Tuesday, the Vermont House failed to obtain the two-thirds support necessary to override Governor Phil Scott’s budget veto and must now craft a third budget. If it is not completed and approved by July 1st, the state faces a government shutdown.
The Vermont legislature adjourned its regular session on May 12th after passing a $5.8 billion budget. Republican Governor Phil Scott vetoed that fiscal plan and called a special session. The legislature failed to override his veto and began working on a new budget.
In early June a second budget was passed. Democratic leaders called it a compromise that would meet Governor Scott’s pledge not to sign any bill that increases taxes. But the administration said the revised plan included an increase in non-residential property tax rates. Scott vetoed the second budget. On Tuesday, House Speaker Mitzi Johnson announced legislators had failed to obtain the two-thirds vote necessary to override. “Those voting yes 90. Those voting no 51 and you have failed to override the governor’s veto. Member from Jericho.”
“The disagreement is about whether to use 39 million of one-time revenue to artificially hold down non-residential property taxes. If we do that the projection is that next year we’ll need over 49 million to do the exact same thing. That is terrible and foolish fiscal policy.”
Speaker: “Member from Milton.”
Minority Leader Republian Don Turner: “Today I vote no on a proposed property tax increase. I stand with the governor and hard working Vermonters to oppose this unnecessary increase in property taxes.”
Speaker: “Member from Dorset.”
Democrat Linda Joy Sullivan: “I voted today to override the governor’s veto of the budget. I am moved only to avoid a government shutdown.”
The Ethan Allen Institute is a state-level public policy think tank. President Rob Roper says he understands both sides. “I think that the governor and the Republicans who sustained his veto of the budget and the tax bill are correct that we have a surplus of revenues. There’s no reason to be inflicting Vermonters with a tax increase given those circumstances. On the other hand I do have sympathy with the Democrats saying that we do have an opportunity and an obligation to cover the pension debts that are going to be a long-term problem for Vermont. I hope that they can find a compromise that addresses both of the issues and I think that they can.”
The initial budget passed with tri-partisan support. But Republicans have closed ranks to sustain the governor’s vetoes. Middlebury College Professor Emeritus of Political Science Eric Davis says the situation is purely political. “The Republicans don’t want to see the governor lose a key vote and they’re going to stick with him even if it’s inconsistent with their prior position. If he vetoes the budget a third time and it comes very close to the July 1st deadline for a budget I’m not sure whether all 51 Republicans will still vote to sustain the veto.”
Middlebury College Associate Professor of Political Science Bert Johnson says serious negotiations must now occur to avoid a state shutdown on July 1st. “The nature of brinksmanship is that sometimes it gets down to the wire but at that point, when it gets down to the wire, somebody strikes a deal. And I think the Democrats feel like they don’t want to strike a deal early because they feel like they were burned last year in negotiations with the governor. So they want to be seen as holding firm. But I think when it comes down to it both parties will step to the table and something will come out of that.”
But Roper remains nervous about the possibility of a state shutdown. “Vermont really doesn’t have any provisions for a government shutdown. Nobody from the administration to the leadership to the back staff you know amongst the legal counsel at the legislature has been able to really tell me any sort of concrete answer. I don’t think anybody knows. Joint Fiscal Office put out a one page memo that basically says when you’re out of money you’re out of money. And that means you can’t pay for anything. So yeah I would be concerned.”
Democratic Secretary of State Jim Condos sent a letter to Vermont leaders outlining the potential impacts of a government shutdown, saying “failure is not an option.”
Audio from the House session is courtesy of the live webstream provided by Vermont Public Radio.
The Vermont Senate Appropriations, Education and Finance Committees began work on a third budget Wednesday morning.