Politics

Legislative leaders criticize Gov. Scott’s promised veto

Gov. Phil Scott
Gov. Phil Scott speaks to reporters Friday following the Legislature’s adjournment. Photo by Mike Dougherty/VTDigger

Democratic leaders of the Vermont Legislature criticized Republican Gov. Phil Scott on Friday for planning to veto the state budget and the property tax bill because they had not reached a deal on teacher health insurance.

Just hours after they adjourned, the leaders said the veto threat puts the state at risk of a government shutdown on July 1 — if they can’t reach a budget deal by then — because the Vermont Constitution requires the Legislature to pass spending bills in order to run the government.

For the time being, Democratic lawmakers said, they have directed their caucuses to get some rest and take some time off before coming back to negotiate.

Meanwhile, Scott sought to assure Vermonters that he would not allow a shutdown, even if it meant giving in somewhat to lawmakers.

House Speaker Mitzi Johnson, D-South Hero, said she had no immediate plans to get members back to the negotiating table on teacher health insurance. She said members put their personal lives “on hold” while they delayed adjournment twice to negotiate with Scott.

She said the governor was guilty of “petulance.”

“I don’t want to underestimate the effort that all members of the Legislature have been shuffling their lives,” Johnson said. “We’re going to have to catch up on our lives, and we will be back to conversations and back to the negotiating table but as of now we don’t have any plans.”

Senate President Pro Tempore Tim Ashe, D/P-Chittenden, said he has instructed members to take the weekend off and get sleep. He said some members of the Senate could go back to the negotiation table as early as next week.

“Obviously, knowing the governor has said he would veto the property tax bill and the budget, we know we’re coming back for a veto session, so it would be good to have a few days to have people let the emotions settle and come back to the table,” Ashe said.

Lawmakers adjourned shortly after midnight on Friday. Johnson and Ashe were negotiating with Scott into Thursday evening, but they eventually declared they could not reach a late-night deal and had the Legislature adjourn.

Lawmakers scheduled a return for a special session for June 21 and 22.

Scott has vowed to veto the budget bill, H.518, and the education property tax bill, H.509, if lawmakers did not move negotiations for teacher health insurance from the local level to the state level. On Friday, both Johnson and Ashe remained critical of the governor’s negotiating strategy.

Mitzi Johnson
House Speaker Mitzi Johnson, D-South Hero. Photo by Erin Mansfield/VTDigger

“I am really not interested in Washington-style politics up here,” Johnson said. “I think the whole concept of threatening to veto a budget … because he didn’t get what he wanted on a different bill is stooping pretty low.”

Johnson said the legislative budget “did not depend on any new taxes and new fees, nothing. It has for our state funds a 0.7 percent growth rate, and in terms of all funds it’s a 1.3 percent growth rate, so that puts it well below our gross state product of 2percent, and our revenue projections of 3.5 percent.”

Scott told the Legislature he would veto the budget before the ink was even dry. “He hasn’t even looked through it,” Johnson said. “He hasn’t really taken the time to really read it and understand it, and that’s not governing. That’s petulance.”

Steve Klein, the executive director of the Joint Fiscal Office, said government services would not be funded past July 1 without legislative action. That’s because of a section of the Vermont Constitution that says, “No money shall be drawn out of the Treasury, unless first appropriated by act of legislation.”

Klein said there are some technicalities that would allow some funding — such as allowing the treasurer to make bond payments — but the Legislature would still need to pass something to provide government services.

“We don’t want that to happen, and there’s lots of ways you can avoid it. You can pass one-twelfth budgets or one-quarter budgets, or whatever,” Klein said. “I don’t think it’s going to happen.”

Kitchel and Ashe
Sen. ​Jane Kitchel, D-Caledonia, chair of the Senate Appropriations Committee, with Senate President Pro Tempore Tim Ashe, D/P-Chittenden. Photo by Erin Mansfield/VTDigger

On Friday afternoon, about 12 hours after the Legislature adjourned, Scott called a brief press conference where he said first off that he would not allow a government shutdown.

