Vermont Business Magazine Governor Phil Scott on Friday vetoed the budget (H924) and the tax (H911) bills, as expected. The Legislature will resume its Special Session Tuesday. The vetoes were promised because they included a property tax increase. The vetoes also buy the process of finding a compromise a little more time, because a bill not acted upon will become law even without a signature. But the ultimate deadline is June 30. Without a budget, state government will shut down on July 1. Scott vetoed the budget last year also, which also sent the Legislature into overtime. However, back then he promised that he would not let the state shut down; he has not made such a promise this year.
In vetoing the budget, H924 (the language is similar in the veto message of H911, see full message below), Scott said in part:
"My primary objection to the bills - and the reason that, following the Legislature's decision notto schedule a veto session, I've called the Special Session - is that together they result in anunnecessary and avoidable $33 million increase in statewide property tax rates.
"We have, in this fiscal year, approximately $160 million more in revenue than last year. Thisadditional revenue breaks down as follows:
. $82 million more from organic economic growth and federal tax reform;
. $34 million in unanticipated funds from the Attorney General's tobacco settlement; and
. $44 million in surplus revenue recently added to the budget.
"Having collected far more revenue from Vermonters than expected, as well as additional revenuefrom other sources, we do not need to raise statewide property tax rates on Vermonters to fullyfundschool budgets.I have been clear as a candidate, and throughout this term in office, that I cannot supportlegislation which adds or increases taxes on Vermonters. On my first day in office, I signed anExecutive Order prioritizing affordability, economic growth, and protecting the most vulnerable."
"After years of constantly-increasing taxes and fees, Vermonters need a break. They need theopportunity to keep more of what they earn. At the same time, our businesses need a stable andpredictable environment in which they can invest, grow and create more good jobs."
"Therefore, I cannot support raising the statewide property tax rates - especially in a year whenwe have other options for fully funding school budgets. Homeowners, those who rent homes andapartments, employers of all types and sizes - everyone who lives, works and invests in Vermont- deserves a more stable, predictable and affordable property tax system."
"Many of the decisions that impact individual property tax bills - and whether they go up, downor stay flat - occur at the local level or are impacted by other economic factors. But at the Statelevel, we can have an impact through setting the statewide rates and establishing a "yield" todetermine the resulting education tax rates. As you know, H.911, as presented for my signature,raises both the non-residential rate and the average statewide homestead education tax rate,raising $33 million in additional property taxes for FY19. As the primary mechanism the Stateuses to influence the property tax burden on Vermonters, I cannot accept an increase to thesestatewide rates in ayear that we have better options.
"To be clear: if the Legislature wants to raise statewide property tax rates at a time when we havesignificant surplus revenue that could be returned to Vermonters, it will have to override a veto.However, I believe we are much closer to an agreement than the continued political rhetoricindicates."
Source: Governor Scott 5.25.2018