Just one month ago, lawmakers, lobbyists and reporters covering the Statehouse were complaining about how boring the legislative session had been. Sen. Mark MacDonald, D-Orange, a veteran lawmaker, likened the inactivity to the “Do Nothing Congress,” a term coined by President Truman in the late 1940s.
Things were moving so smoothly lawmakers were sure they could leave a week early. Remarkably, the House approved its budget with only one member voting no; the Senate slam dunked their own version unanimously.
Both chambers had heeded Gov. Phil Scott’s loud-and-clear message in January that any new taxes or fees to balance the budget would draw a swift veto. A special session? Legislative leaders held out that idea for the fall to deal with possible massive budget cuts from Washington, not because of a dispute in Montpelier this spring or summer.
The sleeper session abruptly turned stormy on April 25 — two weeks before lawmakers had hoped to go home early — when Scott rolled out a plan to capture savings from an upcoming change in health care insurance plans for all the state teachers. The state could save $26 million and keep teachers largely whole, Scott said, if a statewide health insurance deal was cut with an 80-20 split on premiums. At the announcement, school board members stood by the governor and said they often felt outgunned by the teachers’ negotiators.
Many Democrats and the teachers union cried foul, arguing Scott was violating a fundamental part of collective bargaining, where teachers negotiate salary, health insurance and other benefits with their local school districts.
They said the proposal came too late in the session, though administration officials insist legislative leaders were told back in February a plan was being considered and forthcoming. All of the health plans are up for renewal at the same time and are being changed to avoid the “Cadillac tax” in the Affordable Care Act. Scott called the opportunity “once in a lifetime.”
Scott’s original idea called for giving teachers $49 million of the $75 million in expected savings to beef up their health savings accounts. He wanted a chunk of the remaining $26 million to go to property taxpayers, with the rest for the general fund and to pay for teachers’ retirements.
The plan appeared dead with Democrats holding bloated majorities in both chambers. (Just as his January budget proposal calling for communities to level fund budgets and increase teachers’ share of premiums from an average statewide of 12 percent to 20 percent had been summarily rejected.)
However, the governor’s April proposal gained major traction May 3 when the House voted on it and a chunk of Democrats — pitted with the Sophie’s Choice between the union or property taxpayers — ditched one of their core constituencies and voted with Scott. The measure almost succeeded; House Speaker Mitzi Johnson, D-South Hero, had to step down from the podium to vote and create a tie, killing the amendment. She faced questions and criticism about why she had let the measure even come up, including grumbling by Senate President Tim Ashe, D/P-Chittenden.
Johnson defended her style, which she characterized as more democratic, less authoritarian than previous House leaders like Shap Smith or the notorious Ralph Wright, who always kept the troops in line.
The House vote and the Democratic cleavage it exposed further emboldened the Scott administration. Lawmakers, including veteran Democratic Sens. Dick Sears, D-Bennington, and Jane Kitchel, D-Caledonia, readily conceded the popular Republican governor has the public on his side.
“Oh yeah, he’s got the public behind him,” Sears said during a break with Kitchel late Thursday morning, while upstairs the latest round of talks between Ashe, Johnson and Scott had ended.
It’s a different world outside the Montpelier bubble, Scott’s people say, and some Democrats admit. On May 11, the night of the Vermont Corporate Cup 5-kilometer run race in downtown Montpelier, the streets were packed. A former longtime lawmaker, a Democrat, said he watched with awe as the crowd kept encouraging Scott to stick to his guns with lawmakers, who were just hundreds of yards away inside the Statehouse.
As he had at the beginning of the session over new taxes, with the health care proposal, Scott again drew a hard line in the sand. Unless lawmakers found a way to find a guaranteed $26 million, he’d veto the state budget bill.
Hopes of an early adjournment faded. The following week, a deal again looked like it could happen.
Then, this week, a third week of negotiations, hopes raised, hopes dashed, no resolution reached, an early Friday morning adjournment by weary lawmakers.
The negotiations went poorly, pretty much from the start. Democrats accused the governor of being inflexible and “moving the goalposts.” For example, at one point Johnson said Scott brought up putting limits on teacher salary increases over fear the health care savings would be lost. On Friday, Scott denied bringing teacher pay into the talks. Johnson said raising the issue of teacher salaries was, in her view, another example of the “whack-a-mole” tenor of the talks with a governor she said was hard to pin down.
The Scott administration points at the Democrat leadership for negotiating unfairly and say they “poisoned the well” in the days before adjournment with strong public comments, particularly Johnson’s. The administration also maintains they were actively considering the leadership’s latest offer when they declared “an impasse.”
