The House and Senate will be asked to return Wednesday and Thursday to negotiate and vote on budget and tax deals. The Legislature had planned to leave a week early; the additional days next week are covered in the current budget.
At issue is a disagreement over a plan to reduce property taxes.
Gov. Phil Scott and Democratic lawmakers are at odds over a proposal to take over teachers health care negotiations.
Scott insisted in a press conference on Thursday — as he has now for two weeks — that he will not budge on the issue. The governor says statewide bargaining is the only way to ensure that an estimated $26 million in savings from health care insurance costs for teachers can be translated into a reduction in the statewide property tax.
While the governor has not used the word veto, he has said he will not “walk away” from his plan, and he alluded Thursday to vetoing the budget if the Legislature doesn’t give him what he wants.
Democratic leaders House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ashe say the $26 million in savings is going to happen anyway because of a change in teachers health care plans. They say local school boards can negotiate with teachers and achieve the same savings. Johnson and Ashe accuse the governor of interfering in labor negotiations.
Johnson took aim at the Senate, which she says didn’t come to the negotiating table on Friday. Ashe blamed the governor for floating a major policy proposal at the bitter end of the session.
There is also an ongoing dispute between the House and the Senate over moving the cost of moving $8 million in teacher retirement costs from the General Fund to the Education Fund. Johnson says the House is concerned that the shift will raise property taxes and came up with funding to support the change. The Senate didn’t respond to the proposal Friday.
“Without the negotiating partners with the Senate on the budget, and a very hard line from the Senate and the governor on some key issues, we need a little more time and we’ll continue to work things out to do the best we can,” Johnson said.
Earlier in the week, a House amendment that would have implemented a statewide teachers contract for health care failed only because Johnson cast the tie vote, effectively killing the measure. That means the House likely doesn’t have the votes to override a veto.
Ashe says the governor’s statewide teacher health care proposal puts the Legislature in a box because there is too little time to vet the impact of the plan.
“I don’t think we’re at a place to sign the budget and tax bills at this point,” Ashe said.
The pro tem said the Scott “campaign” is using the $26 million as a big, shiny object to galvanize constituents outside the Statehouse, but that estimated savings is already built into the health insurance transition plans offered by the Vermont Education Health Initiative, an independent group that provides insurance for teachers.
The Scott administration wants to use the health insurance shift as a vehicle for changing the collective bargaining process, Ashe said.
“We hope to avoid that route,” Ashe said.
On Wednesday, Ashe and Johnson floated a proposal they said would allow school districts to continue negotiating health care benefits with teachers and allow the state to collect any savings. The plan swept up any local savings into the Education Fund. The House version of the proposal then morphed into a grant program.
Scott said the House plan didn’t create a mechanism for guaranteeing savings.
“The governor clearly doesn’t like what the House did, but we haven’t seen a counter proposal,” Ashe said.
A statewide teachers contract for health care would be problematic, Ashe said. There is no guarantee that the estimated $26 million in savings could be achieved any more easily through negotiations with the governor’s office, he said, and it allows teachers to engage in a statewide strike.
The Scott administration, Ashe says, has not included the Vermont NEA in the discussions and “that doesn’t bode well for future negotiations.”
“We’re worried about a statewide strike over health care,” Ashe said.
Rebecca Kelley, communications director for the governor, says a survey of business managers across districts shows that schools aren’t budgeting the savings “despite the claims that the savings will materialize organically on a district-by-district basis.”
“The goal of his proposal is to maximize the savings of a change in teacher health plans that’s occurring this year – which the Vermont Education Health Initiative estimates to be up $26 million while keeping teachers whole,” Kelley said in a statement.
“If the Senate felt the savings were ‘going to happen anyway,’ why didn’t they account for those savings when they set higher property tax rates than the House and the Governor’s recommend?” she wrote.
The Vermont NEA doesn’t want what happened with teacher retirement to happen with teacher health care, according to Jeff Fannon, head of the union.
“We are mindful of the fact that the state for many years underfunded the teacher retirement system so much so that we are $75 million in the hole now. I don’t think we should entrust the state to potentially do to health insurance what it has done to teacher retirement all in the name of eviscerating collective bargaining,” he said.
House plan to fund $8M teacher retirement shift
Rep. Kitty Toll, the chief budget negotiator for the House, floated a plan Thursday that would shift the $7.9 million in current retiree costs to the education fund without increasing property taxes.
The proposal involves reducing an annual transfer to the education fund from the general fund related to the Community High School of Vermont, an education program in Vermont’s prisons, and funding for adult basic education.
The House also cuts $2 million out of the general fund appropriations in the Senate version of the budget. The House proposal would reduce a $4 million appropriation to the Vermont State College system by $1 million ongoing, and lower an increase to the childcare system by $500,000 to $2.5 million.
The rest of the money ($4 million) in fiscal year 2018, would come from a settlement with Volkswagen and the sale of a Redstone, the former Secretary of State’s Office in Montpelier. In fiscal year 2019, the one-time money would be replaced by sales tax collections.
Editor’s note: This story was updated at 8 a.m. and 10 a.m. and 2:30 p.m. May 6. Elizabeth Hewitt contributed to this report.
