Vermont State House: Legislators call for clarity on state budget

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MONTPELIER — House leaders are calling on Gov. Phil Scott to come forward with new proposals for how to close the remaining gap in the next fiscal year budget.

The lawmakers' call came hours after the state's finance chief issued a gag order to heads of agencies and departments directing them not to work directly with the Legislature on proposals for reducing the budget.

The House Appropriations Committee still must wrestle closed an $18 million gap between expected spending and revenues in the next fiscal year. The committee has already whittled the gap down from a total of $72 million.

In the final stages, lawmakers say they need help from the Scott administration. But the governor is resisting legislative requests.

House Speaker Mitzi Johnson, D-South Hero, and key money committee leaders issued a public call Wednesday for the governor to help the House find ways to close the remaining $18 million gap.

Johnson said Scott's initial budget proposal shifted general fund expenses to the education fund and onto property taxes.

"The governor's proposed budget is built on a house of cards. We know that. He shirked his responsibility to put a balanced budget on the table," Johnson said.

She argued that Vermonters rejected the governor's proposal last week when more than 90 percent of school budgets in the state passed on Town Meeting Day. Scott's vision had included having school districts rewrite their budgets to level-fund them this year as a way of freeing up money for other priorities, but that didn't happen.

"Now that Vermonters have had a chance to weigh in on the governor's budget proposal, it's time for the governor to be the leader he was hired to be and meet us to help close that last $18 million gap," Johnson said.

Scott raised expectations by proposing important investments, she said.

"He made a lot of promises in the campaign, and those promises that he made are, when you put them all together, are very hard to live by," Johnson said. "It's very hard, and some of the choices make you very unpopular. I know."

Rep. Kitty Toll, D-Danville, who chairs the House Appropriations Committee, said she hoped the administration would take a collaborative approach at this stage. She sent a memo to Scott's team Tuesday regarding the budget situation.

"I will solve this problem, but I would be much happier solving it as a team," she said.

Scott spokesperson Rebecca Kelley responded to lawmakers that the governor did present a balanced budget without raising taxes and fees. She called suggestions that Scott's proposal would increase property tax rates "misleading rhetoric."

"The House has had seven weeks to explore and propose ideas to balance the budget in a way that addresses our economic, workforce and affordability challenges — as the governor did in his budget," she said. "They've accepted the majority of the savings proposals offered by the governor, while offering no alternatives beyond the threat of across-the-board cuts to services and putting front-line staff at risk of layoffs."

The administration is willing to work with lawmakers as they present "a complete budget proposal," she said.

Republicans in the Legislature say that if Democrats don't support Scott's proposal, the responsibility now rests with them.

Senate Minority Leader Dustin Degree, R-Franklin, said it is up to Democratic legislators to come up with their own proposal to solve the budget gap.

"It sounds to me like for six years the Appropriations Committee waited for Peter Shumlin to tell them what to do. Welcome to divided government," Degree said. "The governor put something on the table, it wasn't to their liking, and I think it's time for them to put something on the table and let Vermonters pass judgment on it."

[SUBHEAD] Gag order

The House leader's call came hours after Scott's finance chief told staff that additional cuts to the budget should not be negotiated directly with the Legislature.

In a memo circulated Wednesday morning, Department of Finance and Management Commissioner Andy Pallito instructed business managers and heads of state departments not to communicate with the Legislature directly.

Pallito wrote that he understands some legislators have reached out directly to state officials "regarding further reductions" to the budget.

"If you are contacted, please remind them that the Governor put forth a balanced budget, and we should continue to support that budget," Pallito wrote.

Pallito added that any cuts should be directed from the Legislature through the secretary of administration.

"Individual agencies and departments shouldn't negotiate further changes directly with the Legislature," Pallito said. "If you are contacted, please send that information to me and your budget analyst."

Pallito said the email to staff was prompted by communication from members of the House Appropriations Committee directly to staff concerning potential budget cuts. One of his primary tasks is to coordinate the construction and implementation of the budget, he said, and it is "imperative" that he be involved.

"We are looking at this budget holistically, and that can't be done if cuts are made on an Agency-by-Agency basis without our department involved to assess the impact to the overall budget goals," Pallito said.

He signaled that the governor would not work with the Legislature on a plan to close the gap until lawmakers put forward a proposal.

"Once we receive a proposal, we will review it and work with them to reconcile their proposal with the Governor's goals," Pallito wrote.

However, Johnson said the administration's reluctance to work with the Legislature is unusual.

Agency and department heads historically maintain strong support for the governor's recommended budget. However, the total lack of communication from the Scott administration this year has been unusual, she said. In the past, there has been informal communication as agency heads provide guidance on where there may be room to find savings, she said.

The Legislature has approached Scott's administration about working together to solve the budget gap, she said. "We hear, 'Well, yeah, we'd like to partner with you and as long as you agree with us we're fine.'"

Lt. Gov. David Zuckerman, a Progressive/Democrat, said he feels the governor's proposal should be a two-year discussion and that it transferred too much of a burden onto the property tax.

"If (voters at town meeting) wanted his proposal to go, they would have on their floors offered budget changes to their school budgets to do what he asked for. That's not what voters did," he said.

Zuckerman said the governor does have a responsibility to come forward now to help lawmakers reconcile the budget gap, especially because members of his administration are most familiar with the nuances and pressures on state spending.

"That's knowledge that he has through his administration that policymakers don't have, and they can't read his mind, and now they can't even have in his administration leaders from those agencies to talk about anything," Zuckerman said.

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