Key lawmakers are questioning Gov. Phil Scott's plan to finance a $7-million increase in child care funds, saying the proposal is akin to "raiding" the state's education fund.
Last year, lawmakers made a decision concerning the allocation of money to the education fund: They dedicated all sales tax revenue to the education fund, instead of transferring money every year from the general budget.
But now this change is causing a problem with the governor's plan to increase child care funding.
Scott wants to use $7 million from an expansion of the internet sales tax to pay for the child care hike. But House Ways and Means Chairwoman Janet Ancel said this is money should go the education fund, not to child care.
"I think that decision to put all the sales and use tax money in the education fund was a sound decision, and I think we ought to stick with it,” Ancel said. “And if we agree that funding child care is a priority — and ... I happen to think that it is, I agree with that — then we should be honest about how much it's going to cost and how we raise money for it."
Senate Finance Committee Chairwoman Ann Cummings has similar concerns as Ancel.
"That's money that would arguably lower property taxes, and I think some of us are a little uncomfortable with before we've had one year of experience, we start raiding the ed fund,” Cummings said.
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But Adam Greshin, commissioner of the Vermont Department of Finance and Management, defends the governor's approach.
"We're not raiding the ed fund — this is new revenue, the first 7 million [dollars] of which we are re-directing to the child care financial assistance program,” said Greshin. “So we're not actually taking revenue out of the education fund, we're generating additional revenue and directing a portion of it to child care."
Carolyn Wesley, of the child care group Building Bright Futures, also supports the governor's plan.
"Building Bright Futures is very pleased to see that the governor's budget recognizes the child care crisis facing Vermonters and is proposing funding to make child care more affordable for families. ... It is a terrific use of new revenue," said Wesley.
The dispute could have a direct impact on next year's state budget and the state's property tax rate for education. If lawmakers choose a different funding source for child care, it could test Scott's pledge not to raise any broad-based taxes.