Editor’s note: This article updates the specifics of the spending deal and the position of the parties involved in negotiations.
[G]ov. Phil Scott has agreed in principal to sign a property tax rate increase this year in exchange for contingent funds to pay down rates in 2020, according to lawmakers briefed on the deal with Speaker of the House Mitzi Johnson, D-South Hero.
The outlines of the deal — negotiated by administration officials and House leadership — are also laid out in document distributed to lawmakers.
The compromise would break a deadlocked special session that began on May 23, and prevent a government shutdown on July 1.
However, it remained unclear Friday whether Senate leader Tim Ashe, D/P-Chittenden, and fellow senators were on board.
The governor also would not commit to supporting the proposal after changes were made to the initial agreement.
The proposed House amendment would adhere to rates set in a Senate budget bill passed unanimously on Thursday, which keeps property tax rates stable at $1.50 and sets non-residential rates at $1.58, a 4.5 cent increase on last year, according to lawmakers.
The administration has agreed to those rates in exchange for allocating contingent revenue to pay down those rates in 2020. Most of that revenue has not been officially recognized, but the administration’s financial analysts are confident it will be in state coffers.
In total, the deal forecasts $28.3 million in contingent surplus revenue, subject to change.
Scott agreed to a deal to split that money 50/50 between the education fund to pay down taxes in 2020 and a teachers liability pension fund.
That proposal was later revised to divide that money three ways after Ashe opposed the even split. Scott did not commit to the revised amendment during a visit to the Statehouse to meet with the Republican caucus Friday night, saying he wanted to see the final proposal from the Senate.
In the revised amendment, one pot of money would go toward paying down property tax rates in 2020, the governor’s priority; another would go toward teachers pension liability, a Democratic priority; and the third would go toward a spendable reserve in the general fund, a concession to Senate leadership.
During weeks of back and forth over the budget, the governor successfully pressured legislators to use about $20 million in one-time money for paying down education property tax rates, but fell short of the $40 million he needed to fully buying down tax rates next year.
Scott has repeatedly pledged not to allow a tax rate increase in 2019, but he has also repeatedly said that fears of a government shutdown were unfounded because he would reach a deal with lawmakers before the budget deadline.
The initial deal was supposed to be publicly presented this afternoon at the House Ways and Means Committee, but was apparently delayed following the meeting between Johnson and Ashe.
The revised amendment was approved by committees Friday evening and presented to party caucuses after 8 p.m.
Ashe declined to comment on the first proposal following a meeting Friday afternoon with Johnson, and was not immediately available to comment on the revised amendment.
If the amended bill is approved in the House, it will have to go back to Senate for approval. Lawmakers have said they hope to have a new bill to the governor by Monday.
The governor has already vetoed two budget bills this session over built-in or potential tax increases.
The latest budget bill also includes some of the governor’s long-term savings proposals, such as a statewide teachers health care plan and the creation of a task force to work with school districts on reducing staff-to-student ratios.
