Despite expressing concern for weeks over the Legislature’s proposal to spend millions more state dollars in the next three months, Republican Gov. Phil Scott on Wednesday signed into law this year’s mid-year budget update.
The Budget Adjustment Act, or BAA, is an annual affair which balances the state budget through the conclusion of the current fiscal year on June 30. This year’s bill, H.839, was shaped by hot debates over state aid to flooded municipalities, the future of the state’s emergency motel housing program and concerns over giving private organizations direct access to public after-school program funding.
Scott signed the spending plan into law Wednesday afternoon, he said in a press release, “because of important initiatives included, some of which are time sensitive.”
“However,” he said, “I’m deeply concerned this bill exceeds my proposed budget adjustment by almost $15 million. As the House Appropriations Chair has said herself, this leaves a $15 million gap in the fiscal year 2025 budget.”
At a press conference Wednesday before he signed the bill, Scott pointed reporters to the House Appropriations Committee’s discussions on Tuesday. The House panel has until March 22 to craft its first draft of the fiscal year 2025 budget — or, as lawmakers often refer to it, “the big bill.” After a House floor vote, the bill will head to the Senate, then almost assuredly a conference committee to reconcile the two chambers’ differences.
“It was interesting — maybe a little frightening, as well — when they started coming to the conclusion that we don’t have any money,” Scott told reporters. “The $15 million that they have added to BAA is going to impact the budget itself, the big bill. So they were all over the place on that, and wondering where they were going to come up with $15 million without cutting other programs that we desperately need.”
Rep. Diane Lanpher, D-Vergennes, who chairs the House Appropriations Committee, confirmed to VTDigger in a Wednesday evening phone call her committee will have to square up a $15 million difference. The distinction between the approaches, she said, is that the Governor’s Office allocated all of the state’s $29 million revenue upgrade to Fiscal Year 2025, whereas House and Senate budget writers settled on spending roughly half of it in the current year, via the BAA.
“It’s not worth really fighting about who spent it first and then who decided to spend it second. That seems really ridiculous to me,” Lanpher said.
Nonetheless, the committee is now metaphorically looking for change in the couch cushions, Lanpher said. Members have a worksheet detailing state programs that have money left over from last year and are questioning whether they need another full top-off this year. But eliminating state programs wholesale, she said, is not on the table.
It’s familiar territory to Lanpher, a longtime state budget writer.
“It is a difficult time,” she said. “And I’m glad that I have been through many difficult budgets before he was governor, two governors before him. It’s hard when you have to make hard choices, both for him and for us, and for Vermonters, and we must work together.”
The other option for balancing next year’s budget — raising new revenues with higher taxes — remains a nonstarter for Scott.
Asked by a reporter if he would change his stance with state program reductions on the table, Scott harkened back to his own administration’s budget proposal, presented to lawmakers in January. The plan increased state spending across the board by roughly 3.6% and did not raise taxes or fees.
“So I stand firm: I think we tax enough,” Scott said. He pointed to last week’s Town Meeting Day elections, in which nearly a third of school budgets were rejected by voters amid concerns over dramatic property tax increases.
“That’s unheard of in Vermont,” Scott said. “So we’ve got a problem on our hands.”
Scott quipped that if he had vetoed the budget adjustment, perhaps he would have been “doing (legislators) a favor by giving them extra time.”
“These are going to be tough, tough decisions,” Scott said. “We had to make them early on and I, in my budget address, I tried to put a fine point on that, how difficult this year was going to be because there just isn’t any money.”
“Many here seemed to be in denial,” Scott added. “At least now, I think it’s coming to fruition. They understand the complexity of the problems we’re in.”
