Administration officials met with Vermont legislative leaders on Wednesday in an attempt to find a compromise over a vetoed property tax bill that could be overridden when legislators return to Montpelier on Monday.
On June 6th, Republican Governor Phil Scott vetoed H.887, which would set the homestead property tax rate at 13.8 percent. In his veto letter, Scott said “Vermonters cannot afford a double-digit property tax increase” and wants any increase limited to between 4 and 6 percent.
A team of administration officials met with key committee chairs and legislative leaders Wednesday. Following that session Scott’s representatives held a briefing to review their proposal.
Agency of Administration Interim Secretary Sarah Clark says their plan offers options for tax relief through a phased-in approach.
“One of those items is incorporating the school budgets that have passed this this year. That is going to lower budgets by roughly $4 million,” Clark said. “In addition, we are proposing to dedicate any additional general fund surplus between May and June of 2024 to help us buy down the yield. Another option is to remove the one-time property tax credit increase that is currently in the yield bill as passed. The governor is also proposing to utilize the education fund stabilization reserve to offset property taxes, coupled with a payback plan over time. We acknowledge that there is risk in using the reserves in this manner. But there is risk in doing nothing.”
Administration officials detailed additional proposals for short-term cost containment. The governor’s plan also hopes to save about $20 million by scaling back the universal meals program.
House Speaker Democrat Jill Krowinski issued a statement following the meeting criticizing the governor for not attending. She said “his absence undermines the collaborative spirit necessary to address the critical issues facing our state.” Senate President Pro-Tem Democrat/Progressive Phil Baruth also criticized Scott’s absence.
The Governor’s Director of Policy and Legislative Affairs Kendall Smith said legislators knew the governor would not be at the meeting.
“There was never a plan for the governor to be there for the initial discussion,” asserted Smith. “And then, if we make progress, bring him in If there was a, you know, a handshake to be had.”
Governor Scott’s Communications Director Rebecca Kelly adds that legislators had not been clear prior to the meeting whether they would be willing to negotiate.
“I think it’s important to remember they have the supermajority. If they want to override and impose the 13.8% property tax increase, they can do that. They don't have to have this conversation with us,” Kelly said. “So I think the initial objective was trying to see if they're even willing to have this conversation before it made sense to have the governor join. I mean, they could have told us up front we're willing to negotiate. But why should the governor sit in on a meeting for them to say, we're just going to override you. I also think the issue at hand is getting this rate down for Vermonters, not who's at a meeting.”
Krowinski’s statement asserts that the governor “has not provided any feasible alternative plan.” Baruth contends “the ideas presented by his team are among the most fiscally irresponsible he and his Administration have ever proposed.” Tax Commissioner Craig Bolio countered that most of what the administration presented is based on language put forward earlier by the legislature.
“What the Governor’s supporting here is largely the existing 887, with some additions, and then the one subtraction of the property tax credit bump. So the large swath of what the Governor’s supporting here is what's already drafted and what was already passed by the legislature,” noted Bolio. “In addition to that, many of the additions that the governor is supporting here are versions of language that the legislature had put forward this year. The hope was that these were things that have already been talked about. It's not like these were all new ideas that got brought up today. These have been things that we've been talking about all session and hoping to be able to move towards so we can get to a yield bill that everybody could agree to.”
Legislators return to Montpelier to begin a veto session on Monday.
