Gov. Phil Scott says it's likely he'll veto an education financing bill that was passed by the Vermont House.
The governor’s comments potentially set up a confrontation with Democratic legislative leaders that’s similar to a situation that happened last year.
The House education financing plan — approved by the House on Wednesday by an 85 to 54 vote — includes a new income tax surcharge that raises roughly $60 million. The proposal uses this money to lower most property tax rates by roughly 10 percent.
But Scott says imposing the surcharge doesn't reduce overall education spending, and he argues that those cuts are needed to provide meaningful property tax relief.
"To just replace it with a payroll tax doesn't do anything to drive down the cost of education, and I think that that's the bottom line," says Scott.
Rep. Janet Ancel, chairwoman of the House Committee on Ways and Means, says the education plan reflects a shifting of tax burden from the property tax to the income tax and doesn't represent a tax increase.
"The bill doesn't have a tax increase, other than what school boards and voters have already approved, and the fact that we're shifting money from property tax to income isn't a net increase,” said Ancel.
"The bill doesn't have a tax increase, other than what school boards and voters have already approved, and the fact that we're shifting money from property tax to income isn't a net increase." — Rep. Janet Ancel, chairwoman of Vermont House Committee on Ways and Means
Ancel says the bill does contain an important cost containment provision because it links future property tax rates to local spending decisions.
"To me that's cost containment,” said Ancel. “It's not, you know, a bright ... bauble on the top of the system, which is what we've done in the past sometimes and it hasn't worked. It's embedded in the system, but I believe it will work over time."
But Scott says he wants savings that are concrete, like a statewide health care contract for all teachers.
"I think a simpler way would be just to reduce costs rather than to speculate on how the future boards would react and how future voters would react through this process,” said Scott.
At the end of the 2017 session, Scott vetoed both the budget and the education financing bill because he felt they represented unreasonable spending increases.
"I want to give them ample time, ample warning, that this is not acceptable." — Gov. Phil Scott
Scott says legislative leaders criticized him for not being more clear earlier in the session about his objections to these bills — so the governor says he's making it clear now.
"I want to give them ample time, ample warning, that this is not acceptable. ... We're asking them to reflect on that to make sure that we don't get into a position where we're going into the summer with a legislative session,” said Scott.
Late Tuesday, the House defeated an amendment to remove the income tax surcharge from the bill. The legislation will now be reviewed by the Vermont Senate.
