WOODSTOCK, Vt. (AP) - Vermont Gov. Phil Scott said Wednesday he would veto the second budget bill of the year being considered by the Legislature unless lawmakers remove a provision that he claims would increase taxes on non-residential properties.
Speaking at the annual State’s Attorneys meeting, the Republican said that it did not make sense to allow any increase in property tax rates when the state has a budget surplus.
“We have in the coffers $171 million more than last year, and it’s growing,” said Scott. “I believe this means we can avoid raising any taxes again this year, particularly statewide property tax rates.”
Democratic Senate President Pro Tem Tim Ashe said Wednesday he expected the chamber to give final approval Thursday to the budget bill given final approval by the House on Tuesday. He said the budget would keep government running while the dispute with the governor over non-residential property taxes can be dealt with separately.
“Our hope is that we get through the bill expeditiously and it gets signed into law and that allows us to move on and figure out the last pieces on the major points of dispute,” Ashe said.
Lawmakers were called into special session last month after Scott vetoed the original budget passed by the Legislature because he said it violated his pledge not to raise taxes of fees.
Last week Democratic leaders introduced a second budget bill that they said removed any points of disagreement between Scott and the Legislature. Scott initially supported the move to separate the budget from the current dispute over property taxes, but said a provision that would increase taxes on non-residential properties violated his pledge to avoid any new taxes and fees.
The pending budget does exclude the property tax issue that is in dispute. But if no agreement is reached by July 1, a 1.6 percent increase in non-residential property taxes would result.
Voting along largely party lines, the House passed the budget bill Tuesday 83 to 40. They voted against two amendments Scott favored that would have addressed non-residential rates. The bill now moves on to the Senate, which meets again Thursday.
The non-residential rate applies to any property that does not serve as a primary residence. Scott said that this increase would still affect a number of Vermonters.
“(The non-residential rate) affects renters, it affects camp owners, as well as businesses,” said Scott.
Ashe said that the governor’s stance would, in effect, have working Vermonters subsidizing the property taxes of wealthy second-home owners.
“We have put on the table a position, which is a fair middle ground, I would say, and then leaves further debate for beyond,” he said. “It is just not acceptable for us to say let’s adopt the governor’s position on this issue.”
Democratic leaders have opposed Scott’s plan to use a budget surplus to pay down property tax rates, which they say could lead to larger financial holes in the future.
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Associated Press reporter Wilson Ring contributed to this report from Montpelier.
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