Gov. Scott to call lawmakers back for special session

Photo by Anne Galloway/VTDigger
Lawmakers are sworn in on the first day of the legislative session. Lawmakers could be back at the Statehouse next week.

By Xander Landen
VT digger.org

Gov. Phil Scott told lawmakers Tuesday that he plans to call them back to Montpelier for a special session next week, mainly to settle a $33 million disparity in their education funding proposals.

In a letter to House Speaker Mitzi Johnson and Senate President Tim Ashe, Scott said he intends to call a session that would start May 23 and wrap up by May 25.

Scott’s plan is no surprise. He has pledged to veto the budget and a number of other bills, and told lawmakers on Saturday that he would see them back in the Statehouse soon.

The governor vowed this year to oppose any bills that raise taxes and fees. In recent weeks, he said a veto and special session were inevitable if the Legislature didn’t adopt his plan to buy down the property tax rates using $58 million of one-time money.

The tax and budget bills the Legislature passed before adjourning this session would raise property taxes by $33 million, according to Scott, moving them closer to his position, but not close enough.

“Last year we were able to work together to pass a budget and education financing bill that did not rely on a single new revenue source, including level property tax rates. I am more than confident we can accomplish the same this year,” Scott said in the letter.

The Scott administration has said that its plan — which would include changing how special education is funded, shifting to a statewide teachers health insurance plan, and forming a task force to help schools trim their staffs — could save nearly $300 million over five years.

But both Democrats and Republicans are worried about using one-time funds to patch a hole in the education fund for the second year in a row.

“Last year the governor insisted on buying down rates with one-time money and we knew that it would create a problem this year and I just am not willing to do that again,” Johnson said Tuesday.

While the state got a dramatic windfall of $35 million from a settlement with the tobacco industry and $44 million from unexpected tax revenue this year, lawmakers chose not to harness this one-time money to carry out Scott’s plan.

Instead, they invested in the state’s financial health, including $34 million to chip away unfunded pensions for state employees and teachers. Lawmakers said that will save $100 million in interest over time.

In his letter, Scott said he hopes the special session will focus only on the budget and education finance — issues with a direct impact on property tax rates.

Johnson said she’s not on board with that plan, especially as Republicans prevented a number of bills from reaching the floor at the end of the standard legislative session on Saturday.

“He can call us back, but he doesn’t get to determine what the agenda is and what we do while we’re in session,” she said.

Those bills include merging the liquor and lottery commissions, simplifying government for small businesses, taxes on e-cigarettes and opioid producers, and school safety legislation.

Johnson also doesn’t think three days — Scott’s timeline for the special session — will provide enough time to hash out budget and education finance proposals.

“You can’t pass a bill in three days,” she said. “We’re talking about $1.6 billion and something that affects every community.”

Johnson noted the Legislature has tried to meet the governor in the middle by lowering the proposed property tax increases.

The tax bill, H.911, would raise property tax rates by 2.6 cents for homeowners and 5.5 cents for nonresidential property taxpayers, down from earlier proposals of 5 and 7 cents.

“I think given where we started, we’ve moved quite a bit,” Johnson said. “And I would like to see the governor move a bit on some of his asks as well.”

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