There was clear friction between Ashe and Johnson in the final weeks, a division Scott noted. Several times, the legislative leaders presented their own individual proposals to the governor, not joint offers, as has been typically done. When Peter Shumlin ran the Senate and Shap Smith was speaker of the House, they would disagree in private but present a united front when negotiating with the governor. At one point, Ashe, who was reluctant to make public comments because he said he did not want to negotiate through the media, would not even comment on Johnson’s latest proposal.
Former Senate President John Campbell said he benefited greatly his first year working with Speaker Smith, already experienced at the endgame.
“Those last days, if you’re not sure what you’re doing, it’s nice to have someone to fly your ideas by,” Campbell said.
Both Johnson and Ashe are in their first years as leaders of their chamber. It’s also Scott’s first term.
“Oh well, this is what happens with new leadership,” a longtime lobbyist told two diners eating lunch outside at J. Morgans on Wednesday, as the weather grew noticeably warmer and the temperature inched higher inside the Statehouse.
Scott on Friday also mentioned that all three negotiators being in new roles made negotiations more difficult.
Despite the applause, handshakes, hugs and warm words as the clock passed midnight on Thursday and the Legislature adjourned soon after, the underlying tension continued after the gavel went down.
Late Friday morning, just hours after the session concluded, Speaker Johnson accused the governor of “petulance” in his negotiations with the Legislature.
In the end, Democrats felt they went as far as they could. Their plans, they say, would have achieved the savings Scott was looking for, but Johnson claimed the governor seemed more intent on getting his way. Ashe questioned why collective bargaining was mixed up with the budget. Changing something so significant should go through legislative committee review, Ashe argued. The unions accused Scott of union-busting tactics like those used by Wisconsin Gov. Scott Walker, a charge that administration dismissed as ridiculous.
“We’ve put out easily three or four different ideas, and none of them are his and so they have all been rejected,” Johnson said Wednesday when she and Ashe declared an “impasse” had been reached with Scott.
The Democrats note they even agreed to a commission to study whether a statewide health care contract makes sense, what some loyalists might view as camel’s-nose-under-the-tent betrayal. Agreeing to that was a big step, Democrats said, and made it part of the proposal they passed early Friday.
And how, some Democrats wonder, can the governor hold up a state budget, particularly one balanced without new taxes and fees, for a proposal that’s not a part of the nuts and bolts of running the government.
“I feel like my child is being held hostage,” Rep. Kitty Toll, D-Danville, exclaimed just outside the cafeteria at the Statehouse on Thursday afternoon as the negotiations continued. Toll is chair of the House Appropriations Committee, which developed the House budget. Her sister, Sen. Kitchel, led the Senate budget-making effort.
All Thursday afternoon, there were moments where a deal appeared imminent. Sources said the two sides came close. For the third week in a row, it looked like the end might finally come.
“It was frustrating on both sides because we were so close,” Scott told reporters Friday afternoon. Some observers wondered Thursday why Scott didn’t take Johnson’s last offer, declare victory, and see if she had the votes to win the support of her own chamber. One senator, Jeanette White, D-Windham, blamed Scott’s staff for the source of the governor’s adamance on his plan.
From the administration’s view, they offered lawmakers a way out, offering to have the negotiations done by someone other than the administration: an independent commission, or a group of local school board members. They say they offered to make state-level negotiations temporary, not permanent. The Democratic leaders said anything that moved the negotiations from the local level was a non-starter.
Scott administration officials say lawmakers just don’t get it. The public is demanding the savings. The Democrats’ plans, they say, wouldn’t have maximized the savings. Democrats disagree. Ashe told fellow senators a week ago he never thought the budget would be held up over a collective bargaining issue.
Unlike past disputes, where an amount of money could be compromised, a program delayed or a study commissioned, this dispute appears more black and white: Scott says the best way to negotiate the health insurance savings is collectively. Democrats and unions are fighting hard to preserve the individual way contracts have been negotiated until now.
The governor had signaled privately during the week and stated publicly Friday that he won’t let the new fiscal year start on July 1 without a state budget, but the prospects for negotiations between now and late June when lawmakers plan to return are unknown, at best. In theory, Scott will get the most he can, agree to a budget, and blame lawmakers for missing out on any savings.
Late in the negotiation, lawmakers put two of Scott’s priorities, a $35 million housing bond, and the creating of more tax increment financing districts, into the budget, to force him to veto those favorites too.
On Friday, Scott said he wanted to work out something before a special session starts and dismissed Johnson’s strong criticisms.
The governor suggested the Democratic leaders “get a little sleep, catch up and maybe see things a little bit differently next week.”
“I think I can win on the merits,” Scott said, adding “maybe with a little time outside the building, the leadership will come to a different conclusion” than what they’ve believed so far.
Scott said he plans to go ahead with the veto, meaning lawmakers will have to return and try and find a path to thread a compromise on the teacher health care issue.
Their special legislative session is scheduled to start June 21, the first day of summer.