Despite aggressive pushback from House and Senate Democrats, Gov. Phil Scott is not backing down from a five-year education plan that he says will level fund property taxes and reverse years of school spending deficits.
In fact, Scott is willing to keep the Statehouse doors open for as long as it takes to fully vet his proposal and come to an agreement with the Legislature. He has suggested that lawmakers stay in Montpelier into June.
“There are only two possible outcomes for Vermonters right now: We can work together in Montpelier on a plan to prevent a property tax rate increase while introducing long term stability into the system, or we can burden Vermonters with a $60 million dollar education tax increase,” Scott said.
Both the House and the Senate have approved legislation that increases property tax rates to fill a $58 million hole in the education fund. The gap is the result of the use of one-time money to artificially lower rates last year and an unexpected increase in special education costs.
At his weekly press conference on Thursday, Scott intimated he isn’t asking for much from lawmakers, he himself, has worked into June before, he said. Besides, it may not be necessary to keep the whole body around while a compromise is negotiated.
“If you really wanted to do this and you wanted to do what’s right, you could send most of the Legislature home for a couple weeks … keep the appropriate committees here to work on this,” Scott said.
Scott has threatened to veto the budget, tax and a dozen other bills that he says raise taxes and fees. Senate leader Tim Ashe has said that he will not schedule a veto session in the event that the governor makes good on that threat. That means the governor would have to call for a special session, which giving lawmakers an opportunity to start over with legislation they deem important. In a veto session, legislators can only take up bills that have been vetoed.
Lawmakers have complained that the governor’s plan, which was unveiled Tuesday, was delivered too late in the game.
Scott complained that it wouldn’t matter when it came out, “I think there would just be a knee jerk reaction that they weren’t interested in looking at it.”
“They just need to take the time, take a look at this, take the politics out of this, and let’s get to work,” the governor said.
The plan uses $58 million in one-time money from a tobacco settlement, revenue surpluses and other sources to plug the hole. The Legislature fills the gap by increasing property taxes by 5 cents for homeowners and 7 cents for non-residential property owners.
The governor’s proposal effectively carries forward the deficit to next year, but pays the money back over time through cost savings initiatives over the next five years.
On Thursday, Scott made it clear he won’t budge on using one-time money to keep property taxes level with last year. That, however, is the part of his proposal many lawmakers can’t abide.
“I have been clear since December, I will not accept a statewide property tax rate increase because Vermonters can’t afford it and it does not respond to our annual challenge [rising property taxes],” he said.
The commissioners of tax and finance took heat from money committees in both chambers for the late introduction of the plan.
Rep. Janet Ancel, D-Calais, chair of the House Ways and Means Committee, says voters already agreed to a tax increase on Town Meeting Day.
Scott admitted tensions are high in the building and timing is everything at this point in the session, but he argued his plan is comprised of ideas that have been previously considered by lawmakers.
“I think we should take the time needed to make sure we don’t increase nearly $60 million in taxes,” he said.
Scott said he wants to end the practice of plugging holes in the education fund with one-time money each session and that is why he sees this as a loan with a five-year payback plan.
“I’ve been critical of using one-time money when there is no cost saving money on the other end,” he said.
Scott seemed more open to altering pieces of his proposal that incorporate work by the Legislature regarding Act 46 school district consolidations, special education and a statewide healthcare benefit for teachers.
“On the plan itself there might be areas where they find more savings, maybe it’s a three year plan versus a five year plan. If they have an idea, it is time to talk about it,” Scott said.
The only piece of the Scott plan that wasn’t being actively considered by lawmakers has to do with staff-to-student ratios in schools. The statewide average for all workers is 1 to 4.25, but the Agency of Education created a new average of 1 to 5.15 that excludes contract workers, special educators and prekindergarten staff. The administration wants districts to adopt a 5.40 ratio by 2020. The ratio goal would be 5.75 by 2025.
The administration has estimated that the state will save $32 million in aggregate in 2020 if school districts don’t rehire one out of five staff members when they retire or leave teaching.
That is the largest pot of “repayment money” on their list. But they aren’t going to force districts to lower staff-to-student ratios with a mandate.
Last year, Scott pressed for statewide negotiations for teacher health care, but Democrats refused to move collective bargaining form local districts. Instead, they enshrined into law benefit levels they hoped school boards would negotiate with local unions. The state reduced payments based on those figures. The hoped-for savings, however, didn’t materialize.
“It does remind me a bit of the compromise last year,” Scott said. “We were assured we would receive all the benefits in the revenues from the health care savings and we did not.”
Lawmakers say there is no way to know whether a recommended ratio threshhold would produce savings, either.
Speaker of the House Mitzi Johnson, D-Grand Isle, said the plan is vague at best. “He has booked savings and said we are going to get here by this point, then doesn’t say how,” Johnson said. “There are no steps between we are going to have a task force and we are going to save $32 million in budgets starting in December. I think that is a problem.”
Adam Greshin, commissioner of the Department of Finance and Management, says the plan features a significant reorientation of assets that will ultimately enable the state to save $300 million in K-12 public school spending and invest savings in early childhood education and higher education.
“If [the savings] don’t materialize, that will serve as a cushion to make sure that we are repaying our debts,” Greshin said. “So the hope is that the payback will occur and we’ll have additional investments. But there’s over five years a $300 million cushion that we can use to make sure we are repaying.”
Greshin said the Agency of Education would work with individual districts to achieve long-term vacancy savings. To fill voids in academic expertise, teachers would be asked to switch specialties. A social studies teacher would be asked to become a science teacher, for example.
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