MONTPELIER — Republican Gov. Phil Scott heaped praise on a budget plan crafted by House Democrats Wednesday, noting they followed his directive to forego raising taxes and fees.
Still, the governor said he is hoping the House budget plan will still be amended Thursday and Friday as the full House debates the proposal to incorporate more of his ideas.
“I mean this sincerely — I think they’ve done a lot of work and I appreciate their efforts. They could have gone in a different direction. They could have tried to raise taxes and fees and continued down this path that we’ve been going for the last decade or so, but they didn’t. They agreed that we should take a break, that we shouldn’t be raising taxes and fees and we should live within our means,” Scott said at his weekly news conference Wednesday.
The House budget plan — which will be on the House floor Thursday and Friday — closes a projected $72 million gap between revenues and expenses. The biggest chunk of money used to close that gap comes from additional federal funding for the State Children’s Health Insurance Program, a state-federal partnership. Another $10 million comes from leftover Medicaid money the state has been setting aside for several years. More savings comes from spending reductions.
The House plan relies on $5 million in new revenue, but that will come from better compliance with existing taxes — not new ones, which the governor said he can support.
“I want to give credit where credit’s due. I’ve said before my line in the sand has been no new taxes and fees and they’ve adhered to that and I’ve appreciated that. I know it doesn’t come easily,” Scott said.
The House plan deviates widely from Scott’s own budget proposal, however, and he said he isn’t quite ready to sign off on their spending plan.
“Unfortunately, there are a number of economic initiatives, investments, that I think are needed in Vermont if we’re going to change direction, the trajectory of Vermont, and I would like to see those included,” he said. “Obviously, there will be some … amendments offered that could help improve that. We’ll see. There’s a lot of work left to do. This is only half-way through.”
Scott said he is hoping to see some of his ideas added this week on the House floor, and will continue pushing the Senate to accept his ideas after the House passes its version of the state budget and the Senate takes it up.
The governor is hoping to combine the Department of Liquor and the state’s Lottery Commission, which he said will result in savings. He also wants the state to capture expected savings that teachers and local school districts will see from new health care plans offered to teachers by the Vermont Education Health Initiative.
Scott said the change in health insurance plans is expected to save about $28 million over a full year. He said the savings could help fund his call for increased funding for early and higher education. Those savings would be negotiated by local teachers’ unions and school districts, however.
“There will be some benefits that someone is going to recoup but I’m saying that I think there are a number of initiatives that we should invest in with those savings,” the governor said. “I think you could have a little bit of everything. You could lower property taxes, or at least keep them level, and then make investments in areas of early child care and learning and also higher ed.”
House Speaker Mitzi Johnson, D-South Hero, said the House Appropriations Committee had “an incredibly difficult year” because Scott’s budget “created some significant problems that were counter to some of the Vermont values that we were hearing in terms of wanting stability and protection from property taxes.”
Scott’s proposal sought savings in the education fund by level-funding local school budgets and requiring teachers to pay at least 20 percent of their health insurance premiums. He proposed moving some general fund obligations to the education fund, which is largely funded by the statewide property tax, to help balance the general fund. The proposal was rejected by the House, which said it would increase property taxes.
Instead, the House chose to balance the budget in a more traditional way through spending reductions. Appropriations Committee Chairwoman Kitty Toll, D-Danville, said her number one goal was to forward a balanced spending plan to the full House.
“Equally as important was to pass out a budget that aligned our revenues with spending. We have had our expenditures outpacing our revenues for several years now and in the past few years we have made some significant changes in structuring the budget to overturn that path, that course that we were going down,” she told reporters Wednesday.
Toll noted that the committee approved its budget plan unanimously, including four Republicans. Overall, the entire state budget will grow by 1 percent and the general fund by 1.8 percent, which said is a “significant accomplishment of our committee.”
She cautioned that some Vermonters will be impacted by the budget plan because it does make some reductions in spending, mostly in the Agency of Human Services.
“There’s good things and there’s some things in this budget people will not like because there are reductions, and reductions do impact Vermonters,” she said.
Scott told reporters that the House plan meets his requirement of growing at or below the growth of the state’s economy.
Overall, the harsh tone that Scott and House leaders had been using against each other in recent weeks is easing. The budget must still pass the House and will likely be amended by the Senate, however.