Legislative Review: State budget dispute continues

It was not my intention to provide a legislative update well into June and a month after your citizen Legislature adjourned, but since we are now three weeks into a special session called by the governor, it seems like an update is in order.
First, despite it sounding like we are in Montpelier in a day-to-day battle with the Scott Administration over property tax rates, we are rarely there. The House has met just twice since the special session was convened and the Senate just one day. The tax and appropriations committees have met a few more times than that.
If you follow the news, you know that Gov. Scott vetoed a budget that was passed nearly unanimously by the House and Senate — it earned support from the most liberal and conservative lawmakers for its ability to meet the needs of Vermonters while holding the growth in state spending to 0.5 percent. In reality, there is nothing in the budget that Phil Scott opposes.
The divide continues over education tax rates. Education spending is not decided by the Legislature. It is decided locally by school district voters. And this year, voters overwhelming approved modest increases in school spending — far less than the governor demanded — with full knowledge that spending would result in property tax rate increases. The Legislature’s job is to raise that money approved by voters and distribute it in an equitable way through property and other taxes. We don’t control that spending. Your school boards do. We simply set the rate.
While previous governors have respected the decisions made by school boards and voters over education spending, Gov. Scott wants to apply his “no new taxes, no new fees” mantra to the education property tax and use one-time money to buy down those rates this year and keep them level. That just pushes the tax rate increase out a year and violates a strong tenet of this Legislature not to use one-time money for on-going costs, something the governor also believed in strongly, once. The governor sees this $34 million infusion as a “loan” from the general fund that would be paid back through tools he wants the state to implement to control school spending, such as dictating staff-to-student ratios and tougher penalties for schools that spend above the statewide per pupil average, among others.
This would represent a significant increase in state control of our school systems and could have a big impact on rural schools. I think of Hancock, which has virtually no control over its school spending because it operates no schools — it could be hit with a significant high-spending penalty but no way to adjust. I think of Cornwall, Salisbury and Ripton in the Addison Central School District where careful budgeting kept school spending level, but just learned that transportation costs are going up 42 percent under a new bus contract that had one bidder. I think of Goshen and Leicester of the Otter Valley district where declining enrollment continues to make per pupil spending a challenge. The rest of Addison County faces similar challenges, which, it should be pointed out, school boards are addressing well.
If the governor’s goal is a Montpelier takeover of our education system, then the governor needs to be upfront about it, and thoughtful debate should take place.
The governor called for compromise. The Legislature did. We agreed to use a smaller amount of one-time money to keep the residential property tax rate level (as opposed to the non-residential rate). And we have passed a second budget that will guarantee no issues with funding government operations after July 1, while leaving aside the $34 million to argue over until a resolution is reached.
Gov. Scott has vowed yet another veto. He has not budged. He refuses to compromise.
In our original budget that was so strongly supported by all parties, we proposed to use this one-time surplus money to shore up the state teacher pension fund (woefully underfunded in the 1990s), an investment that will save Vermonters $100 million (guaranteed!) over 20 years. I still believe that is the best decision.

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