ARE WE THERE YET?
The House came back in session at 10 on Monday morning to continue their deliberationson the budget but here is how events played out last week.
Leonine Public AffairsThe Vermont legislature trudged into the fifth week of the 2018 special session with Governor Phil Scott’s veto of the second FY2019 budget awaiting an override vote in the House. There were rumors that some House Republicans would vote with the Democrats or stay home to put an end to the stalemate between the governor and Democratic majorities in both chambers. When the House convened on Tuesday it was pretty clear even before the vote that the veto would be sustained, as House Republicans showed up en masse. When the question was called the vote was not very close - 90-51 with two-thirds majority of those present needed to override.
Click here for Bill H16 and House Bill Status
This result sent budget writers back to the drawing board and Democratic leadership decided to start the process in the Senate. The Senate convened on Thursday and quickly passed a new budget bill with bipartisan support (see budget section below for details). “Budget 3.0” was added to H.16, a bill dealing with vital records. It lowered the non-residential property tax rate by a penny from the rate established in the two previous versions of the budget bill. However, it still raised the rate for FY2019 and up until Friday, the governor was staunchly opposed to any tax increases.
On Friday the House convened to consider H.16. All day long members met in caucus and otherwise milled around while negotiations between the House leadership and the Governor took place. A tentative deal was reached in which the Governor accepted H.16’s increase in the non-residential rate in exchange for the dedication of a pot of money to buy down rates in 2020. However, upon learning of the deal Senate leadership objected and the House had pulled the deal off the table by Friday evening.
The Governor and his team then left the Statehouse and the House proceeded to debate H.16. That debate included a challenge by Rep. Poirier, I-Barre over the constitutionality of the bill. Rep. Poirier pointed out that under Vermont’s constitution revenue bills have to originate in the House. While H.16 did start in the House, it came out of that chamber as a bill about vital records. Because the Senate used it as a vehicle for a budget bill, and because it contains extensive tax provisions, Poirier called foul. Speaker Johnson overruled his objection and Poirier then asked for a vote of the full House on his point of order. The Speaker’s ruling was upheld in a 94-23 roll call vote.
As Friday evening turned into Friday night the House began deliberations on the bill itself. Separate amendments from Rep. Browning, D-Arlington and Rep. Scheurmann, R-Stowe, were shot down. Rep. Scheurmann’s amendment reflected the deal between the governor and House that fell through and recieved some Democratic support.
In the end the House passed the Senate’s version of H.16, but not before amending it at the behest of House Appropriation Chair Kitty Toll, D-Danville. Under Rep. Toll’s amendment the property tax rates established by the Senate for FY2019 are unchanged. However, she proposed language providing that unless the General Assembly acts otherwise, the residential rate will remain the same as in the previous fiscal year. In addition her amendment tinkered with the allocation of some of the one-time monies, but did not apply any more of that money to education property rates in FY2020.
House Minority Leader Don Turner vowed a revote on the bill on Monday, an action that would be allowable because he voted in favor of the bill. He said he would call for a revote on the grounds that the changes voted on late Friday night were unclear. This sentiment highlights the frustration House Republicans were feeling after the tentative budget deal fell through.
Will there be a revote? Will the Senate accept changes made by the House? Will negotiations continue with the governor? Time is running short to avert a shutdown of state government on July 1. The saga continues into week six.
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This week the Supreme Court of the United States handed states a victory they had been seeking – with no success – for over 25 years. The divided court ruled inSouth Dakota v. Wayfairthat states can require retailers to collect the sales tax even if the seller lacks physical presence (or “nexus”) in the purchaser’s state. This ruling means that on-line shoppers will no longer be able to avoid paying the sales tax – potentially generating billions in additionalrevenues for state and local governments.
Click here to read more on the sales tax.
Source: Leonine Public Affairs, Montpelier, Special Session Week 5 Report. 6.25.2018.leoninepublicaffairs.com.Through a special arrangement with Leonine, Vermont Business Magazine republishes Leonine's weekly legislative report on vermontbiz.com.leoninepublicaffairs.com