Gov. Phil Scott is threatening to withhold his support for the Legislature’s budget proposal if lawmakers don’t restore “essential initiatives” that had been included in his spending plan.
An unprecedented infusion of federal funds, combined with unexpected surge in state revenues, have given lawmakers and the governor more money than they’d anticipated for next year's state budget.
They still face major disagreements, however, over how to spend the $8.1 billion they have to work with.
In a letter to legislative leaders last week, Administration Secretary Kristin Clouser outlined changes that Scott will need to see to the House-passed budget in order for it “to receive the governor’s support.”
“It’s too early to say exactly what the governor would do with respect to a veto of the budget,” Clouser said in an interview with VPR. “What we tried to do is focus on what some of the minimum changes that are necessary to get the governor’s support.”
"It’s really hard for us to part with anything that we’ve worked hard on a for a long time, but that is kind of the process we go through in Legislature.”Woodstock Rep. Charlie Kimbell
Those “minimum” changes include line items related housing, economic development, pension reform, substance abuse prevention and human services.
Substance abuse prevention
Scott’s budget proposal included $8 million in new spending on prevention programs aimed at addressing substance use disorder early.
In her letter to lawmakers, Clouser expressed exasperation at the House’s elimination of much of Scott’s plan.
“Somewhat unbelievably, the House’s proposed budget strips prevention funding, eliminating an upstream approach to more permanently prevent and address drug use and addiction,” Clouser said. “Specifically, the House budget eliminates funds for local substance use prevention efforts across the state.”
South Burlington Rep. Ann Pugh, who chairs the House Committee on Human Services, told VPR that the “prevention” on which her committee focused was keeping Vermonters who suffer from substance use disorder from dying.
“If your house is burning down, you put the fire out first, and saving lives is prevention,” Pugh said. “One hundred and eighty-one Vermonters … died in the last year from opioid overdose.”
Half those Vermonters, Pugh said, were under the age of 40. And she said the House has chosen to direct its substance use allocations — $9 million in total — to increase funding for medically assisted treatment, counseling and job training for people actively experiencing or recovering from opioid use disorder.
Human services
Scott’s budget plan called for 10 new positions at the Department for Aging and Independent Living, six of which were to be dedicated to the oversight of nursing homes and other long-term care facilities.
“One of the dreams actually of our former Secretary of Human Services Mike Smith was to enable, once a year, an annual visit, and provide oversight, provide guidance, kick the tires,” Finance Commissioner Adam Greshin said in an interview with VPR.
The four remaining positions, Greshin said, would help the state spearhead other important reforms at DAIL.
House lawmakers have funded the 10 new positions. But they want five of those new employees to ramp up oversight of nursing homes, and the other five to enhance oversight of adult day services and other programs that provide care for people with developmental disabilities.
“Both are needed. We had to make some choices. And we’re not going pit one population as being more needy than another,” Pugh said.
Greshin said it’s waste of resources to use five new positions for oversight of agencies that care for Vermonters with developmental disabilities.
The network that provides that care is so large and sprawling, Greshin said, that five positions, “wouldn’t make a dent in what we are being asked to do.”
“It’s not a very good use of resources,” he said. “We don’t have the horsepower within adult day services to deal with oversight of developmental disabilities programs, but we do have the capacity to provide oversight of all of our long-term care facilities on an annual basis.”
Housing
Both lawmakers and the governor have made affordable housing a priority this session. And both want to spend enormous amounts of state and federal money to kick start construction of more units.
How exactly that money gets spent, however, is in dispute.
The House budget, for example, puts a strong emphasis on low-income individuals exiting homelessness.
But Scott wants to see action on housing for moderate income Vermonters. And he said he won’t support the budget unless lawmakers reinstate an additional $10 million toward construction of homes that cost in the range of $200,000 to $250,000. That price point he said is in short supply for middle-class individuals, which often don’t qualify for state subsidies.
Scott is also calling for another $10 million to restore blighted rental properties.
While House lawmakers may have already approved their version of the budget, House Speaker Jill Krowinski said lawmakers will continue to deliberate over how best to distribute resources for affordable housing.
“These are all things that we are currently debating and have not landed, so there’s lots of time for us to continue that policy discussion,” she said.
Pension reform
Greshin said Scott is impressed by the pension reform bill approved by the Senate late last month.
The legislation, which represents a compromise brokered earlier this year by union representatives and lawmakers, calls for some one-time payments from the state — totaling on the order of $200 million — to buy down an unfunded liability in the state pension systems.
The bill would also require increased contributions from state employees and teachers, as well as some reductions in pension benefits for those public sector workers.
Greshin, however, said Scott wants lawmakers to allow new employees to have the option of choosing a 401(k)-style retirement plan. Instead of a worker paying a set amount of money every pay period for a guaranteed pension benefits, they’d put an amount of their choosing into an investment plan.
When they leave government service, their retirement nest egg would be a factor of how the market performed, not a collective bargaining agreement between employers and the union.
Krowinski told VPR that she’s not necessarily opposed to the concept, but said the union officials, lawmakers and other constituencies that negotiated the grand pension bargain don’t have enough time before session’s end to vet the governor’s idea.
“We have been working really hard on this for a really long time,” Krowinski said. “And for the governor at the last minute to come in with concerns now is really disheartening and disappointing.”
The path to adjournment
Scott is also asking lawmakers to restore $50 million in funding for a capital investment program for businesses hit hard by COVID. He also wants tax breaks for military retirees, people on social security, nurses and young people with student loans. The House chose to focus its tax-relief efforts on child care tax credits.
Woodstock Rep. Charlie Kimbell said the House and Senate will also have some major philosophical disagreements to work out before the session ends. Workforce and economic development bills in the House and Senate contain very different spending proposals. Those proposals are in many cases competing for the same dollars.
“All of our children are special, right? So, it’s really hard for us to part with anything that we’ve worked hard on a for a long time, but that is kind of the process we go through in Legislature,” Kimbell said. “We’re far apart, and it’s going to be a very interesting negotiation process over the next few weeks to figure out, ‘How do we match the priorities of the Senate, priorities of the House with the priorities of the governor?’”
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