MONTPELIER, Vt. (WCAX) As expected, Vermont Gov. Phil Scott vetoed the state budget Thursday evening.
It was the second time the governor vetoed the budget this year, escalating the brinkmanship with the Legislature and pushing state government closer to an unprecedented shutdown.
State government will shut down on July 1 if the governor doesn't sign a budget into law before then. So far, he is unwilling to sign what lawmakers have sent him.
"In a year when we have a surplus, we have more money than we ever anticipated, they want to raise property tax rates and increase the cost for Vermonters. I don't get that," Scott said Thursday.
The Republican governor doesn't oppose the budget, but he refuses to sign it unless lawmakers include a provision that assures no property tax increase. Democratic leaders accuse him of holding the budget hostage to extract concessions.
"There's nothing in it he opposes. Nothing," said Senate President Pro Tem Tim Ashe, D/P-Chittenden County.
Ashe says Scott should sign a budget and take a potential shutdown off the table. Then, a negotiation can take place over property tax rates.
"All that is left really to be debated outside of H.13, is what to do about the nonresidential tax rate and the use of what we call one-time money," Ashe said.
Scott wants to keep property tax rates flat, but local school budgets approved by voters in March require a tax rate increase to raise the revenue needed to pay for them. Scott's plan calls for using one-time surplus money-- mostly from personal and corporate income taxes-- to cover the difference.
"I think the most equitable way to give back this money, this taxpayer money, is to prevent us from raising property tax rates from all sectors, whether it's residential or nonresidential," Scott said.
Ashe says using one-time general fund revenues to fill a hole in the education fund this year will cause a bigger tax increase next year.
"Additional one-time income tax collections, whether it's personal income or corporate, is still not education revenue," he said.
The House will attempt to override the veto next week, but Republican members-- most of whom voted for this budget-- are expected to stand with the governor and sustain the veto.