Watching Paint Dry

We all know the old adage, it’s like watching paint dry. In other words, a very slow, and perhaps boring, process. With three weeks into the special session, albeit only one or two days a week, and nothing to show for it thus far, it might be an appropriate metaphor.

Legislative leaders put forth a new budget and tax bill taking out all but one issue of disagreement with Governor Scott, in hopes of averting a potential government shutdown at the end of the month with a promise to keep working on the issues surrounding education funding and property taxes.

Scott, while initially intrigued by the approach, quickly realized that the bill would increase the statewide non-residential or non-homestead property tax rate by 5.5 cents (would hold average statewide residential rates even). Suspecting the legislative leaders will no longer have incentive to come to an overall tax and education funding agreement, the new budget bill faces an almost certain veto again.

The Governor has maintained that with the state coffers showing a surplus this year, we shouldn’t be increasing statewide taxes. This past Tuesday state revenues were up again ($11 million for May). Scott quickly issued a statement and said, “This means the State will now have about $55 million in surplus revenue, in addition to $34 million in unanticipated settlement funds and $82 million from organic growth and economic activity. That’s a total of $171 million more than we had last year, and yet legislative leaders continue to insist on imposing a statewide property tax rate hike on Vermonters.”

Senate leader, Tim Ashe, D/P-Chittenden, and House Speaker, Mitzi Johnson, D-Grand Isle, argue we shouldn’t be spending possible one-time money for ongoing expenses, like annual school costs, or we may face larger increases next year. Ashe likens it to spending on a credit card (although past legislatures and administrations have admittedly used one-time money for ongoing expenses).

While some of the Governor’s education proposals to contain costs have not been well received, he has signaled support of several amendments in the House that were offered during the debate of the new budget as a way to break the log jam. In the end, they were voted down primarily along party lines:

  • “The Beck Amendments” – Both amendments to the tax bill would achieve cost savings by altering the yield to more closely connect property tax payers with implications of their own school budget votes. It could be used as an alternative to cost containment measures proposed in the Governor’s five-year plan.
  • “The Browning Amendment” – A bipartisan amendment to the budget offered by Rep. Cynthia Browning (D-Arlington) would ensure the budget met legislative leaders’ commitment to a budget that excludes all provisions related to property tax rates. (The budget currently does not meet that commitment). The Amendment also proposed paying off Act 46 merger incentives while holding statewide property tax rates level.
  • “The McCoy Amendment” – An alternative to the Browning Amendment, which also would have ensured the current budget met legislative leaders’ commitment to a budget that excludes all provisions related to property tax rates.

The only possible path to conclusion, may be adopting a new tax bill (H.4) that irons out a compromise with the administration. Perhaps a tall task at this point, but with the clock ticking toward June 30, it is certainly possible.

This past Friday afternoon, the House Ways & Means Committee gave preliminary approval to a proposal on a different bill that would increase the statewide residential rate by 2 cents and the nonresidential by 4 cents, moving further away from the Governor’s position. At the same time, the budget bill, H.13, was sent to the Governor, which may invite a veto unless a breakthrough occurs in the next few days on the new tax bill, H.4.

A recent news report sums up the standoff:

“I don’t want to see a shutdown…But it’s as much in their hands as it is mine,” Gov. Scott said. “I’m telling them what I’m going to do. I’m not signing a bill that raises taxes and fees, end of story.” Senate President Pro Tem Tim Ashe, D/P-Chittenden, told reporters that lawmakers will try to avoid a shut down. But he said they won’t be beholden to Scott’s demands and hopes the governor will “move in their direction.”

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