Despite a veto possibly coming down the pike, the Senate on Wednesday passed out its version of Vermont’s $8.2 billion budget. H.740 passed on a voice vote, with a smattering of “nays” from Republicans.
The Senate will now have to reconcile its differences with the House, which passed its spending plan in March. But their biggest obstacle to finishing their work in time for an early May adjournment will be Gov. Phil Scott, who has indicated he is spoiling for a showdown over the budget and a pension deal brokered between lawmakers and unions.
Spending plans proposed by the governor, House and Senate share many key priorities. All, for example, would invest a huge portion of Vermont’s last American Rescue Plan Act dollars on climate, clean water and broadband. The Senate’s version of H.740 includes $95 million for broadband, $205 million for climate initiatives (including $80 million for weatherization) and $94 million for clean water.
But lawmakers and the governor remain at odds over housing and economic development. Scott and legislative leaders alike want to spend big on a housing-first approach to build more homes across Vermont — but lawmakers have argued money flowing to developers and landlords should also be attached to consumer protection measures the governor opposes.
Lawmakers have also nixed key economic development priorities asked for by the Scott administration, including $50 million for the state’s capital investment program.
Scott argues his proposals put one-time dollars to good use, and would invest in initiatives that pay dividends in the future. Democrats in the Legislature, he counters, are focused instead on “government systems.”
“We must take full advantage of this once-in-a-lifetime opportunity to grow the economy, revitalize communities and make Vermont more affordable for workers, families and those who create jobs,” he said during a press conference Tuesday.
Indeed, lawmakers have taken advantage of a higher baseline of revenues to invest in certain long-neglected areas of state government. The Vermont State Colleges, which faced a financial crisis at the outset of the pandemic, would see a $10 million increase to their annual appropriation under both the House and Senate plans. (The Senate has also offered an additional $15 million one-time bump to pay for reforms.)
And while the governor had proposed to increase reimbursement rates for the state’s community-based mental health agencies by 3%, the House offered 7% — and the Senate ticked up to 8%.
“Those agencies said: ‘In this day and age of increasing operating costs and wages and shortage, 3% is actually putting us even more underwater,’” Senate Appropriations chair Jane Kitchel, D-Caledonia, said at a Wednesday press conference. “And demands are great.”
Legislative leaders have said there’s no way they’ll reopen the pension deal. But Senate President Pro Tempore Becca Balint, D-Windham, said she’s ready to negotiate with Scott to get a spending plan in place to fund the government.
“We’re going to get to yes, we always do, we’re going to figure it out, we’re going to stay engaged with the executive branch, and we will pass a budget,” she said.
