Government Relations

2018 Washington County Legislative Delegation

Congressional Delegation 2017 – 2018 115th Congress

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Special Session Report – May 24, 2018

Battle Lines Being Drawn

            There’s something happening here
What it is ain’t exactly clear…

The General Assembly reconvened on Wednesday to begin a rare special session called by Gov. Phil Scott to resolve a highly contentious impasse between the administration and legislative Democrats over the annual budget and a related tax bill, both of which the governor is expected to veto this week.

Lawmakers left town at the end of the day with no resolution in sight.

The dispute is over large principles and small dollars. Scott has taken an unwavering position all year against any new taxes, and the tax bill would raise statewide property taxes by $33 million. He argues that with $160 million in new revenues this year, the state can amply afford to avoid the increase by filling the gap with one-time funds.

Democrats take a similarly high-minded view that the state should not use one-time funds to pay for ongoing expenses. They argue that local voters approved the property tax increase, and the $33 million should be better used to pay down long-term teacher retirement obligations, which would save $100 million over time.

In addition to considering the big bills, lawmakers also hope to pass a handful of largely (but not entirely) noncontroversial House and Senate bills that were close to the goal line at the end of the 2017-2018 biennium. It was unclear as of Wednesday as to whether the leadership of both bodies had reached an agreement as to what bills would be considered.

Underlying the debate over new taxes are enormous policy and procedural differences about education funding. The administration submitted an education reform plan in early May that it argued would create long-term savings and avoid the need for tax increases. Democrats largely reject the notion that any further reform measures are needed, after a voluntary consolidation bill, Act 46, was passed in 2015. That law has produced some school district consolidation, although the state’s per pupil spending remains among the highest in the country.

Regardless of the merits of the administration’s plan, the timing of its rollout and its lack of specificity have created widespread puzzlement in the Statehouse. The probability that the legislature will adopt major education reforms that were proposed in May is essentially zero.

Despite the long odds, the administration sent its policy A-Team – acting Education Secretary Heather Bouchey, Department of Financial Regulation Commissioner Mike Pieciak, Finance and Management Commissioner Adam Greshin and Tax Commissioner Kaj Samsom – to sell its proposal, which they did with broad ideas and little detail.

There has been little support for the governor’s plan from lawmakers of either party, with nearly uniform bipartisan objection to the use of one-time funds to hold tax rates steady. The education fund started this year in the red due to the use of one-time funds last year.

Committee chairs pushed the administration for details as well as the assumptions behind its projected savings. Greshin promised to provide those by the end of the day yesterday, and he was scheduled to meet today with the staff of the Joint Fiscal Office. JFO analysts have been unusually critical of the administration’s plan. Privately, they have expressed bewilderment at the lack of data underlying its financial projections.

The first day of the special session ended the way it began, with neither side showing any sign of budging from its position.

Gov. Phil Scott held his weekly press conference at Mamaya, Inc. this afternoon and announced a $2 million investment by DRM client Bank of America in the Vermont Community Loan Fund.

Downs Rachlin’s Government and Public Affairs professionals help the state’s critical industries to achieve key objectives involving government, the press and the public. For more information about this Legislative Update, please contact Tricia Augeri.

John Hollar | Trey Martin  | Joseph Choquette III | Lucie Garand | Rebecca Lewandoski

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