Scott Administration Pans New Legislative Property Tax Compromise

May 26, 2018

On Friday night, Gov. Phil Scott formally vetoed the tax and budget bills. Administration officials say Scott rejected a new compromise proposal because it includes an increase on the non-residential statewide property tax rate and they say Scott will never agree to any plan that raises taxes on Vermonters.

The two positions in this stalemate are pretty well known. The governor wants to use roughly $60 million in one-time money to offset an increase in the statewide property tax rate for education.

Legislative leaders argue using all of the one-time money for this purpose is fiscally irresponsible.

Their original plan used part of the money to lower a proposed increase in the residential statewide property tax rate from 5 cents down to 2 cents. But it did not affect a 5-cent hike in the non-residential rate.

In a new compromise, they've offered to use more of the one-time money to ensure that there will be no increase at all in the residential rate.

"The governor's been clear that no property tax rates e increases are acceptable or affordable to Vermonters at this point." — Tax Commissioner Kaj Samsom

Tax Commissioner Kaj Samsom says the offer is not acceptable.

"No, the governor's been clear that no property tax rate increases are acceptable or affordable to Vermonters at this point,” said Samsom.

Samsom says the increase in the non-residential tax rate will hurt many Vermonters who own businesses or rental properties.

"It's of utmost importance that we think about the affordability of business property owners because businesses employ Vermonters, particularly small business is the life blood of the Vermont economy,” said Samsom. “So that's nothing to be dismissed.”

Lt. Gov. David Zuckerman says he doesn't want to use additional one-time money to break this current impasse but says this new plan is an "acceptable compromise."

"In the spirit of compromise I think it's a reasonable idea to start a conversation,” said Zuckerman. “What's interesting about the spirit of compromise is everybody's got to come to the table."

Zuckerman says it's time for the governor to compromise on his "no new taxes" pledge and he's very disappointed the administration didn't react more favorably to the new plan.

“The governor has said ‘it's my way or the highway, no ifs, ands or buts." — Lt. Gov. David Zuckerman

"Not even an acknowledgement of the Legislature moving beyond where it had wanted to be, nothing of saying you know this is good, we're working towards a middle ground somewhere,” said Zuckerman. “The governor has said ‘it's my way or the highway, no ifs, ands or buts.’"   

Samsom says Scott is willing to compromise on various elements of his proposed five-year plan to make education funding more sustainable.

These include provisions to increase student-to-staff ratios in many parts of the state, changes to the Special Education program, and a proposal to create a statewide health care contract for all school employees.