VT V(e)T(o) yo-yo

June 14, 2018

In my post ("One Time") from a couple of weeks ago, I laid out some of the attributes of the budget that passed the legislature (unanimously in the Senate; by a 117-14 vote in the House) in May.  It held spending increases to 0.5%, below the level of economic growth, per the governor's request.  There were some hard fought provisions in the budget, but the governor and legislature came to agreement on how much to spend and where.  It's good policy that earned support from the most conservative and most liberal legislators.

 

And yet Governor Scott vetoed this budget on May 25th because, he said, it increased property taxes for education spending.

 

Education spending is decided by neither the legislature nor the governor.  It is decided locally by school district voters.  And this year, voters overwhelming approved modest increases in school spending - far less than the governor demanded - with full knowledge that spending would result in property tax rate increases. The legislature's job is then to raise the funds approved by local voters through property taxes.


While previous governors have respected the decisions made by local school boards and voters on education spending, Governor Scott wants to expand his "no new taxes" mantra to the education property tax.  He would use one time funds in this year's General Fund to dump into the Education Fund to buy down property tax rates.  His plan would create a deficit in next year's Education Fund when that one time money is no longer there. The result would be a massive property tax increase next year.  (As I'm writing this post, the Pew Charitable Trusts and Route Fifty just issued a report on the dangers and pitfalls of using one time funds.)  In the budget the governor vetoed, the legislature proposed to use that one time money for reducing liabilities in Vermont's under-funded pension system.  That investment would generate a guaranteed $100 million in taxpayer savings over the next two decades.

 

The governor screwed up in vetoing the budget back in May.  There are a number of deep thinkers from across the state and ideological spectrum that are scratching their heads as to what Governor Scott is doing.  Ham Davis, a long-time Vermont journalist, wrote this piece in his Vermont Journal.  John McClaughry, the conservative stalwart for the Ethan Allen Institute, wrote this piece after the governor's veto.  Rebecca Holcombe, Governor Shumlin and Governor Scott's former Secretary of Education, wrote this piece.  Aki Soga, who writes for the Burlington Free Press' editorial page, chimed in with this piece.  This is just a sampling of analysts and commentators who see Governor Scott's disenfranchisement of local school boards and voters as a bad idea made worse by his use of one time funds to create a massive property tax bill which will come due in the future. 

 

With the governor's May 25th budget veto, the state of VT faces the real possibility of a government shutdown if the an agreement couldn't be reached on a budget.  On July 1st, that would mean the functions of state government -- paving projects, state parks, Dr. Dynasaur, mental health services, home health services, the DMV, etc. -- would cease.  Here's a brief memo from the legislature's Joint Fiscal Office on the subject.

 

With the legislature attempting to avoid a shutdown and to meet the governor half-way to hammer out a compromise, the House and Senate passed a second budget (H.13) last week.  This budget included the same appropriations from the budget passed back in May.  It also incorporated no increase in residential property taxes.  0%.  What was carved out of this budget was the use of one-time funds, as well as the establishment of the non-residential property tax rate.  The concept was, let's pass a budget that includes everything we can agree upon and take the issue of a government shutdown off the table.  With that crisis averted, let's figure out a way to come to an agreement on the use of one-time funds and the setting of the non-residential property tax rate.

 

BREAKING NEWS:  Tonight the governor vetoed the legislature's latest budget and attempt to find common ground.  It's a stunning act of brinksmanship that has become commonplace in Washington, DC, Madison, Wisconsin, and Springfield, Illinois.  But in Vermont?  Remember the Phil Scott who pledged to get things done "The Vermont Way"?  To work with all parties to find the best solutions?  Where did that guy go?  Ham Davis posted another piece on his blog today examining that question.

