Scott to call lawmakers back for special session May 23

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Gov. Phil Scott told lawmakers Tuesday that he plans to call them back to Montpelier for a special session next week, mainly to settle a $33 million disparity in their education funding proposals.

In a letter to Speaker of the House Mitzi Johnson, D-South Hero, and President Pro Tem Tim Ashe, D/P-Chittenden, Scott said he intends to call a session that would start on May 23 and wrap up by the 25th.

Scott's plan is no surprise. He has pledged to veto the budget and a number of other bills, and told lawmakers on Saturday that he would see them back in the Statehouse soon.

Since the beginning of the year, the governor has vowed to oppose any bills that would raise taxes and fees. In recent weeks, he said a veto and special session were inevitable if the Legislature didn't adopt his plan to buy down the property tax rates using $58 million of one-time money.

The tax and budget bills the Legislature passed before adjourning this session would raise property taxes by $33 million, according to Scott, moving them closer to his position, but not close enough.

"Last year we were able to work together to pass a budget and education financing bill that did not rely on a single new revenue source, including level property tax rates. I am more than confident we can accomplish the same this year," Scott said in the letter.

The Scott administration has said that its plan — which would also include provisions to change how special education is funded, create a statewide teacher health care benefit and create a task force to help schools shed staff — could generate nearly $300 million in savings over five years.

But both Democrats and Republicans have expressed concern over using one-time funds to patch the hole in the education fund for the second year in a row.

"Last year the governor insisted on buying down rates with one-time money and we knew that it would create a problem this year and I just am not willing to do that again," Johnson, the House speaker, said in an interview Tuesday.

While the state saw a dramatic windfall of $35 million from a settlement with the tobacco industry and $44 million from unexpected tax revenue this year, lawmakers chose not to harness this one-time money to carry out Scott's plan.

Instead, they prioritized investments in the state's fiscal health, including a $34 million proposal to chip away at the state's unfunded employee and teacher pension liabilities. Lawmakers said this move would save taxpayers $100 million in interest over time.

In his letter, Scott said that if he called a special session he would hope for it to focus only on the budget and education finance — issues with a direct impact on property tax rates.

"To ensure an efficient use of time and taxpayer resources, I will not introduce, or call for, legislation not related to resolving the one remaining disagreement. It is my hope you will commit to the same."

Johnson said she was not on board with that plan, especially as Republicans were responsible for preventing a number of bills from reaching the floor at the end of the standard legislative session, which wrapped up during a late-night session on Saturday.

"He can call us back, but he doesn't get to determine what the agenda is and what we do while we're in session," she said.

Johnson listed about 10 bills that were either ready or almost ready for a floor vote when the House GOP caucus decided to limit the number of bills they would allow to move forward in an expedited fashion, snarling some key proposals.

Those bills include the merger of the liquor and lottery commissions, the simplification of government for small businesses, taxes on e-cigarettes and opioid producers, and school safety legislation drafted largely in response to the high-profile arrest of Fair Haven teen in February.

If lawmakers followed Scott's request and didn't take up other legislation, these bills would be dead until the next legislative session.

Johnson added that she doesn't think three days — the timeline Scott has laid out for the special session — would be enough time to hash out the budget and education finance proposals.

"You can't pass a bill in three days," she said. "We're talking about $1.6 billion and something that affects every community."

In his letter, Scott invited House and Senate leaders to meet with him over the next week to "iron out an agreement" ahead of the special session.

Before "moving forward" with Scott, Johnson said she wants the governor to let lawmakers know which bills he plans to veto.

Earlier this session, the governor identified about dozen bills he said he would veto on the basis that signing them into law would hurt the state's business climate. On the list was the minimum wage bill, a key Democratic proposal that would raise the base pay rate for workers to $15 an hour by 2024.

Scott has yet to let the Legislature know formally if he plans on following through with his threats, Johnson said.

"I think we need to be clear with people what's at stake here," she said.

While the budget and tax bills would increase property taxes, Johnson noted the Legislature has made efforts to meet the administration in the middle by lowering the proposed increases.

The tax bill, H.911, would raise property tax rates by 2.6 cents for homeowners and 5.5 cents for nonresidential property taxpayers, down from rate increases of about 5 and 7 cents in a previous proposal.

"I think given where we started, we've moved quite a bit," Johnson said. "And I would like to see the governor move a bit on some of his asks as well."


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