Vermont Gov. Phil Scott has vowed to veto the state legislature's $5.8 billion budget plan because of objections to new taxes.
A $5.8 billion 2019 fiscal year spending plan approved by the Democratic-controlled House of Representatives and State Senate over the weekend would increase total taxes by nearly $50 million including $33.4 million in property taxes, according to the Republican governor. Scott, who has called for holding the line on any new taxes or fees, said in a statement that recent revenue growth should negate the need for tax hikes.
“The budget passed by the Legislature today authorizes a level of spending that can only be met with new and higher taxes,” he said Sunday. “This is an unacceptable approach, particularly in a year in which we have had an additional $82 million dollars in organic revenue growth, $34 million in unanticipated funds from the Attorney General’s tobacco settlement and $44 million in revenue surpluses to build a budget.”
Scott, who was elected in 2016, has also objected to separate bills to hike the minimum wage to $15 and to increase paid family leave through a payroll tax. He proposed on May 7 putting $58 million of one-time funding sources into an education fund that would prevent “chronic deficits” and prevent property tax increases for the next five years. Democratic legislative leaders have urged using the funds instead for other goals such as funding teacher pension obligations.
Scott said he plans to call a special legislative session next week to try and iron out budget disagreements. Lawmakers have until June 30 to pass a spending plan before the 2019 fiscal year commences on July 1.
Vermont has the highest credit rating of all New England states at triple-A by both Moody’s Investor Service and Fitch Ratings. The Green Mountain State’s general obligation bonds are rated AA-plus by S&P Global Ratings.