Budget showdown brewing in Montpelier

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MONTPELIER, Vt. (WCAX) The working relationship between the Republican governor and Democratic legislative leaders seems to have dissolved.

Gov. Phil Scott is calling lawmakers back into session next week to deal with his planned veto of their tax bill.

The Senate's leader responded to the announcement of the special session, telling the governor he can call them back but he can't dictate the work they do.

But the governor says he's not bending on his demand for property tax relief.

"The governor gets to decide what's best for Vermonters. And that is the power of being governor-- to veto bills that would be detrimental to Vermont and I'm prepared to do that," said Scott.

The governor's insistence that legislators bend to his will has Democratic leaders bristling. He wants them to eliminate all tax increases-- including property tax rate increases-- that are included in bills they have passed. He says it's nonnegotiable.

"I have a problem with raising taxes in a year that we have extra money," Scott said. "That's a problem for me."

The governor sent lawmakers a letter Tuesday telling them he'll call them back to work next week.He says they should complete their work in three days.

But Senate President Tim Ashe is in no mood to be ordered around. In his own letter to the governor, Ashe says lawmakers will run their own legislative session if he calls them back."

"It's not about being upset or angry. It's just wanting to be clear with the governor," said Ashe, D/P-Chittenden County.

Ashe and House Speaker Mitzi Johnson say one-time money the governor wants to use to buy down property tax rates is better spent on long-term debt. They say it will save taxpayers $100 million in interest over two decades. They say the governor's idea is riskier.

"One-hundred-million of savings verified versus zero dollars of savings. I think the Legislature has chosen the superior option in saving $100 million," Ashe said.

Faced with a similar showdown last year, the governor assured Vermonters it would be resolved before the new fiscal year on July 1, avoiding a government shutdown. He won't promise the same this year.

"I can't assure you of anything at this point, no," Scott said.

Ashe says Democrats have moved toward the governor. He says it's time for the governor to give a little.

"It's hard to see how we get forward without the governor doing that. The governor believes he has a nonnegotiable position. The Legislature's position has been let's save $100 million instead of zero," Ashe said.

Ashe says he has no intention of entering backroom dealings with the governor before all lawmakers return next week. He says any deal with the governor will come next week through legislative committees.