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Follow VPR's statehouse coverage, featuring Pete Hirschfeld and Bob Kinzel in our Statehouse Bureau in Montpelier.

Scott Will Allow Budget To Pass Without His Signature

House Speaker Mitzi Johnson and Senate President Tim Ashe have a plan to avoid a government shutdown on July 1st if lawmakers are still at an impasse with Governor Phil Scott over property tax rates
Meg Malone
VPR File
Gov. Phil Scott said in a statement Monday that he will allow the latest budget passed by the Vermont Legislature to become law without his signature.

Gov. Phil Scott said Monday night that while he doesn’t support lawmakers’ latest state budget proposal, the prospect of a government shutdown has left him “with no choice but to allow this bill to become law without my signature.”

Scott had long said he wouldn’t support any budget that allows for an increase in statewide property tax rates. While the spending plan passed by lawmakers Monday uses about $24 million in surplus money to keep tax rates flat for residents, it would result in a 4.5-cent rate increase on businesses and second homeowners.

In a lengthy written statement sent out late Monday night, Scott chided House and Senate lawmakers for refusing to heed his property tax directive.  

“And despite multiple paths offered by my administration and a bipartisan group of lawmakers, it’s clear majority leaders are willing to threaten a shutdown of state government, just to unnecessarily raise tax rates,” Scott said.

Despite his opposition, however, Scott said he’ll allow the new budget to go into law, in order to avert the government shutdown that might have gone into place had Vermont entered the new fiscal year without a spending plan in place.

“As Governor, I will not put the health and safety of Vermonters or the stability of our economy at risk,” Scott said. “While I do not support raising any tax rates in a year we have a $55 million surplus, this debate has gone as far as it can responsibly go.”

Scott vetoed the first two budgets lawmakers sent him this year, for largely the same reason he opposes their latest proposal.

Democratic lawmakers, however, say it’s the governor who’s been so intransigent.

Leaders in the House and Senate said Scott’s plan to lower statewide rates is an election-year political gimmick that would compromise the state’s fiscal health. The projected increase in statewide rates was a function of local school budget votes held back in March. Using a one-time surplus from the general fund to “artificially” buy those rates down, lawmakers said, would set taxpayers up for even steeper rate hikes in the future.

Senate President Pro Tem Tim Ashe said despite their concerns, lawmakers more than met the governor halfway.

“This [budget] represents more compromise than the Senate would have ever entertained from the starting point, and I think the House would say the same thing,” Ashe said Monday. “And so now we’re at the point where people should say, ‘Both sides have gotten out of their comfort zones, which reflects real compromise, and it’s time to move on.’”

The budget passed by lawmakers also includes a new framework for teacher health insurance contracts. The teachers union has historically negotiated those contracts at the local level, with district school boards. The new budget creates a statewide bargaining structure, a provision Scott has been pushing for since last year.

The specter of government shutdown had begun to loom ominously over the budget standoff. The new fiscal year begins July 1; if elected officials didn’t have a new budget in place before then, government operations could, according to Johnson, “grind to a halt.”

Both sides have blamed the other for any anxiety stoked by their prolonged standoff. And while Scott said it was lawmakers who used the “threat” of a government shutdown as leverage in budget talks, legislators say Scott’s responsible for the crisis in confidence in state government.

“We have compromised. Every budget we’ve passed moved closer to the governor,” said Washington County Sen. Ann Cummings. “The fact that we have gotten to these last few days rests on the governor’s shoulders.”

In a joint statement from Ashe and House Speaker Mitzi Johnson Tuesday morning, the legislative leaders said, “It’s a relief that the Governor is finally willing to accept the significant compromise the Legislature worked hard to put forward.”

“This bill is widely supported and reflects a reasonable compromise by both parties,” Ashe and Johnson said.

Update 10:55 a.m. This post was updated to include responses from Democratic lawmakers.

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