 

This evening, the Speaker of the House and the Senate President Pro Tem put out a joint statement that read:  "Let us be clear about what the Governor vetoed today when he rejected H.13:  (1) A budget supported by virtually every legislator including members of his own party  (2) Approximately $30 million in income tax reductions to avoid negative effects of the Trump tax plan  (3) Significant reductions in the taxation of social security income  (4) A level residential education tax rate.   The Governor supports all four of these measures. The bill would guarantee there will be no government shut down. It does not increase a single tax rate, nor does it include anything the Governor opposes. The bill reflects movement by the Legislature toward the Governor, while the Governor has not made a single concession. The Governor's veto is disappointing. We expect more from the Governor."

 

As I search for understanding of what the governor is trying to do with his veto-brinksmanship strategy, I succumb to a dark conspiracy theory that is hard to ignore.  The governor's insistence on the use of one time funds will put us in a "crisis" as we head into 2019 Town Meeting.  And here, I fear, is what the governor is really after.  His use of one time funds would create a $40-$60 million hole in education funding next year which will result in huge property tax increases.  The governor will then insist on massive cuts in local school budgets along with his grab bag of policies (aka: mandated teacher/student ratios) which disenfranchise local school boards/voters. This is a playbook that's been used around the country in red states.  I hope I'm wrong. I hope it's just a conspiracy theory.  But the governor is acting like, not only does he want government to stop functioning on July 1st, more ominously he wants to dispose of local control of education decisions and school board authority through a manufactured crisis in 2019.

 

 

With the legislature starting it's Special Session the week of Memorial Day, and having just attended the Norwich Memorial Day Parade (pictured to the right), I caught myself stopping for a look at a painting I go past literally hundreds of times each legislative session.  It hangs in the stairwell between the second and third floor of the State House and I see it as I head upstairs to the House Health Care Committee's hearing room.

 

 

 

This is a painting of George Fox, one of the immortal Four Chaplains.  Peter Gilbert the former head of the VT Humanities Council once did a VPR commentary on the Four Chaplains.  His recounting of their heroism best tells the story:

 

"In front of the handsome brick Methodist church in [Thetford Center], right beside the Village Store, is a new granite marker. It wasn’t there when I was in town last. I parked, walked over, and read the monument. It honors four heroes of World War II who became known as the Four Chaplains—two Protestant, a Roman Catholic, and a Jewish chaplain. They became fast friends in chaplain school; several months later, on February 3, 1943, they died when their U.S. Army transport ship, the Dorchester, was torpedoed in the North Atlantic. The ship went down in less than 30 minutes. Of the 902 aboard, 672 were

lost. After the chaplains had distributed all the life vests available, they gave their vests to others on board, and were last seen on deck, linked arm in arm in prayer. One eyewitness recalled, “It was the finest thing I have ever seen or hope to see this side of heaven".....The oldest of the four—Methodist minister George L. Fox—was from Thetford. When America had entered World War I, he had enlisted in the Marines at 17. Trained as an ambulance driver, he won a Silver Star on the Western Front for rescuing a wounded soldier from a battlefield full of poisonous gas—despite the fact that he had no gas mask. He stood just five feet seven; after Pearl Harbor, Reverend Fox enlisted in the Army the same day his 18-year-old son Wyatt, who survived the war, joined the Marines. The story is a powerful one, an inspiring one. What an awakening it was for me to learn that from the gentle town of Thetford came this noble man. I wonder, were those four men exceptional, or were they, as it were, ordinary men who exhibited the exceptional potential that we all possess? Which would be a greater tribute to them: for them to be remembered as so heroic as to be made of different stuff than we; or exemplars—inspirations—for us all, not of how to die, but how we might live? Perhaps that is what another clergyman, Reverend Martin Luther King, Jr. meant when he said, “Everybody can be great, because anybody can serve.”

A bat made an appearance during our debate on the budget.  This short video clip shows the bat swooping through the chamber.  In the background, you can hear Rep. Kitty Toll as she presents a section of the soon-to-be vetoed budget.

 

 

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