“For those Vermonters who are worried come July, I want to assure everyone we will have a budget on July 1,” Scott told reporters. “This isn’t D.C. and I will not shut down state government over this issue.”

Scott pointed to the broad goals he laid out for his administration when he took office in January — to make Vermont affordable, to grow the economy, and to protect vulnerable people. “I will not jeopardize one issue for another,” he said.

Ashe called it “pretty disturbing” that Scott was holding up the budget bill over teacher health insurance because funding for the program is not in the budget, H.518. Lawmakers nonetheless did put a counterproposal on teacher health care into the education property tax bill, H.509, before passing it Thursday night.

“State government would shut down” without a budget on July 1, Ashe said. “I hope that even before we get there the governor will back off that veto threat because it destabilizes so much,” he said.

Ashe pointed to parts of the budget that increase funding for the Vermont State Colleges and increase pay for mental health workers at quasi-public nonprofit organizations, among other things. “All those things are now in limbo,” Ashe said.

Johnson said negotiations broke down on Thursday evening after the House and Senate agreed to a new step toward a teacher health insurance deal, and Scott turned around and asked for another step in his direction.

“The House and Senate came back and said ‘We can do this; we’re ready,’ and he said he couldn’t,” Johnson said. “We found something that we could agree on and the governor backed down and said ‘no.’”

Scott said he would not comment on the previous 48 hours because he considered it an ongoing negotiation. But he provided reporters with a timeline of how the teacher health insurance issue came about, and said his administration has been negotiating “in good faith” the whole time.

The governor described his negotiating tactics. “My style is just to get whatever we can,” Scott said. “I go in with a thought. I have to believe in what I’m trying to negotiate. And in this case, I’m negotiating on behalf of the taxpayers of Vermont.”

“I think that the merits of this proposal would be beneficial for us and something that I’m not willing to go home without, and I’ve said that numerous times,” Scott said. “I think it’s worth the effort.”
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  • John Freitag

    Democratic leaders deserve credit for passing a budget that kept within the parameters of no new taxes and fees requested by the Governor. However they did not address major long term budget needs including the clean-up of Lake Champlain or underfunded pension funds. These are obligations that have to met.
    This is why the Governor’s effort to go to statewide negotiations for teachers health benefits and use the considerable savings for property tax relief and other needs is so vitally important. Unless we have some revenue, like these savings, the legislative leadership virtually guarantees that they will be requesting increases in taxes and fees. This will happen as early September in a special session after the implications of the new federal budget are known or next year when these unmet obligations will need to faced.
    The Governor is correct in vetoing a budget, which while a definite improvement, leaves out the opportunity for critical savings that will be absolutely necessary in the near future.

    • Victor Stagnetti

      Why didn’t Scott introduce the plan earlier if it is so genius and vitally important?

      • Mary Reed

        As I followed Digger, I recall Governor Scott making it clear very early on that he wants Statewide healthcare negotiations. State employees have always had such negotiations, and the healthcare coverage for them has long been very good and affordable. Statewide negotiations for teachers hold the prospect of good coverage at the best rates possible, avoiding the ‘pitting of one district against another’, and a savings for the educational portion of property taxes. The claim that this is ‘union busting’ has no more validity than claiming that Statewide healthcare coverage negotiation for State employees is an effort to undermine VSEA – that dog just won’t hunt.

        • Victor Stagnetti

          Where did he make that clear? I can’t find any references to statewide healthcare negotiations before his press conference on April 25. I found some articles from earlier in the year (February) that said Scott’s administration “wants teachers to pay 20 percent of health care premiums starting July 1.”

      • Carol Frenier

        He only took office in January, and he has been talking with stakeholders about this since February. It’s arguable that he has been working on this really fast in an effort to take advantage of this one-time opportunity.

        • Victor Stagnetti

          He took office in January but didn’t announce his proposal until April 25. Which, according to Digger, was two weeks before lawmakers were expected to finish early, or three weeks before they had scheduled to go to (as far as I can tell, at least). How did it take him 3 months to come up with such a simple plan?

