[A] Senate panel advanced one key revenue bill Monday evening but put off action on education finance legislation.
The seven-member Senate Finance Committee unanimously passed the miscellaneous tax bill, H.516, which raises about $5 million through increased compliance with existing tax laws.
Such harmony does not exist around the other major fiscal legislation in the committee, in part because of a proposal in the 2018 budget that passed Senate Appropriations late Friday shifting an $8 million expense into the education fund.
The version of the miscellaneous tax bill the committee OK’d Monday has not changed substantially from the legislation the House approved last month on a unanimous vote.
While the tax bill moves ahead, the delay in the education finance bill, H.509, leaves a hole for now in the state budget.
The Senate Appropriations Committee voted out a $5.83 billion budget last week, adding in several initiatives that were not in the House version and funding the difference in part by shifting an appropriation related to teachers’ retirement into the education fund.
The proposal would cease to use money from the general fund to pay an annual contribution into a retirement fund for currently employed teachers. This year the appropriation is $7.9 million.
Members of the Senate Finance Committee, however, bristled at the proposal.
The change in funding for teachers’ retirement, along with other changes in the Senate’s education finance bill, would result in higher property tax rates than the House passed.
During committee discussion Monday, members were tepid about raising property taxes to accommodate the teacher retirement piece from the budget.
Committee members raised concerns about shifting a financial responsibility of the state onto other entities, like property tax payers.
Sen. Ann Cummings, D-Washington, chair of the committee, acknowledged Monday evening that there is concern among her colleagues about the impact of the proposal.
“You don’t put cost into the ed fund lightly,” Cummings said.
However, she said, paying for Vermont’s education system has been taxing on the state’s resources and has had an impact on other parts of state government.
Meanwhile, members of Gov. Phil Scott’s administration and Senate Minority Leader Dustin Degree, R-Franklin, urged the committee to consider a proposal the governor has put forward to have the state handle negotiations with teachers over their health care benefits. Scott pitched it as a way to capture savings for the education fund.
Secretary of Administration Susanne Young sat in Senate Finance on Monday and was expected to speak, but Cummings told her that at this stage any proposal would need to be brought to Senate leadership first.
“We’ve got a day to figure out how to either not fund the appropriations bill or to raise property taxes,” Degree said. “If there’s a third way, which I think the administration has identified … I think we at least owe them the opportunity to be given a chance to present that to the full Finance Committee.”
Cummings said legislators had not yet seen a fleshed-out version of the administration’s teachers’ health care proposal.
“It sounds like the governor wants us to agree to it before he proposes it,” she said.
Meanwhile, Sen. Mark MacDonald, D-Orange, the vice chair of Senate Finance, said the pitches from the governor and the Appropriations Committee were coming in too late.
“Both of these proposals should have come out in February,” he said.
Senate Finance will reconvene Wednesday to resume discussion of the education funding bill.
“I don’t know if it’ll take a cattle prod or finesse,” Cummings said.
The committee, while approving the miscellaneous tax bill largely unchanged, did add language from a separate bill concerning tax increment financing districts, which was initially included in S.135. That bill passed the Senate last month but has not advanced in the House.
Sen. Michael Sirotkin, D-Chittenden, told fellow committee members that he is considering offering a floor amendment that would use a 35-cent fee on hotel room stays to fund a $35 million bond to develop affordable housing. The housing bond was initially proposed by the governor.
