Lawmakers are only two weeks into the 2023 legislative session, but they’re already grappling with some big budget decisions.
Vermont Public’s Liam Elder-Connors talked with reporter Peter Hirschfeld about a nearly $300 million spending plan from the governor, and warnings about a potentially significant increase in property tax bills next year. Their conversation below has been edited and condensed for clarity.
Liam Elder-Connors: Pete, Phil Scott won’t deliver his budget address until next week, but his administration has already presented lawmakers with a significant spending proposal. What’s in the package? And how are lawmakers responding?
Peter Hirschfeld: Scott has presented lawmakers with what’s known as a budget adjustment proposal. We see a budget adjustment bill in Montpelier every year, and they usually consist of pretty small-scale mid-year revisions to the state budget that was passed in the previous legislative session.
What Scott’s calling for this year is definitely not small scale. All told, there almost $300 million in new spending proposals in the bill. They include $30 million for broadband, $9 million for inpatient psychiatric beds for youth. Scott wants more than $11 million to fund traveling nurses at the Department of Mental Health. And there’s also $3 million to help towns apply for federal American Rescue Plan grants.
Lawmakers are still vetting the governor’s plan. But the biggest concern I’m hearing so far centers on what’s NOT in the governor’s plan, and that’s money for emergency housing. Vermont still has about 1,500 households living in motels and hotels right now. A pandemic-era rental assistance program that helped more than 8,000 low-income Vermonters subsidize rent is expiring.
Lawmakers are seriously concerned about a spike in homelessness as these programs wind down. Waterbury Rep. Tom Stevens, who chairs the House committee that has jurisdiction over housing, says lawmakers will need to act with some urgency in order to prevent that from happening.
“The government has a history of letting things go. And to let housing go, especially emergency housing like this, would be a real detriment to the public health," he said. "It would be a real detriment to the people who are experiencing homelessness, and we don’t have a place to put them otherwise. We’re in the middle of a housing crisis as well.”
There's a good chance we'll see lawmakers add quite a bit of funding for emergency housing to the governor’s budget adjustment proposal. And it could set up an interesting early-session debate between lawmakers and the governor over a crucial public policy question.
Property taxes Pete are always an issue that’s top of mind for many Vermonters. Lawmakers heard testimony this week about what those tax bills might look like next year — what do we know so far?
We’re looking at some pretty eye-popping projections right now as it relates to school spending next year, and what that spending is going to mean for property tax rates.
Craig Bolio, who’s the commissioner of the Department of Taxes, told the House Committee on Ways and Means that as of now, the administration is expecting school budgets to rise on average by more than 8% next year. That figure could change of course as school boards finalize their budget plans. But if that estimate bears out, then we’re going to see the largest increase in education spending in at least a decade.
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And when education spending goes up, so do property tax bills.
There is some good news — this year’s education fund is expected to end the year with a $63 million surplus, and Scott wants to use that $63 million to lower tax rates next year. Bolio told lawmakers this week that if they don’t follow the governor’s advice, then bad things are going to happen:
“If the surplus is not used to buy down rates, we would be looking, or we were projecting in December, an 8% average increase in bills, which would be a large increase," he said.
There’s already a lot of consternation in Vermont about the size of property tax bills, and an 8% increase likely won’t come as welcome new to folks that pay those bills.
But there are schools out there that are in desperate need of facilities improvements, in need of increased resources to meet the needs of kids that are still struggling coming out of the pandemic. That $63 million surplus could be used to address any number of unmet needs in the education universe. How elected officials decide to use that money is going to be a really important policy question as the session progresses.
And looking ahead Pete, what should folks be looking out for in the Statehouse next week?
Next week is going to be a week of numbers — really big and really important numbers that will shape the course of the session ahead.
On Tuesday, lawmakers and the governor are going to get a revenue update from the chief economists for the administration and Legislature. Observers are expecting an upgrade in the state revenue forecast, and potentially a significant one. If that expectation bears out, then it could give the Legislature and the governor the financial wherewithal to fund some items that might otherwise go by the wayside.
Also on Tuesday, we’re going to get a report from the RAND Corporation that a lot of people have been waiting a long time to see. This report is going to tell us how much money Vermont will need to spend in order to make sure that no Vermont family spends more than 10% of its annual income on child care. Whatever that number is will guide deliberations on a child care bill that could be one of the centerpieces of this legislative session. And it could also set up a fight between advocates, lawmakers and the governor over whether Vermont should raise taxes in order to increase public subsidies child care costs.
Finally, the governor delivers his budget address next Friday. It’s the single-most important address a governor can deliver, and lays out a vision for how he wants the state to invest its public dollars. We’ll find out what matters most to the governor as he enters his fourth term. And we’ll also find out how close, or how far apart, the governor is from Democratic leaders in the House and Senate when it comes to spending priorities.
Have questions, comments or tips? Send us a message or get in touch with reporter Peter Hirschfeld:
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