          If he really had been working on it for months, like you said, he should have known that lawmakers would also want time to review the many implications of such a proposal. Until I hear or see an explanation for why he waited so long to make his proposal, or if you can show me that he did make the proposal earlier than April 25, things just don’t add up.

    • Dave Bellini

      All the Governor is doing is taxing teachers. All those millions aren’t growing on trees. It’s a tax, dressed up as some health plan gimmick. How can everyone be “held harmless” but generate $75 million dollars…? Someone is paying the $75 million dollars.

      • Adrienne Raymond

        The plans that are offered starting 1/1/18 have less expensive premiums. Why? VEHI does not need to collect as much in premiums because they will not be required to pay out as much. Why? Because not as high a percentage of health care cost is covered. To address that fact, school districts are offering HSA’s and/or HRA’s to pay the additional out-of-pocket (OOP) expenses- holding teachers harmless to the average OOP of $400. VEHI does not need to plan to cover as much cost and the actuarial models show that when people are paying out their own money first they are more careful consumers of health care dollars. This allows savings overall that do not impact teachers’ overall health care expense. Simple math. That said, to predict those savings beyond a couple of years is unrealistic as it will depend on actual health care expenses. I certainly think it is worth the effort to try to take advantage of the timing of this and go to statewide healthcare for educators.
        Even if the savings are not as great in coming years the fact that it will be a statewide expense will take some of the budgeting volatility out of local budgets. This can happen when more than a few folks change plans from year to year or new hires take higher cost plans than those they replace. A win worth talking about, in my opinion.

        • Dave Bellini

          “… more careful consumers of health care dollars.”
          Thank-you Adrienne for showing me where the “savings” are coming from.
          It seems very unlikely there could be $75 million shaved off claims because of utilization. Who did the math Peter Shumlin?
          Can you tell me what $75 million represents as a percentage of annual claims? Is there some wild anomaly cost driver unique to teachers? It sounds similar to outrageous statements made by the former Governor about future “savings” that always proved false later on. In a zero sum game I don’t see how this is possible.

          • Adrienne Raymond

            No need to be snarky. The first years of the new plans have already been priced- locked in- but as I said, after that actual healthcare spending will affect ongoing premiums. VEHI actuaries depened on studies of how HRA/HSA accounts bend the spending curve- there is definite evidence that they aim people strongly towards generics, for example. These plans were not designed by folks that just threw a dart to come up with premiums and to be fair, they didn’t guarantee these premiums would stay as low. But, they did base their advice on real historical numbers- no matter how you try to spin it. VEHI does not exist to lose money, but to help schools and education system employees save money on their health care.

          • Dave Bellini

            Adrienne – “price locked in” ?? Are they switching to a fully insured product? That’s the only way to get a price lock. If they are still self insured there can’t be a price lock.

          • Adrienne Raymond

            Premiums are set for 2018. If more healthcare dollars are needed, as in the trust was suddenly insolvent because of a massive increase in use, yes, the trust members would need to provide an influx of cash. Pretty unlikely scenario. Maybe a discussion with VEHI would be helpful…..

          • Jim Manahan

            Yes, the wild anomaly cost driver unique to teachers is the Cadillac health plan that they enjoy, which costs a lot more in premiums than the plans that the rest of society has, as a result of the ACA. Their will be additional healthcare system savings through decreased utilization, where an informed consumer says I don’t need that unnecessary Dr. visit or this extra test now that I know I might have to pay for it instead of someone else. When those decisions are made then utilization drops, when utilization drops, then premiums drop. Actuaries do that math every day and the $75 million as a percent of annual claims is easily calculated.
            Making this move is a smart, no-brainer decision for anyone concerned about the burden on taxpayers.

          • Edward Letourneau

            The unions have rejected concept of an 80/20 cost split (between the boards and teachers) and a split 80/20 of the savings. So tell the truth, what they really want is the taxpayers who don’t have such benefits paying more so teachers get even more. Its called feeding at the public money trough.

