On Thursday, the Vermont Senate passed the second budget bill of the year, despite a likely veto from Republican Governor Phil Scott.
The legislature and administration in Vermont have been arguing over how to use $34.5 million in one-time funds from unexpected tax revenue and a settlement with the tobacco industry. Governor Phil Scott wants to hold property tax rates at last year's level. Democratic leaders say the extra money should fund teacher pension obligations, which they say would save the state $100 million in avoided interest. In May, the legislature passed a budget and adjourned its regular session. The governor vetoed the spending plan and called a special session.
Facing a July 1st budget deadline, the Vermont House Tuesday passed what Democrats called a compromise budget intended to keep state government open while debate continues over property tax rates. The Senate then suspended its rules Thursday and voted 22 to 3 to pass the budget. During her review of the bill, Senate Appropriations Committee Chair Jane Kitchel emphasized that the focus is to keep government functioning. “The implications of not having a budget July 1st are very very significant and very serious. Under the Constitution there’s no differentiation between essential non-essential. No money can be spent. Without a budget we have no ability to spend. So the implications and the need for a budget are extremely important.”
The governor has threatened to veto this second version of the budget because it would increase the non-residential property tax rate. Republican Senator Randy Brock introduced an amendment to keep non-residential property tax rates at the previous year's level. “The budget that we passed yesterday it included a provision that took the residential tax rate and reverted it to last year. That’s all well and good. It was silent on the non-residential rate. What that means is it would be a 5.5 percent increase in taxes. So essentially what we did yesterday when supposedly trying to create a standstill for further negotiation what we actually did is we increased non-residential taxes by 5.5 cents. That was not the intent. And that’s what I objected to.”
Brock’s amendment failed.
Vermont Digger Political Columnist Jon Margolis wrote that the showdown between the legislature and governor is “…an old fashioned duel…” “There’s very little money difference . And in fact there’s so much extra money that the state has this year a lot of so called one time money, revenue that’s not likely to come again next year that if they really wanted to they could probably do what both sides want. There is a lot of just let’s see who blinks first aspect to this dispute. And I think as I say we’re not talking about very much money. If both sides really wanted to they could probably work it out.”
Audio from the Senate session is courtesy of the Statehouse live-stream provided by Vermont Public Radio.