The $58 Million Dollar Question

Will the 2018 legislative session wrap up this week is the $64,000 question or in this case, more appropriately the $58 million question? History tells us when there are deadlines, compromises are made at the eleventh hour and adjournment happens. While we hope that is what happens this coming weekend, I am not so sure at this writing.

Much like last year, the main issue is centered on education funding, specifically the statewide property tax, and the increasing cost of educating our declining number of K-12 students. Student enrollment is down from a peak of more than 100,000 to 76,000 students this year and projected to decline another 7,000 in the next eight years. The Governor has proposed using $58 million of one-time funds to keep property taxes level in exchange for initiatives that hold promise to reduce the cost of education going forward.

Proposals, such as reducing staff ratios, have not been well received by legislative leaders. Scott’s plan would set a target ratio of student to all staff of 5.5 to 1 over the next five years, compared to the current statewide average of 4.3 to 1, the lowest in the country. Statewide healthcare benefits, which held up last year’s session, appear to now have wider support in the State House following the NEA’s change in position to move to a statewide formula.

The onetime money is largely from expected increases in tax revenues this year that are in part due to larger transactions by individuals and corporations from the sale of businesses, anticipated federal tax reforms and a 2017 stock market rally. Additionally, the state received a onetime payment of some $30 million related to the tobacco settlement.

While education funding needs to be resolved in some fashion, there are a number of other issues that legislative leaders appear to teeing up for vetoes by the Governor. With S.103, relating to the process of adding expansion of banned chemicals in Vermont, already vetoed, there are potentially some 15 more that could face the same fate.

For example, the House gave approval to S.105 last Friday that restricts what businesses can include in their waivers (typically required before certain activities like balloon rides), and is strongly opposed by ski areas and many in the outdoor recreational community. Also late on Friday, the House Appropriations Committee advanced without recommendation, S.40, which increases Vermont’s minimum wage to $15 over several years. The motion to advance without recommendation suggests there was not support in the committee to advance it favorably and that House leaders indicated they wanted the bill on the floor. Scott has indicated he is opposed to a state mandated $15 wage over concerns about its economic impact.

Meanwhile the Senate Appropriations Committee did the same thing for a new paid family leave proposal that is funded with a new payroll tax on employees. Again, it is sure to be vetoed by the Governor.

And then there is are new taxes in the clean water bill, S.260.  Other bills contain so called “poison pills” like citizen lawsuits. Could we be facing a record number of vetoes this year? (11 is the current record set by Howard Dean in 1994). Advancing bills to the Governor when it very clear they will be vetoed suggests it is being done to articulate political differences and not in response to actually trying to pass a new measure.

It is my sincere hope that cooler heads prevail in the final days of the 2018 session and the appropriate compromises are made by both the executive branch and majority party leaders in the legislature. It may take some late nights this week, but where there is the will, there is a way.

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