      • tom Johnson

        It is not a tax..teachers in each school district hold school boards hostage with an always looming threat to strike. Teachers are no longer under paid nor working in mines, woolen mills etc. They no longer need the right to strike nor do they need to have taxpayers subsidize their tuition reimbursement, HSA, and a pay matrix can provide a teacher a 22% raise in 2-3 years. Teachers can get relicensed by earning hours and not by only taking college courses. However, taxpayers pay for the course, when they earn say 15 credits, they get a $2000 salary increase. Check out Vt. digger story written by Dr. Robert Levosky, Economic Professor at St. Michael’s college in Colchester. https://vtdigger.org/2015/02/03/robert-letovsky-teacher-salary-grids-driving-unsustainable-school-budgets/

      • Matt Young

        Dave Bellini, you should disclose your union ties when going to bat for them

      • Steve Baker

        How is it pay tax to ask teachers to pay a little bit of the road benefits?

      • Jim Manahan

        I realize you know it is not taxing teachers, when they still get their healthcare benefit plan, just like they always have. The $75 million is called cost savings and it’s embarrassing that you mischaracterize that; as the head of the State Employee’s union, you should know better than to intentionally misinform. Perhaps you don’t recognize that the gimmicks are within the proposed plans that the union and the legislative leaders are backing, where they maintain the NEA’s dishonest negotiating advantage. Why not advocate for an honest and level playing field for negotiations, rather than the divide & conquer approach we have now? You can be sure that any business or organization able to generate savings of $75 million in the provision of healthcare to their employees, would not be returning almost $50 million to the employees. Saving money on healthcare premiums is not a tax and no one is paying the $75 million, but you already know that. This is not some magic number that the teachers are owed by the taxpayers. The teachers negotiate for healthcare coverage, not some pie in the sky number.

      • Linda Kuban

        Yes, but taxes on what I earn is more fair than property tax

  • Jay Eshelman

    How do headlines sometimes misrepresent reality? Is it true, for example, that:
    AT&T STRIKE MAY CLOSE RETAIL STORES THIS WEEKEND [?]

    No, of course not. What is true is that a:
    ‘STRIKE MAY CLOSE AT&T RETAIL STORES THIS WEEKEND’

    I hope the mundanity of the above subject matter allows readers to carefully consider the reality of concealed points of view. In the above case it may simply be a matter of poorly stated semantics. But consider the following with regard to another headline.

    LEGISLATIVE LEADERS CRITICIZE GOV. SCOTT’S PROMISED VETO
    “…the leaders said the veto threat puts the state at risk of a government shutdown on July 1”.

    So…is a veto ‘PROMISED’ or is it a ‘threat’? Is Governor Scott putting ‘the state at risk of a government shutdown’ or is the state legislature doing so by being fiscally imprudent?

    Is it significant enough to report that legislative ‘members’ put their personal lives “on hold” when the legislative session is extended for a short period of time? What about the lives of the Vermont taxpayers affected by these shenanigans for the entire year?

    The Governor is being ‘Petulant’? Really?… …moved to or showing sudden, impatient irritation, especially over some trifling annoyance:
    Trifling annoyance?

    If I could afford it, I’d donate a couple hundred Patriot football team t-shirts to our legislators, the executive branch, their appointees and the press, that boldly exclaims:

    DO YOUR JOB!

  • Neil Johnson

    This budget could have easily been 5% less than the current proposal. We could improve all services at the same time. To suggest otherwise is to say that Vermont is perfect and we are perfectly efficient and frugal, which most would agree might be a stretch.

    It’s easy to spend more money and raise taxes. We have zero prioritization and are truly wasteful. To suggest that the governor is the one being unreasonable is ludicrous.

