Vermont Gov. Scott's budget veto stands, lawmakers must start over

MONTPELIER - Vermont lawmakers will need to start over on the state budget and relaunch tax negotiations after the House of Representatives failed to override Gov. Phil Scott's veto.

The vote was 90-51. Democratic, Progressive and independent members needed a two-thirds majority, or 95 votes, to pass the bill despite Scott's opposition.

The bill was intended to be a stopgap solution that would keep state government open, but it would not have resolved the underlying dispute with Scott about whether a tax rate increase or one-time money should be used to fund school budgets in the coming year.

Scott vetoed the bill because it left open the possibility of a default increase in the non-residential property tax rate, which applies to commercial property, rental property, second homes and camps.

"I stand with the governor and hardworking Vermonters to oppose this unnecessary increase in property taxes," said House Minority Leader Don Turner, R-Milton, after voting to uphold the veto.

Rep. Kitty Toll, D-Danville, who led work on the bill as chairwoman of the House Appropriations Committee, said she was disappointed in the failure to pass a budget.

"It is irresponsible to use our state budget as a pawn," Toll said. "Partisan politics should never come before the needs of our constituents. Vermonters rely on government for many aspects of their lives, and we have let them down today."

Senate President Pro Tempore Tim Ashe, D/P-Chittenden, blamed the five Republican House members who previously supported the budget bill but changed their votes Tuesday to uphold the governor's veto. 

"It's discouraging that some House members would flip-flop for no good reason," Ashe said in a statement. "They support literally everything in this bill. If they want to shut down government and trash our public schools, well then I guess they sent their message loudly today."

The Senate is expected to begin work Wednesday on another version of the budget bill.

"With eleven days remaining in the fiscal year, time is of the essence," House Speaker Mitzi Johnson said in a statement. "We remain committed to passing a budget and accompanying tax bill."

In a statement, Scott called for a stopgap budget bill that does not allow the non-residential property tax rate to increase. He said it would be an "easy solution" to the budget debate, but Democratic leaders have resisted the suggestion in recent weeks.

“I have directed my staff to make meetings with the Legislature our top priority and we will make ourselves available to achieve a consensus that fully funds school budgets and strengthens our education system without raising property tax rates in a year we have an unexpected surplus in taxpayer dollars," Scott said in a statement. "There is no reason we cannot reach agreement quickly to achieve these goals.”

Four weeks of frustration  

Reaching a solution on the overall dispute with Scott would require cutting through the distrust and exasperation that have sometimes characterized the special session, which has been ongoing for about four weeks.

"We're literally going to be in the same place today that we were May 12," said Rep. Scott Beck, R-St. Johnsbury, on Tuesday. "That should not have happened."

Beck said he felt that the Legislature wasted five weeks trying to find a combination of tax increases that would satisfy the governor, when there was no combination that would suffice.

"The Legislature has had plenty of chances to signal a real willingness to compromise," said Rep. Kurt Wright, R-Burlington. "Instead, we have wasted a monumental amount of time and sent the governor not only mixed signals, but bad signals in regard to compromise."

The tension was palpable at a committee hearing Friday, where House members faced off with administration officials about the possibility of a government shutdown. 

Administration Secretary Susanne Young declined to share the administration's shutdown contingency plans, saying it was the Legislature's responsibility to pass a budget and avoid a shutdown.

Rep. David Sharpe, D-Bristol, announced that he was "completely frustrated." Rep. Alice Miller, D-Shaftsbury, accused the Scott administration of "assault on public education" then apologized for the outburst. 

"It's time to trust each other," State Treasurer Beth Pearce told lawmakers at a committee hearing Friday. "It's time to work on behalf of Vermonters and make that happen."

Johnson told reporters that she and Ashe met privately with the governor last week to reestablish communication. It was the first time during the special session that all three leaders had met alone. 

Unlike last year, Democrats have insisted  on negotiating with Scott's administration through the normal public committee process.

"This is a messy process. Last year, everybody was unaware of how messy and how uncertain it was because it was all going on behind closed doors," Johnson said. 

"By having it be a lot more open," she continued, "it looks like the sausage-making that sometimes democracy can be."

Contact April McCullum at 802-660-1863 or amccullum@freepressmedia.com. Follow her on Twitter at @April_McCullum.