CONUNDRUM
How do you hold the line on statewide education property tax rates without using any “one-time” money, find $300 million in “savings” in the Education Fund all while paying down teacher retirement obligations by $34.5 million to save $100 million in interest payments? Lawmakers and the governor have set themselves up to solve that conundrum during the Special Session. Governor Scott called lawmakers back to Montpelier on Wednesday, May 23.
Observers are closely watching to see which side’s narrative on the budget is resonating more with the public, particularly as the election season gets underway. Holding the line on taxes will be the governor’s mantra during the upcoming election, especially after angering some in his Republican base by signing gun safety legislation into law in April. Legislative leaders are claiming to be the real fiscal hawks and characterize the governor’s desire to use one-time money to buy down property tax rates as “governing on a credit card.”
In a letter to House Speaker Mitzi Johnson, the Governor made clear his objections to two bills that passed in the 2018 regular session that ended on May 12: (1) H.911, a tax bill that raises the statewide property tax rates and amends Vermont’s personal income tax laws, and (2) H.924, the FY19 budget bill.
“To be clear: if the legislature wants to raise property taxes at a time when we have significant surplus revenue, it will have to override a veto,” the Governor writes in the letter.
With that line drawn in the sand, on Wednesday, the “money committees” heard from a parade of administration officials about the Governor’s Five-Year Education Revitalization, Tax Stabilization, and Reinvestment Act.
That plan includes using one-time money to buy down the average statewide property tax rates so there will be no tax increase next year. The plan also proposes imposing student-teacher ratios, a statewide teacher health care contract, a transition to new special education payment methods, and changes to income sensitivity that reportedly saves $300 million in the Education Fund. The Governor’s plan landed with a thud in the money committees this week. Even the legislative Joint Fiscal Office is critical of the Administration’s math in achieving the $300 million in savings.
On Thursday, the House Ways and Means Committee, the only committee working in the building, was unable to come to consensus and move a tax bill. The House Republicans floated a proposal that uses “non-recurring revenue” to buy down the property tax rates, repays it with Act 46 school consolidation savings and makes various other changes to education finance laws.
Committee Chair Rep. Janet Ancel, D-Calais, also released a few compromise proposals on Thursday that propose to use some one-time funding to reduce statewide residential property tax rates but left the non-residential property tax rate at $1.59 for 2019, an increase of 5.5 cents over 2018. The Governor’s staff immediately rejected this proposal because it raises taxes.
The House and Senate are scheduled to be back in Montpelier on Wednesday, May 30, with no committees scheduled to meet before then. Stay tuned. |
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SPECIAL SESSION BILLS
SENATE BILLS INTRODUCED, PASSED AND SENT TO THE HOUSE:
On Wednesday, the Senate released new versions of three bills, quickly passed each through all stages and messaged them over to the House for consideration. Many of these bills made it through most of the legislative process during the 2018 session but fell short of the finish line before the legislature adjourned.
S.1 (formerly H.138) - An act relating to co-payments for chiropractic care and physical therapy
S.2 (formerly S.106)- An act relating to regulating finance leases for credit card terminals.
S.3 (formerly S.87) - An act relating to sexual exploitation of students
HOUSE BILLS INTRODUCED:
On Wednesday the House introduced eight bills and referred them to the committees of jurisdiction. Many of these bills made it through most of the legislative process during the 2018 session but fell short of the finish line before the legislature adjourned, except for H.911, which did pass both bodies but the Governor is expected to veto it.
H.1 - An act relating to sexual exploitation of a person in law enforcement officer custody
- Referred to House Judiciary Committee
H.2 (formerly H.922) - An act relating to making numerous revenue changes.
- Referred to House Ways and Means Committee
H.3 - An act relating to restorative justice principles in school discipline, prohibiting sexual exploitation of a person in the custody of a law enforcement officer, and criminal threatening
- Referred to House Judiciary Committee
H.4 (formerly H.911) - An act relating to changes in Vermont’s personal income tax and education financing system
- Referred to House Ways and Means Committee
H.5 - An act relating to protecting working forests and habitat
- Referred to House Judiciary Committee
H.7 (formerly H.571) - An act relating to creating the Department of Liquor and Lottery and the Board of Liquor and Lottery
- Referred to House Government Operations Committee
HOUSE BILLS RELEASED FOR INTRODUCTION:
The following bills were released for introduction after the House had adjourned on May 23. These bills will be referred to their respective committees of jurisdiction when the House reconvenes next week.
H.9 (formerly S.180) - An act relating to the fair repair of consumer electronic devices.
H.10 (formerly H.143) - An act relating to transportation network companies.
H.11 - An act relating to relief from abuse orders |
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