MONTPELIER — Leaders of the House and Senate are delicately rejecting the governor’s budget proposal as they hunker down on crafting a spending plan of their own that is likely to include budget cuts and, perhaps, some new revenue.
Gov. Phil Scott released his budget proposal last month, which addressed the state’s projected $70 million budget hole in the 2018 fiscal year by moving some general fund obligations to the education fund. The proposal relies on local school districts level-funding their 2018 fiscal year budgets to avoid a massive increase in property taxes.
But lawmakers have already rejected one key portion of Scott’s proposal — moving school budget votes from Town Meeting Day to May 23. The Senate Education Committee and the full House held votes rejecting the change in the voting date. That means school districts will not have the necessary time to redo their budgets.
“The Senate took a straw poll,” House Speaker Mitzi Johnson, D-South Hero, said in an interview. “The House took a really strong vote to say, ‘Look, we can’t just push back the timeline on school budgets that are already ready to go. That ship has sailed. To ask school boards to, after they’ve spent the last four months dealing with budgets, to spend the next four months dealing with budgets and bargaining, was not reasonable.”
Senate President Pro Tem Tim Ashe, D-Chittenden, acknowledged to reporters Tuesday that the governor’s proposal — and the education portion he relies on to balance the budget — are not going to receive approval from lawmakers.
“If you look at it as a complete package, maybe that’s true,” Ashe said. “Some of those topics the Education Committee may continue to look at. They don’t all solve the budget problem.”
Johnson said the House will focus on crafting a budget proposal of its own. She said the governor’s plan could leave property taxpayers on the hook because it moves more than $130 million in general fund obligations to the education fund.
“The House gets to come up with our own version. We’re a separate branch of government. We are getting quite a lot of feedback that putting $45 million onto property taxpayers is not an option,” she said.
House committees will be asked to help find ways to balance the budget plan created in the House, according to Johnson.
“There are certain things we have to do. It’s all of the testimony. It’s discussion with policy committees,” she said. “We’re working to engage all committees in the House because it is a tough budget. We’re at that phase right now where things look really dark and we’re just looking for our options and generating lists of possible options.”
The Senate which will have a crack at the budget after the House passes a spending plan, will follow a similar path, Ashe said.
“ We’re going to be challenging every committee over the coming weeks to put ideas on the table that help close the budget gap,” he said.
Lawmakers in both chambers say whatever spending plan emerges will likely follow the traditional approach to closing a budget gap— some reductions in spending and some new revenue. But both Johnson and Ashe are so far skittish about addressing new revenue, choosing instead to focus on ways to reduce spending.
“In the last 10 years we’ve had a lot of revenue discussions and there has been revenue,” Johnson said. “When you look at the percentage of the budget gaps in the last 10 years that have been solved with revenue versus solved with both cutting and efficiencies and focusing on spending, it’s actually quite remarkable that the revenue solution is a tiny part.”
She added, “Most of the time it has been changes in policy and cuts in spending and a whole lot of efficiencies in government. We’ve used a lot of different tools and revenue has been, I think, the smallest tool that we’ve used.”
Ashe said raising new revenue to help balance the budget will be a last resort.
“The first instinct should never be to raise money for the sake of raising it,” he said. “You raise money if you need to raise money to keep meeting the needs of the budget. It’s premature to say, ‘Oh, we’ve got to raise new money,’ because we have to work through the budget and see what opportunities there are. It’s just a tough one to answer because we don’t know.”
Scott has said he will not support a budget that includes any tax or fee increases. Ashe said that edict must be considered by lawmakers as they work to create a spending plan of their own.
“When you have a governor, just like the last one, threatening to veto any increase, the Legislature can decide to fight that out or have to think of a different strategy. It puts everybody in a bit of a box right out of the gate, so the question now is do the sides of the box sort of widen a little bit,” Ashe said.
“ The governor was elected by the people and he said he would veto any tax and fees, so we have to then factor that in,” he added.
Still, Johnson and Ashe have intimated there are limits to how much the state can cut to programs before considering revenue.
“If it does not look like reductions alone can close that gap, then we’re going to have to have a long, hard talk with the governor about his no tax and fee veto comments,” Ashe said. “We’re not looking for a showdown.”