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The tax commissioner pushed back Wednesday on questions raised by fiscal analysts about the Scott administration’s five-year plan to save $300 million in school spending and keep property tax rates at fiscal year 2017 levels.
Republican Gov. Phil Scott says the savings would come from changes to special education, teacher health care benefits and reducing school staff.
Analysts with the Joint Fiscal Office told lawmakers on Tuesday that they don’t understand how the Scott administration arrived at the savings total, and can’t vouch for the numbers because the governor’s office did not share their assumptions with the nonpartisan legislative research arm.
Special education cost reductions, for example, were double-booked, and there were other “major technical errors” that led analysts to conclude that the numbers are off by $100 million to $160 million.
Tax Commissioner Kaj Samsom appeared before the House Ways and Means Committee to announce that the governor’s office is redrafting the plan based on the Joint Fiscal Office critique, but he refused to provide specifics to lawmakers. Instead, he said forecasts are expected to be variable: “No one, in marketing this plan, has said ‘we guarantee these savings.’”
Samsom defended the governor’s original plan, which he said in a worst case scenario could still produce significant savings. He urged Democratic lawmakers to get on board with the cost containment plan before the end of the legislative session, which is set for Saturday.
“If we took from yesterday’s JFO testimony even the most bleak estimated savings that goes down by $100 million to $160 million that still leaves icing on the cake that is in excess,” Samsom said.
Jason Gibbs, chief of staff for Scott, has said the administration uses a different method of calculating the savings. What that method might be has not been shared with the Joint Fiscal Office or the Legislature.
Rep. Janet Ancel, chair of the panel, said they need solid figures to have a productive discussion and because the Legislature and the administration “are a long way” from agreement on the numbers, it will be difficult to find a path forward.
“If the outlook continues to change hourly and daily it is hard to have that discussion,” Ancel said.
The primary conflict is now over the use of $58 million in one-time money to buy down property tax rates. The gap would be carried over into 2019 and JFO projects the hole will grow to $68 million to $98 million.
“The heart of the issue is whether it’s appropriate to use one-time funds to stop a tax increase,” Samsom said.
The tax commissioner said it is appropriate to buy down property tax rates this year, as long as the money can be repaid. He said the Scott administration proposed a credible way to do that.
But Ancel said the governor’s proposal was “speculative” and “based on assumptions that nothing weird will happen such as health care costs tripling.”
Rep. George Till, D-Jericho, said the Scott administration’s savings were “fictitious.”
“There are other things in play which I don’t see you guys account for, like Act 46,” Till said. “I agree there may be special education savings down the line, but I don’t know how much we can count on that. I guess I just feel like these are overly optimistic projections which are pretty classic around here and I feel skeptical.”
Ancel says when taxpayers voted for school budgets on Town Meeting Day they did so with the knowledge they were going to see a significant rise in the state’s average rate and that amounts to consent.
“Would they be happy if they didn’t go up? Of course, but are they expecting to have rates stay flat? I don’t think so, and I think that is another fundamental difference” between the position held by lawmakers and the Scott administration, Ancel said.
Rep. Kurt Wright, R-Burlington, said lawmakers would like to go home and he wanted to know if the Scott administration could see a way forward.
Samsom said he is optimistic about striking a compromise with lawmakers.
Outside the Montpelier bubble, he said Vermonters don’t care about how late a plan is or even about using one-time money — they just care about the size of their tax bill.
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