  • Tom Sullivan

    It’s interesting that just back in 2014, the VEA was making the push towards transitioning Vermonters including teachers to a statewide health insurance plan (single payer). The VEA donated funds to Peter Sterling’s advocacy group “Vermont Leads” who is now Senator Tim Ashe’s chief of staff to spearhead the effort. But now, Democratic lawmakers oppose Governor’s Scott’s plan which asks lawmakers to similarly create a single health insurance contract for all Vermont teachers. It makes me curious that If Phil Scott were a democrat or a progressive, would the senate and house leadership be singing a different tune?

    • Tom Sullivan

      Rather, the VEA and democratic lawmakers were making the push towards transitioning Vermonters including teachers to a statewide health insurance plan (single payer). sorry for the typo

  • Ned Pike

    There is but one simple reason why the Legislature did not agree to Gov. Scott’s perfectly rational proposal. It is because the current Leadership in both Houses is soully owned (and I meant that spelling) by the NEA because of the $$ poured into VT Democratic candidates by the NEA.

    The NEA understands that statewide negotiations drastically reduce their power to use pattern bargaining to extort Cadillac plans out of districts whose taxpayers are lucky to be driving a 1990-something Subaru or a 1970-something truck. They purposely strike Essex or South Burlington or Stowe and then use that “settlement” against Whiting or Coventry or Halifax. Do they dare strike the entire State over healthcare??

    That’s the MacGuffin. They call it union-busting. I call it economic efficiency. I wholeheartedly agree with Gov. Scott. Spare me your sanctimonies, but the one class that never shares in the pain of economic downturns is the teacher class.

    In my perfect world VT teachers are State employees. By statute and contract, State employees are forbidden from striking at the pain of their job.

  • Gerry Silverstein

    Speaker Johnson referring to the Legislative budget notes that “It has for our state funds a 0.7 percent growth rate, and in terms of all funds it’s a 1.3 percent growth rate”.

    Speaker Johnson cast the tie-breaking vote in the House that would have started the process for allowing a Statewide negotiation on teacher health insurance contracts, as opposed to having that responsibility continue with local School Boards. Speaker Johnson and Senate Pro Tempore Ashe then argue for legislation that would have placed the burden for obtaining healthcare insurance savings on local School Boards.

    Let’s compare the above with what the School Board in South Burlington (SB) is facing in their negotiations with the teacher’s union (SBEA). The final position of the SBEA before impasse is declared is SB taxpayers and the State of Vermont (through its contributions to the SB school budget via income sensitivity “prebates”) will:

    (1) pay 100% of health insurance premiums for ALL teachers and 100% of All out-of-pocket healthcare expenses incurred by teachers, and

    (2) will provide salary increases averaging 4.89% for EACH of the next 3 years.

    In addition the SBEA has asked for an additional float holiday in addition to the multiple holidays they already receive, the multiple one week vacations when school is not in session, and their 2 month summer vacation.

    Finally, I would be remiss if I did not mention the SBEA would also like SB taxpayers and the State of Vermont to fund a 403b retirement plan (that would be in addition to the State-funded pension they get when they retire).

    To Speaker Johnson and Senate Leader Ashe I ask this question: How does a local School Board deal with a union that makes the aforementioned “demands”? The union has already struck once when their demands were not met, and I have little doubt they will strike again if a contract is imposed upon them that they find unacceptable (to them that is, not to most people including, possibly, some/many of the teachers they supposedly represent).

    Overall, I do not think the House and Senate leadership has profiled Vermont’s commitment to frugality and sustainability, at least as regards spending in the public education arena. Failing to contest the unreasonable demands of powerful unions and the individuals and organizations that “lobby” on their behalf is not a plan that will benefit Vermont in the long run.

    • Steve Baker

      Johnson has no answers! When in doubt…raise taxes. Same story

  • Keith Stern

    Phil Scott is taking the opportunity to go after easy pickings with the much maligned teachers who are constantly criticized as being underworked and overpaid. I have had published in VTDigger.org a healthcare plan that not only saves money for every healthcare policy holder but for taxpayers as well without putting a burden on public sector employees. The governor is more than welcome to my plan and begin meaningful efforts to make Vermont more affordable.

