The Vermont House of Representatives has given preliminary approval to its second budget of the year, but the latest spending plan looks destined for the same gubernatorial veto the first one got.
The budget impasse between the Republican governor and Democratic lawmakers is now into June. With the fiscal year set to expire on June 30, the prospect of a government shutdown is becoming more real by the day.
So House and Senate lawmakers have offered up a plan: take all the parts of the budget that Gov. Phil Scott and lawmakers agree on — which is all but $34 million of the $5.8 billion — and pass it into law.
House Speaker Mitzi Johnson said that way both sides can negotiate their remaining differences without having to worry about a lapse in government services if they can’t reach agreement by July 1.
“This bill is all about all of the pieces that we agree on,” Johnson said Friday. “We are not asking [the governor] to sign a bill with a tax increase.”
The House gave preliminary approval to that bill on Friday afternoon. It does not, however, seem to have accomplished its intended goal.
“The budget as proposed is effectively the same as the one that the governor's vetoed, in that it still contains a major area of disagreement,” said Jason Gibbs, Scott's chief of staff, on Friday.
That “major area of disagreement” centers on statewide property taxes. The governor wants to use $34 million in one-time money to avoid an increase in statewide property tax rates next year. Lawmakers want to use the money instead to buy down future pension obligations.
The budget passed by House lawmakers Friday doesn’t contemplate property tax rates at all. They say their latest budget plan reserves that fight for a separate bill.
But Gibbs says there’s a still a problem: under existing law, if lawmakers do nothing related to property tax rates between now and July 1, then the rate for businesses and second-homeowners will automatically jump by 5.5 cents.
“And as a result would put [lawmakers] in the position of being able to delay the negotiation on non-residential property tax rates to the point of July 1, when it would automatically increase,” Gibbs said.
If lawmakers want to take the prospect of a government shutdown off the table, then Gibbs said they need to pass a budget that undoes that automatic increase.
So far at least, lawmakers say they’re unwilling to do it, which leaves the two sides no closer to an agreement than they were when the impasse began.