From left, Secretary of Administration Susanne Young, Commissioner of Finance and Management Adam Greshin and Commissioner of Taxes Kaj Samsom
Updated at 7:39 p.m.
Gov. Phil Scott on Tuesday proposed using eight distinct pots of money to hold down property taxes in 2019, and unveiled a plan he says would cut school spending and keep property taxes level for another five years.
The governor wants lawmakers to approve the two-part package during the final two weeks of the legislative session.
To find the $58 million needed to avert a property tax increase, Scott would turn to one-time expenditures. Nearly $20 million would come from an unexpectedly large tobacco settlement, much of which lawmakers have already allocated to other programs. The administration is also counting on another $20 million in expected surplus revenue, and it wants to borrow $7 million from the state’s general fund reserves.
Tax Commissioner Kaj Samsom told reporters that transfers from the general fund to the education fund would be paid back over five years.
Still, House Speaker Mitzi Johnson (D-South Hero) and Senate President Pro Tempore Tim Ashe (D/P-Chittenden) expressed skepticism about relying on such a large amount of one-time funds.
“We worked long and hard to make sure that one-time money was not being applied to ongoing expenses," Johnson said. "That’s the kind of practice that got us into a lot of trouble."
“The Senate, for sure, will have to think long and hard before it uses $58 million of one-time [money] to artificially buy down rates for one year, knowing what the alternative uses of those dollars could be,” Ashe said. He did, however, suggest that the Senate would be open to using some one-time money to compromise with the governor.
Legislators turned to such funds last year to resolve a standoff with Scott, who unsuccessfully sought statewide health insurance negotiations for teachers. That use of one-time money is partially responsible for the 2019 tax increase that officials are now trying to offset.
The cost-cutting portion of the governor’s proposal hinges on increasing student-staff ratios in schools, which the administration says would save $262 million over five years, but it doesn’t offer a mechanism to ensure that happens. Last week, Scott proposed imposing tax penalties on districts that don't meet the ratio, but he has since backed off that idea. Tuesday, his administration proposed simply creating a task force that would strategize with local school districts this summer about how to achieve higher ratios.
Commissioner of Finance Adam Greshin said the administration is confident it can achieve the savings, stating, “These are pretty conservative numbers.”
Anticipating lawmakers' criticism that the administration is again dropping a major proposal at the tail-end of the session, Secretary of Administration Susanne Young emphasized that many of the proposals in the governor's plan aren’t new.
“We’re very enthusiastic about the fact that we have drawn on bipartisan ideas,” she said.
Questioned about whether increasing student-staff ratios could force some schools to close, Young acknowledged, “it very well could be closing some schools and merging more schools physically.”
The other proposals include, once again, creating a statewide teachers’ health insurance contract and changing how the state distributes special education funding — two steps the legislature was already considering. Scott’s plan would also lower the excess-spending threshold — which penalizes high-spending school districts — and change a program that allows people to pay taxes based on income rather than home value.
Senate Education Committee chair Phil Baruth (D/P-Chittenden) suggested the governor's plan was unrealistic given the time remaining. “We’re already up to our necks with two of [the proposals] and we only have two weeks left. So adding ratios and the excess spending — adding those, I think, begins to push it into the realm of more than human beings can accomplish in two weeks.”
At the end of the day, Senate Democrats convened to discuss Scott’s proposal. It did not go over well.
“To go through this a second year in a row? It’s not right,” said Sen. Dick Sears (D-Bennington).
Sen. Mark MacDonald (D-Orange) suggested that the proposal to buy down property taxes was counterproductive to the governor’s own goals because it would insulate voters from the impact of their school budget decisions. “It’s blowing the system up,” he said.
“It’s absurd that we would even begin to look at this at this point,” Sen. Dick McCormack (D-Windsor) said, adding later, “I’m going to put this in my summer reading file.”
Sen. John Rodgers (D-Essex/Orleans) called the late-stage unveiling “horse hockey.”
“Don’t fall into the political trap,” he warned his colleagues.
Taylor Dobbs contributed reporting.
Disclosure: Tim Ashe is the domestic partner of Seven Days publisher and coeditor Paula Routly. Find our conflict-of-interest policy here: sevendaysvt.com/disclosure.