to resolve the dispute. At a Statehouse press conference at noon Wednesday, they updated the press, and their fellow lawmakers, on the progress.

"Outside the Statehouse, there's a constant wind of support for what I'm proposing." — Gov. Phil Scott

“We’re here today because we have reached an impasse,” Johnson said. “We’ve really worked to bring as many ideas and compromises to the table as possible, and we don’t have much of a negotiating partner, and that’s unfortunate.”

Ashe says Scott has put together some effective talking points, and he says the governor has done a good job portraying the Legislature out as the intemperate bargaining partner.

“These are difficult things to communicate to the public, because they keep hearing about the 26 million bucks,” Ashe said.

But Ashe says lawmakers have more than met Scott in the middle. And while the governor’s plan made those savings contingent on the outcome of future health benefits negotiations between the state and teachers, Ashe says the Senate’s plan does a more aggressive job ensuring property tax relief. 

“We put on the table a guarantee of that property tax money back to property tax payers,” Ashe said. “It was not easy for us to do. It would require hard decisions.”

The mostly Democratic lawmakers on hand for the press conference signaled their approval of Ashe and Johnson’s presentation.

But at a press conference of his own, Scott claimed the high ground.

“Outside of this building — there might be this vortex here surrounding this building — but outside the Statehouse, there’s a constant wind of support for what I’m proposing,” Scott told reporters Wednesday.

The Senate plan guaranteed the $26 million in annualized education savings. But it leaves it to districts to decide what parts of the budget that money comes from. And Scott says lower-cost health plans now will lower the trajectory of those costs in the future.

"We've really worked to bring as many ideas and compromises to the table as possible, and we don't have much of a negotiating partner, and that's unfortunate." — House Speaker Mitzi Johnson

Scott says a statewide contract isn’t the only path forward. He says he’d be fine keeping benefit negotiations at the local level, so long as lawmakers impose a legislative mandate on what those plans look like.

Johnson says it’s become clear to her that Scott is less interested in tax relief than in weakening labor unions.

“I think this wasn’t ever at its heart about saving the taxpayers’ money, it was about undermining those local conversations and working Vermonters,” Johnson said.

Talks might have ended for now — Ashe and Johnson say the only path to resolution at this point involves Scott coming to them with an offer — but they will resume in the near future, when the two sides find themselves back in Montpelier in June for what appears to be an unavoidable veto session.

With 53 Republicans in the House, along with some independents and even Democrats who back the governor’s plan, the House lacks the votes to override the governor’s veto.

That means if Vermont is going to have a budget in place before the fiscal year begins on July 1, then Ashe, Johnson and Scott are ultimately going to have to find their way to a compromise that has thus far eluded them.

The House and Senate have yet to land on a consensus plan for education savings. Ashe and Johnson say they hope to hammer out a compromise between the bodies in short order, and that they could adjourn for the session as early as Thursday.