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McQuiston: Montpelier Stand Off

Relatively late in the legislative game, Governor Phil Scott suggested that property taxpayers could save twenty-six million dollars a year if all teacher health insurance plans were rolled into one state contract.

Legislative leaders initially dismissed it as an absurd idea without any political merit.

But my property taxes have tripled in 20 years while my home value has only doubled – and many other homeowners have experienced the same.

So between the potential savings and the increasing trend of the tax, Scott’s plan gained traction, even among some House Democrats.

The governor, however, has only one card to play – and a loss would be a serious blow to his administration. He could veto the state budget. Popular Governor Jim Douglas tried a similar gambit in 2009 and failed.

Meanwhile, House Speaker Mitzi Johnson and Senate leader Tim Ashe are suddenly hanging on by their fingernails. The House nearly approved Scott’s plan two weeks ago, suggesting that Scott could have his veto sustained.

Ashe countered with a plan to guarantee 13 million dollars in savings, but keep school insurance plans at the district level, while forcing school districts not to cut the education part of their budgets.

The difference is that Ashe’s plan would only be a property tax cut for in-state homeowners and only for one year.

Scott wants all property tax payers to benefit. He insists that the only way to sustain savings is to create one state teacher health insurance contract. While a broad savings plan is part of the Republican ethos, centralizing government control at the expense of local control is not.

There’s also the question of whether the governor’s plan would pass legal muster. Teachers are not state employees. But their health insurance plans must be re-done now because of Obamacare, or whatever comes next.

But I think there’s a way out.

The Legislature could cut the property tax by three cents for three years. For someone in a home valued at two hundred fifty thousand, this would save seventy-five dollars a year.

The Ashe spending mandate would be applied to the local school districts. Teacher health plans would remain at the district level as they are now; while property tax rates would be cut for homeowners.

Everyone could save face while being forced to compromise: Governor, lawmakers, school districts and teachers.

Everyone gets something; no one gets everything.

Tim McQuiston is editor of Vermont Business Magazine.
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