Democratic lawmakers, governor at impasse on budget

MONTPELIER — After weeks of inconclusive negotiations with the governor, legislative leaders on Wednesday afternoon said it was time to move on.
“We have reached an impasse,” House Speaker Mitzi Johnson, D-South Hero, said.
Johnson and Senate President Pro Tem Tim Ashe, D/P-Chittenden, presented a united front, saying more than a dozen meetings with Gov. Phil Scott’s administration on the issue of teachers’ health care negotiations had not yielded a satisfactory result.
In mid-April, Scott came forward with a proposal to shift negotiations for teachers’ health care benefits from the local to the statewide level, which he said could net up to $26 million in property tax savings. He threatened to veto the state budget if the Legislature does not pass legislation that meets his requirements.
Key for the Democratic leadership is the need to keep collective bargaining untouched and at the local school district level. The governor, on the other hand, will not budge on the need to have a uniform bargaining outcome to maximize savings from the switch.
Ashe and Johnson both came up with counterproposals that would return savings directly to the property tax payers. The Republican plans would move the savings into the education fund to either lower property taxes for everyone or be used to provide a tax cut but also help pay for higher education and child care.
Failure to find resolution has twice thwarted legislative adjournment ambitions already. Lawmakers are now back for a 19th — unbudgeted — week, officially running overtime. If Scott vetoes the budget, he would call lawmakers back for a special session to come up with a new budget. The state fiscal year starts July 1.
Ashe and Johnson expressed frustration with the discussions with the governor in recent weeks and said he has been unwilling to meet them on middle ground.
“There is a point where a negotiation becomes a dictation,” Ashe said.
Ashe said the governor’s original proposal did not guarantee that taxpayers would recoup $26 million because the state would have to negotiate the perfect deal with teachers’ unions in order to net the full savings.
Johnson alluded to multiple proposals the Legislature has floated to try to meet his goals.
“We’ve put out easily three or four different ideas, and none of them are his and so they have all been rejected,” Johnson said.
Last week, the Senate passed the Ashe plan that cut $13 million from the education fund, strongly recommended a specific outcome on health care that keeps bargaining local, and would force school boards to cut their budgets if they were not able to negotiate the exact amount prescribed in the legislation.
This week, the speaker presented the governor with a modified plan — but no actual language. Sources told VTDigger some of the components. Contract talks would continue at the local school district level but with restricted terms. School districts and the union would have to negotiate an 80/20 split on the premiums (pegged to a specific plan) and put an exact amount in health savings accounts to cover teachers’ out-of-pocket costs.
If the bargaining concluded without all the health care savings, school districts and teachers would split the remainder to make up for the lost savings. School districts would cut their budgets, and teachers would forfeit a portion of their salaries.
Now, Johnson and Ashe said, legislative committees will resume work on the final bills of the year — including the state budget and the education finance bill — to reconcile the House and Senate positions.
The plan now is to assign a conference committee to deal with the education property tax bill with the Ashe proposal the Senate sent over to the House. House and Senate conferees will dig into this and see if they can accommodate the governor and both chambers.
Adjournment could happen as early as the end of the week, according to an aide to the speaker.
The Legislature will remain open to ideas from the governor, but they’re not counting on it, the two leaders said.
Earlier in the day, Scott said the latest proposal from the speaker’s office is “moving in the right direction” but that the negotiations with legislative leadership had not progressed much.
He claimed there is broad support for his plan among the public.
“There might be this vortex here surrounding the Statehouse, but outside the Statehouse there’s a constant wind of support for what I’m proposing,” Scott said.
He reiterated that he will not support the state budget if the Legislature does not meet his requirements.
“I’ve made it quite clear that if we aren’t able to get agreement on what I believe needs to be in the bill, that I will not hesitate to veto it,” Scott said.
Senate Minority Leader Dustin Degree, R-Franklin, said if leadership is not working with the governor, he expects to be back in June for a veto session.
“If they’re not willing to come to the table with the governor anymore, there’s no reason for us to be here,” Degree said.
“We were hopeful we could come to some conclusion,” said House Minority Leader Don Turner, R-Milton, on Wednesday afternoon.
He expects lawmakers will just return to the same situation in the Statehouse two weeks from now.
“We are on a path to a veto. There is no sense hanging out for two, three, five more days when the inevitable is going to happen,” he said.
Turner said it is not true the governor has been immovable as the Democrats claim.
“I am standing in front of you and telling you that is not true,” he told the Republican caucus. The governor has been meeting with Turner and some other Republican lawmakers to keep them up to date on proposals. Turner said the governor has been flexible on some things that the caucus wasn’t comfortable with.
“We have to keep our coalition together, too,” he said.

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