The Vermont House failed on Wednesday to advance a budget bill designed to avoid a state government shutdown. The Republican minority blocked immediate action on the bill, and Republican Gov. Phil Scott signaled he would likely veto it.
The bill would essentially pass almost all of the budget Scott previously vetoed — except for the school funding provisions to which he objected. It passed the House Appropriations Committee on Tuesday; action on the House floor Wednesday would have required a rules suspension, to which House Republicans did not agree.
Scott continued to insist on his school funding plan, including the use of $44 million in onetime money to keep property tax rates level and a package of measures designed to rein in school spending. Those include higher student-to-staff ratios, statewide bargaining of teacher health care benefits, reforms in special education funding and further consolidation in the public school system.
If there's no budget in place by July 1, the start of the new fiscal year, state government would be forced to shut down. Citing the ongoing standoff, House Democratic leaders put together a budget that omits the areas of disagreement and would lift the pressure of a July 1 deadline. "Vermonters are not well served by a shutdown, or by the possibility of a shutdown," said Rep. Janet Ancel (D-Calais), chair of the House Ways and Means Committee.
The Appropriations bill includes a provision to keep homestead property tax rates at current levels. In the absence of legislation before July 1, the state would have no legal basis for setting a homestead tax rate — which would create a $400 million hole in the state's education fund. Nonresidential property tax rates would automatically increase, under existing statute, by 5.5 cents.
If the almost-budget were enacted, lawmakers could continue negotiating with the administration on the use of onetime money, school property tax rates, cost containment measures and the legislature's desire to make a $34 million payment into the state's teacher pension fund.
"We thought, perhaps naively, that this [bill] would be uncontroversial," Rep. Kitty Toll (D-Danville), chair of the House Appropriations Committee, said in a Wednesday afternoon meeting with the House Republican caucus, citing the governor's own statements that there was only one issue remaining — his school funding plan.
Her hopes were not without foundation. The bill passed her committee on a unanimous vote with one member absent. But on Wednesday, the bill ran into a Republican buzzsaw.
First came a statement from the administration that shrouded a veto threat in convoluted language. "We’ll need to look closely at the language of their proposed budget to ensure it does, indeed, remove or address all the necessary levers that impact our current areas of disagreement," wrote Scott spokesperson Rebecca Kelley.
Those "levers," to disentangle her prose, include that increase in non-residential property tax rates — an apparent-no-go for the governor.
House leaders hoped to win a suspension of normal rules so they could hold a floor vote Wednesday. That requires a three-fourths vote, which means gaining the consent of House Republicans. But when they held a caucus, numerous objections were raised.
"This bill could potentially prolong the special session," said Rep. Jim Harrison (R-Chittenden). "If the governor vetoes it, we'll just have to come back again."
Rep. Anne Donahue (R-Northfield) floated a conspiracy theory: "If this passes, [the majority] won't do a thing." She wasn't the only Republican to suspect that the Dems might walk away from the unresolved issues and leave the governor hanging. That notion raised some Democratic hackles.
"I consider myself a trustworthy person, and I would not say I'm going to do something and then not do it," said Toll.
When they returned to the floor, House Republicans voted unanimously against a suspension of the rules, which means the bill can't be taken up by the House until Friday.
House Speaker Mitzi Johnson (D-South Hero) said her caucus will move ahead with the bill on Friday, even though it's clear that hopes of breaking the partisan deadlock have been dashed and a gubernatorial veto looms in the near future.