Taxes still sticking point in Vermont budget dispute

Vermont Gov. Phil Scott and the state legislature remain at odds over a new spending plan nearing the home stretch of a July 1 budget deadline.

Scott, who has already vetoed one budget proposal, is vowing to block a second fiscal plan approved in the state Senate last week because it fails to hold property tax rates steady. The Republican governor released a May revenue report reporting a $55 million surplus compared to the $44 million initially estimated, which he says should negate the need for tax increases.

“With a growing surplus, this is not the time to raise taxes on Vermonters, and especially statewide property tax rates,” said Scott in a statement. “It’s unclear to me why they would make such an extraordinary effort to raise tax rates in a year when we have collected more tax dollars from Vermonters than we need.”

Scott said the legislature's $5.8 billion budget proposal would result in a $23 million statewide property tax rate jump. The Republican governor has also objected to Democratic legislative proposals to use $58 million in one-time funding sources to fund teacher pension obligations. He has proposed using the money for an education fund that would prevent property tax hikes for the next five years.

The press offices for the Democratic majorities in the Vermont State Senate and House of Representatives did not immediately respond to requests for comment on Scott’s budget stance. Scott said Friday he is “confident” an agreement can be reached before the budget deadline.

Vermont has the highest rated general obligation bonds of all New England states at triple-A by both Moody’s Investor Service and Fitch Ratings. S&P Global Ratings rates Vermont debt AA-plus.