We had two legislative sessions in 2018. One, which ended in mid-May, our normal adjournment time, and the second, began promptly after the completion of the first. It ended Friday, June 29. Why two sessions? Politics.
Gov. Phil Scott had said, early in the year, he would not sign any legislation that increased taxes or fees or increases in existing levies. This was part of his commitment to make Vermont affordable. As the statewide education fund needed additional dollars, after voters approved school budgets, the Homestead and non-Homestead property tax rates were increased by the legislature to cover the increased costs. The governor vetoed the budget and tax bill, as promised, and a Special Session was called to deal with the issue.
What was the governor’s plan to fund the Education Fund without raising property taxes? Vermont has realized something like $170 million in excess revenues this fiscal year. His plan was to use some of the excess revenue to pay down the proposed property tax increase and keep the tax rates level with this year’s numbers.
Legislative leadership saw things differently. They pointed out that the voters approved the school budgets. It was not legislative action that caused the rate hike. Plus, using one-time money to keep the education property level would create a gap going into next year’s calculations making the state vulnerable to a larger property tax hike next year. The legislature allocated the surplus to build reserves and make an extra contribution to the underfunded teacher’s pension plan. So there was a standoff between the governor and Republican legislators and the Democrats, including House leadership.
Reduce Vermonters’ property tax liabilities or fund legislative priorities, what to do?
For the first four weeks of the Special Session, little was accomplished. The legislature took one step early in the session — that was to make the residential property tax level. The body also re-submitted the budget and tax bill in one package and the Governor promptly vetoed it as it kept the non-Homestead property tax rate at a level that was 3 percent above last year’s number.
What followed was a lot of talk and zero negotiating. Each side did its best to make the other look like the bad actor. For example, a message was spread that state government was headed for a shut down because of the governor’s veto. There never was a risk of a shut down. Despite the parties’ differences, no one had an appetite to bring government to a halt.
So, with one week left until the end of the fiscal year, the Speaker of the House, Republican and Democratic leadership, plus the governor worked out a compromise.
The Senate leadership did not like their work. Then House leadership hammered out a second compromise. The Senate leadership also frowned upon this second compromise.  Late in the evening of Friday, June 22, a third budget and tax bill came to the fore, as proposed by the Senate, and it passed. It kept the Homestead tax rate level with this year’s and made a slight concession to the governor on the non-homestead rate.
The Senate also added some potential education funding cost containment actions. One was authorizing the state to negotiate teachers’ health insurance coverage. The second is a study on student/employee ratios in our schools. At the end of the day Vermonters will keep about $58 million in their pockets due to the lower than originally proposed property tax rates. Plus most of the legislative funding priorities will get allocations.
On another note, the committee of which I am a member of, Ways and Means, also managed a reduction in all Vermonters’ income tax rates, plus we eliminated the income tax on social security benefits for low and moderate-income recipients.
Vermont legislators can have their differences. Sometimes we butt heads, but we are Vermonters and we get the job done in the end.