A Short Vacation
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| The Coast of Maine |
I'm in Maine for a short vacation. Back in Vermont the political struggles continue. The General Assembly (House and Senate) voted out the budget and the education spending bill last week. We're done. All the governor has to do is sign the bills and Vermont can continue on its merry way into a glorious summer. But the governor has threatened to veto at least one of those bills and bring us back for a special session to work something out. This is basically a threat to shut down the state government. We went through this same thing last year. It's not a good way to do legislation.
The Issue
The big issue seems to be $35 million in the Education Fund (some say it's actually $58 million - depends on what you're counting). The Ed Fund is used to fill all the local school budgets in the state. Predictions of revenue and expenses show it coming up that much short . There's money to plug that hole. The controversy is around just how to do it.
The Ed Funding bill we passed raised the average Homestead Property taxes for the state 2.6 cents for every $100 dollars of property value (from $1.50 to $1.526). That's the average for the state. Colchester's rate will go up more because of local issues. One can argue that the legislature raises taxes in order to plug that $35 million hole. The governor has pledged not to raise taxes so he wants to plug the hole by using one-time money from other sources, essentially buying down the tax rate.
What's wrong with one-time money?
We did this last year and perhaps we have learned. One-time money means you're not identifying a long term revenue source for these funds. One-time money should be used for one-time expenses like an emergency situation or to plug a temporary hole. The trouble is that when you use it to fund school budgets you are funding programs and salaries that will be there again next year and will need plugging then as well. It only delays the problem and perhaps makes it worse.
The Two Sides
The governor's plan is to plug the hole this year and put in place cost saving measures that will reduce next year's budget by enough to cover the cost. He proposed a 5-year plan to do this. Unfortunately the Joint Fiscal Office (JFO) looked into the plan, found some problems and did not respond favorably.
The legislature wants to keep the increase in the property taxes and use the extra money to restore reserves and pay down some of the debt liability in the Teacher Pension Fund. That proposal will save the tax payers $100 million "over time." They say over time because it actually a pretty long time. Like ten or twenty years.
Where we are now?
The governor has called a special session of the General Assembly in order to work out the differences. As of today he has not vetoed the budget or the education funding bill. He only received the bills this week. We've been told to report for work Wednesday, May 23rd at 10:00 am. Thursday and Friday some committees will meet, but most of us will stay home. Then, the week after, we will return to finalize whatever is agreed upon.
Hanging over all of this is the brinkmanship of a state shutdown. The budget and the education funding bill really need to be passed and signed by the governor before July 1st, the beginning of the next fiscal year.
