MONTPELIER — House Speaker Mitzi Johnson and the chairs of the House money committees came out swinging Wednesday, accusing the governor of shirking his responsibility to govern by not engaging with lawmakers in the budget process after his initial proposal was rejected.
Johnson, joined by Appropriations Committee Chairwoman Kitty Toll and Ways and Means Committee Chairwoman Janet Ancel, excoriated Republican Gov. Phil Scott for being disengaged from the budget process and sticking to what they say is a budget plan already rejected by lawmakers and local voters.
Showdowns between lawmakers and the administration are expected, but for the first time in six years, the Democratic-led Legislature must work with a Republican administration. Wednesday’s tough words from Democrats indicate a more volatile process is likely this year than in recent years when Democrats also controlled the governor’s office.
Scott’s budget proposal, unveiled in late January, called for local school districts to level-fund their budgets and force teachers to pay at least 20 percent of their health care premiums. Doing so would save tens of millions of dollars in the state’s education fund. Scott proposed to move some general fund obligations to the education fund and provide new funding for early and higher education with the expected savings.
But that plan — which faced timing challenges because school boards had already crafted their budgets and faced a deadline to warn them for Town Meeting Day, not to mention the need to negotiate with teachers on their health care plans — was rejected early by Democratic lawmakers and even found little support from Republican lawmakers who were forced to weigh in early during the committee process.
“The governor’s proposed budget is built on a house of cards. We know that. He shirked his responsibility to put a balanced budget on the table. He had costs in the education fund. He tried to steal local control of budgets and local bargaining of communities and he proposed raising local property taxes by $50 million,” Johnson said at a State House news conference.
Even after voters approved the vast majority of school budgets last week on Town Meeting Day — most with spending increases — the governor has continued to insist on finding savings within the education fund. He has provided lawmakers with no specific plan to identify such savings, however, beyond requiring teachers to pick up more of their health insurance premiums.
“Voters were given a chance to really weigh in on the governor’s budget proposal and overwhelmingly they said, ‘No way, not us.’ Over 90 percent of school budgets passed on Town Meeting Day. The school districts had options to delay their vote, to vote down their budget, to take the governor up on his proposal and they said no,” the speaker said.
Johnson was clear Wednesday that Scott’s act has worn thin on Democratic leaders in the House who demanded that he provide new ideas as they look to balance the state budget. The House Appropriations Committee has reduced a projected $72 million gap between expected revenues and expenditures in the 2018 fiscal year budget to $18 million. In doing so, they have accepted many of Scott’s savings proposals. But they said the governor now needs to help find real ways to eliminate the remaining gap, especially if he wants new spending for early and higher education, which the House has not included in its framework.
Toll, D-Danville, said she has been expecting new ideas from the administration for weeks but none have materialized. She sent a memo to the governor’s office Tuesday asking his team to engage with her committee and is awaiting a response.
“I will solve this problem but I would be much happier solving it as a team and not doing it as a single approach — the legislative branch versus the administrative branch. Our committee is wide open,” Toll said. “I’m in hopes that the administrative branch would like to come forward and provide some information, some ideas, where they would like to see, or help us, bring this budget to closure.”
The Appropriations Committee has put potential budget cuts on the table as it looks to address the final $18 million. Toll said those cuts will hurt Vermonters and could include previously sacred areas like the Vermont Veterans Home, which receives significant state funding.
“They’re going to come at a cost unless I’m given a bunch of new revenue to work with, which I don’t think will happen,” Toll said.
Ancel, D-Calais, said her committee has “acknowledged that the governor ran on a platform of no new taxes and no new fees,” and is looking at ways to improve compliance with existing taxes rather than raise them. She said better compliance with the sales and use tax, among others, could net the state an additional $5 million that would help offset the remaining $18 million gap.
Ancel blasted the Scott administration’s proposed spending plan for increasing property taxes and said her committee will not support that. The Legislature’s nonpartisan Joint Fiscal Office provided lawmakers with an analysis of the governor’s proposal and found that it could increase property taxes.
“While we’re being respectful of the governor’s position of no news taxes and no new fees to the extent that we can, we also think that includes property taxes,” she said. “Our committee is committed to doing everything we can to make sure that doesn’t happen.”
Johnson, a former chairwoman of the Appropriations Committee, said she believes the governor has stuck to his original plan and declined to offer new ideas “because it’s hard.”
“It is not easy to figure out how to close a $70 million budget gap that fulfills our promises, that protects our environment, that doesn’t undermine our communities and that doesn’t raise taxes. He made a lot of promises in the campaign and those promises that he made, when you put them all together, are very hard to live by,” she said. “Some of the choices make you very unpopular — I know.”
Senate Minority Leader Dustin Degree, R-Franklin, scoffed at Johnson’s characterization and said the House “should do their job.”
“If they do not like the governor’s original proposal they should write the budget that they feel meets the needs of Vermonters. Whether it raises taxes or not, let it come to the Senate and let it go to the governor’s desk. But, I think with six days left before crossover, to ask the governor to do his job, I think is bombastic,” he said.
House rules require the Appropriations Committee to send its budget to the House floor by March 24, leaving just six legislative working days to complete a spending plan.
Degree said the House is responsible for coming up with its own plan if they are not prepared to accept the governor’s plan.
“It sounds to me like for six years the Appropriations Committee waited for [Former Democratic Gov.] Peter Shumlin to tell them what to do. Welcome to divided government,” he said. “The governor put something the table. It wasn’t to their liking. I think it’s time for them to put something on the table and let Vermonters pass judgment on it.”
Governors typically work with lawmakers “behind the scenes” on balancing the budget, even as they publicly maintain their allegiance to their own proposal, Johnson said. “That’s not happening here,” she said.
The Democrats said they are particularly peeved that Finance Commissioner Andy Pallito wrote to agency and department heads and instructed them to continue promoting Scott’s proposal. In that memo, Pallito wrote that “agencies and departments shouldn’t negotiate further changes directly with the Legislature.”
“I understand that some Agencies and Departments are being contacted by House Appropriation Committee (HAC) members regarding further reductions to the Governors FY18 Proposed Budget,” Pallito wrote. “If you are contacted, please remind them that the Governor put forth a balanced budget, and we should continue to support that budget. Any additional cuts should be communicated by the Legislature directly to the Secretary of Administration’s office.”
Scott spokeswoman Rebecca Kelley sought to reframe the disagreement between the administration and House Democrats. She said the problem is not a lack of communication between the two entities but, rather, a difference in philosophy.
“The governor presented a balanced budget without raising taxes and fees — including property taxes, despite the misleading rhetoric — without cutting programs that protect our most vulnerable, and while making investments in areas that will help grow our economy,” she said. “The governor remains committed to the goals and parameters established in his budget, and we’ve continued to communicate this directly to the Legislature. House majority leadership has made it clear they do not support the governor’s priorities, or want to work within those parameters to balance the budget. This is a difference in priorities and approach from previous administrations, not a lack of communication.”
Kelley said the House has had seven weeks to craft its own proposal and has offered no new solutions of its own “beyond the threat of across-the-board cuts to services and putting frontline staff at risk of layoffs.” Kelley indicated the administration does not plan to offer new proposals and will instead look to reconcile differences between Scott’s plan and the House plan — once it is completed.
“We remain ready to work with them as they present a complete budget proposal, to find common ground and further discuss the differences between their budget and the governor’s,” Kelley said.