    • Matt Young

      Keith, asking teachers to pay a small portion of their health insurance deductibles doesn’t seem unreasonable to most people. It’s difficult for Vermonters to digest paying for a union employee Cadillac plan that they themselves do not enjoy.

      • Keith Stern

        I’m not making the point that they should pay more or less of their health insurance. Let the individual towns decide what they can afford and let the governor focus on the waste in government and look at making changes to the way business is conducted now. Would you rather settle for a few dollars in taxes or rather have a health insurance policy that is around 40% less and save in tax dollars as well?

        • Matt Young

          If we are going to “let individual towns decide what they can afford” then we should let individual towns decide on school choice, school funding, regulations and a host of other issues. You can’t have it both ways, either you believe in local control or you cave to the big public education monopoly.

          • Keith Stern

            I don’t believe in having federal and state departments of education but see where members of school boards getting together whether in person or through the internet and discussing ideas and questions would be very beneficial. School funding is tricky because without a way to help fund education in poorer towns it will suffer.

          • Jason Brisson

            Truth!

    • Jim Manahan

      I have not seen where the teachers are “much maligned” or have ever been accused of “being underworked and overpaid”. That kind of intentional misinformation doesn’t help their cause, however it is what we’ve come to expect from their supporters here and in the legislature.

      • Keith Stern

        I guess we read things differently. I constantly see comments talking about all of their time off throughout the year, how they make more than the average income, and them always demanding more.

        • Jim Manahan

          I see an occasional comment, but certainly nothing constantly berating them. However you must acknowledge they do have an inordinate amount of time off throughout the year, certainly much more so than someone working a full-time job, and I don’t think anyone disputes that fact. The last I checked teacher’s were under contract for something like 177 days a year, whereas someone working a full-time job is up in the neighborhood of 260 days a year. I don’t know what “the average income” is, but they certainly have preferential retirement benefits in a defined benefit plan along with lifetime healthcare benefits that a vast majority of taxpayers are without.

          • Keith Stern

            So is the solution to extend the school year, make the teachers do some other work when school is not in session, or lower their pay? It is a special set of circumstances for teachers and that has to be accepted. No one is preventing anyone from becoming a teacher and “reaping the benefits”. At the end of the day it is a tough job and that has to be considered.

          • Jim Manahan

            The solution to what – stopping comments regarding their inordinate amount of time off? Sure it’s special circumstances and certainly it can be a tough job, but so are there special circumstances and tougher jobs for many other professions. If you think teaching is such a tough job, try being an LNA or a PCA for a day, or a custodian, or a chef in a sweltering kitchen, or a snow plow driver in a blizzard, or any of a number of other tougher jobs.

          • Edward Letourneau

            On top of that, high school teachers can only be told by the boss what they have to do for 3.5 hours a day. The other 4 hours they are paid for is up to them to decide what they do. — Name another job anywhere, where the boss can only assign the work for 3.5 hours, bu has to pay for 7.5. It like the featherbedding railroad unions insisted on until the railroads went bankrupt.

    • Edward Letourneau

      Nonsense. This democrat law requires schools to cut 13 million in costs, that must be sent to the state. It will not cut taxes, and its a give-away to the teacher unions.

  • Tim Vincent

    “Petulance”, according to Mitzi Johnson, meaning “refusal to bend over for the unions.”

  • Steve Baker

    What else do the Democrats have?
    What else can the Democrats do?
    Ashe Johnson and Kitchel have lost control of the rubberstamp in the executive office.
    Time for a little tax relief this decade !

  • Homer sulham

    “I am really not interested in Washington-style politics up here,” Johnson said.
    It seems that the Vt. house is playing Washington politics, not the Governors office.

  • Jim Ackerman

    Mitzi Johnson is not interested in “Washington politics”. And just like the. Rest of the liberals / progressives under the dome, she also isn’t interested in the fiscal health of this state or the tax burden the working class is saddled with…