Gov. Peter Shumlin is inserting himself into the legislative budget and tax process at the 11th hour.
The governor, sources say, doesn’t like the Senate Finance or House tax bills and he wants the Senate Appropriations Committee to find $10 million to $15 million more in spending reductions.
Lawmakers have spent months scrutinizing the options for filling a $113 million gap in spending, and the Senate is scheduled to vote on the tax and appropriation bills this morning (Thursday).
Shumlin pulled Sens. Jane Kitchel and Tim Ashe, chairs of Senate Appropriations and Senate Finance respectively, into the ceremonial office late Wednesday afternoon. Neither senator would talk about their meeting with the governor. And administration officials wouldn’t give specifics about the governor’s alternative tax and spending proposals.
But sources with knowledge of the negotiations say the governor hates the tax bills from the House and Senate and would prefer to cut more from the budget.
The Shumlin administration will present Senate Appropriations with options this morning.
Senators in Senate Appropriations and Senate Finance Wednesday evening were keeping their cool, but behind the scenes there was frustration.
While it’s the governor’s prerogative to influence the legislative process and ultimately sign or veto the legislation, Shumlin’s down-to-the-wire timing perplexed insiders who say the governor has had four months to influence the budget and tax bills, and has not made a concerted effort to do so until now.
What especially rankles sources is the fact that the governor didn’t offer a proposal for solving a large chunk of the budget gap at the beginning of the session.
Shumlin’s budget addressed a $94 million gap. Five days after he released his budget, state revenue projections were downgraded by $18.6 million and the gap increased to $113 million.
At the time, the governor brushed off questions about the yawning hole in state finances and insisted that the House and Senate could figure it out. No plan from the Shumlin administration was forthcoming.
The House came up with a proposal at the end of March that resolved the $113 million problem with $53 million in cuts to state spending growth and $35 million in new taxes. Lawmakers used $24 million in “one-time” money to close the remainder of the gap.
The Senate proposals for state spending are nearly identical to the House version of the Big Bill.
There are also few differences between the House and Senate tax bills. Both cap income tax deductions and expand the sales tax to soda and candy. (The outlier is the $5 million so-called “TV tax,” that was approved 4-3 in Senate Finance.)
The House and Senate proposals, developed by the Democratic majority, are very similar, and that makes the end game tactics employed by a Democratic governor seem like particularly bad form. Some compared the maneuver to the governor’s failed attempt to eliminate a portion of the Earned Income Tax Credit without consulting lawmakers in the 2013 session.
“Disrespectful” was a word several people used to described Shumlin’s late-game tactics.
Senate President Pro Tem John Campbell took issue with that assessment.
“I would not characterize it as that,” Campbell said. “I think what happened today is basically just coming up with information where they found something that are areas that we might have inquired before but now they’re getting back to us and saying OK, yeah, here’s the information, and would you guys consider it.
“Now the one thing we’re not going to do, we’re not going to open the budget,” Campbell said. “If the governor said we want you to open the budget, that is what I would call disrespectful. That’s not going to happen.”
What could happen? A member of the Senate could propose floor amendments on behalf of the governor for both the Senate budget and tax bills.
“I wouldn’t take it as kill the tax bill,” Campbell said. “But I think what he’s doing is just like anybody else today. We went through the budget with the rest of the caucus and I wouldn’t be surprised if we have other senators actually come in and try to put forth a floor amendment saying this might be additional cost savings.
“I would just look at it from that point of view, is that here is another individual coming and saying, OK, we finally got this information, it does show that there might be some savings here and then to do it,” Campbell said.
The governor isn’t just another individual, however. Unlike members of the Senate, he can veto the budget.
And for that reason, the last-minute flurry of negotiations are freighted with angst. Shumlin, who has been weakened by Republican Scott Milne’s surprising near victory at the polls last fall, expended his political capital in the Legislature this session on a 0.7 percent payroll tax to salvage his much-diminished plans to reform health care. Both the House and Senate roundly rejected the payroll tax proposal that would have raised roughly $90 million to boost Medicaid payments to health care providers.
Campbell said it’s important to give the governor buy-in.
“It would be pretty hard to veto the budget when he comes in with some ideas,” Campbell said.
Editor’s note: This story was updated at 9:43 a.m. April 30.
