[H]ouse Republicans rallied to uphold Gov. Phil Scott’s second budget veto of the session, crushing Democratic hopes of an override and sending lawmakers and Gov. Phil Scott back to the negotiating table with just 11 days until a government shutdown.
The budget bill will be kicked to the Senate for the next round of committee meetings. The Senate appropriations chair said she hoped to have another budget passed out of committee and sent to the full chamber by Thursday.
Leading up to Tuesday’s override vote, rumors and speculation had been swirling about whether Republicans would have the votes needed to protect Scott’s veto. The GOP ended up with exactly 51 votes, which was more than they needed.
Democrats, Progressives and independents ended up with 90 votes in support of an override, falling short of the two-thirds majority required to negate gubernatorial vetoes. One independent, Rep. Terry Norris, of Shoreham, voted with 50 Republicans.
The governor vetoed the latest budget over what he described as a “backdoor tax increase,” not because of anything written into the bill, but because it did not have language ensuring a level nonresidential property tax rate.
If the rate is not set by statute, it will default to the statutory level of $1.59 — a 5.5 cent increase over this year’s average rate. Democrats refused to add language setting a level tax rate out of concern that they would lose their leverage in ongoing negotiations with the governor.
After the bill was shot down on the House floor Tuesday, Democrats criticized the governor and Republicans for being willing to draw out the risk of a shutdown.
“There has been tri-partisan support for the underlying budget and it is irresponsible to use our state budget as a pawn,” Rep. Kitty Toll, D-Danville, who chairs the House Appropriations Committee, said following the vote.
“Vermonters rely on government for many aspects of their lives and we have let them down today,” she added.
Democrats also blasted the handful of Republicans who flipped their votes on the budget bill when the governor’s veto power was on the line.
“It’s discouraging that some House members would flip-flop for no good reason,” Senate President Pro Tem Tim Ashe, D/P Chittenden, said in a joint statement with House Speaker Mitzi Johnson, D-South Hero.
“They support literally everything in this bill. If they want to shut down government and trash our public schools, well then I guess they sent their message loudly today,” Ashe said.
House Republican Minority Leader Don Turner reiterated ahead of the vote that leaving the nonresidential default tax rate on the table would eliminate the GOP’s leverage in future negotiations.
He said the caucus would have voted enthusiastically to pass H.13 if lawmakers had set a lower nonresidential tax rate.
“We are in a position here right now, we have to get this done and there is no need from my perspective to raise property taxes,” he said.
Turner added that Republicans aren’t willing to take Democrats at their word that negotiations on tax rates will happen in a separate bill because the legislative majority has presented “no compromise” since the special session started last month.
“We haven’t seen any negotiations in the last six weeks,” Turner said. “Actions speak louder than words sometimes. We’ve been out of session now for over four weeks … there’s been no compromise.”
Democrats point out that the budget bill includes several steps in the governor’s direction. The proposal would have left residential property tax rates level and set aside the $34.5 million in surplus funds the governor wants to harness to buy down taxes next year, for example.
The budget bill included most of the initial budget and tax proposals that were passed last month with broad bipartisan support, while leaving out provisions in the few areas where agreement has been elusive. The proposal was pitched as a spending compromise that would alleviate fears of a shutdown while the governor and lawmakers hammered out a deal on the most divisive issues.
But it didn’t work, and with less than two weeks to go until the budget deadline, Democrats are going to move everything into one bill, including the issues that have proven most troublesome.
“Within the time frame we are working in, I would anticipate what we are going to do is one bill,” Sen. Jane Kitchel, D-Caledonia, chair of the Senate Appropriations Committee, said after a brief Senate session Tuesday afternoon.
Kitchel said the bill would allocate the $45 million in one-time money, set tax rates for the coming year, and possibly include a statewide teacher health care plan backed, in theory, by both the governor and Democratic lawmakers.
Although tax bills are supposed to originate in the House, legislative leaders are saying that H.13 is primarily an appropriations bill that will include some tax provisions. Typically, budget and tax legislation are kept separate.
The Senate appropriations, finance and education committees will begin joint meetings Wednesday morning, Kitchel said.
Kitchel does not expect the bill would use one-time money to keep tax rates level. The governor has refused to sign legislation that allows rates to increase and has insisted that the Legislature use one time funds to buy down rates.
“No, I don’t think we’re prepared to say that the third budget will simply be agreeing with the administration’s proposals,” she said.
There has been another significant change in the dynamics of the dispute since the governor vetoed the second budget bill last week. On Friday, Scott met with Johnson and Ashe for the first time since the special session began a month ago.
Ashe and Johnson have pledged to only negotiate in public, and both said on Tuesday that their meeting with the governor did not qualify as a negotiating session.
“It wasn’t a discussion of details or policies or anything other than just the kind of value you get when you see each other’s faces and recall that once we get through this we have to keep working together,” Ashe said. “But it didn’t move the needle toward a resolution to this.”
Johnson and the governor also met privately on Thursday, without any staff, according to her chief of staff, Katherine Levasseur.
“It is not unusual for leaders of each branch of government to meet privately,” Levasseur said in an email. “The meeting was not a negotiation; rather, a conversation in which the Speaker encouraged the Governor to sign H.13 and pledged to continue to work toward compromise on outstanding areas of disagreement.”
