Gov. Scott Committed to Making Vermont More Affordable

19 May 2017

On May 18, the Vermont legislature adjourned, closing a budget and property tax yield bill that did not account for up to $75 million in savings resulting from Vermont Education Health Initiative’s transition to new health plans for school employees.

Gov. Phil Scott has proposed a statewide health plan, providing a mechanism to maximize the available savings for taxpayers, reinvesting nearly $50 million to keep teachers’ costs the same and capturing up to $26 million a year for taxpayers. On May 19, he held a press conference to detail his decision to veto both the property tax yield bill and the budget, both of which will be impacted if he can reach an agreement with the legislature to realize these savings for Vermonters.

Below is the full text of Gov. Scott’s remarks.

“Thank you for being here this afternoon. I know many of you worked long hours last night.

I do not think this will come as a big surprise, but I called this press conference today to articulate clearly: I intend to veto H. 518 and H.509, the property tax yield bill.

As I said last night, this is not something I take lightly. And for those Vermonters who are worried about what will happen come July, I want to assure everyone, we will have a budget on July 1. The potential property tax savings is enough for me to try to work out one last resolution. This isn’t D.C, and I will not shut down state government over it.

I pledged to grow the economy, make Vermont more affordable, and protect the most vulnerable and I will not jeopardize one principle for another.

Over the last few months, the more we have peeled back the layers of the Vermont Education Health Initiative’s (VEHI) transitioning school employee health plans, the more we understand the importance and impact of these savings, and the more committed I am to do everything I possibly can to achieve these savings for taxpayers.

I feel strongly that majority leaders passed up on an opportunity to get real savings in a way that is a win-win-win for taxpayers, school boards, and school employees. And by not acting, those savings will be lost.

I have been clear I will not sign a budget that raises taxes and fees, and spending millions of taxpayer dollars that we do not need to spend is the same thing as a tax increase.

I know there are probably a lot of questions around what happened in the last 48 hours, but let’s take a step back.

That starts in 2015, when representatives from VEHI and the Vermont NEA outlined the opportunity for taxpayer savings if the state moved to these new plans. They met with leadership and presented the idea in committees, including Senate Finance. At that time, they had modeled between $18 and $35 million in savings for taxpayers.

In fall of 2016, when I was campaigning to make Vermont a more affordable place and promised voters to be fiscally responsible, these VEHI plans were approved by the Department of Financial Regulation and their premiums for Fiscal Year 2018 were set.

At that time, I also pledged to voters that, regardless of party or philosophy, if someone had an idea to make Vermont more affordable I would hear them out and do everything I could to put it into action. 

On January 24, 2017, I presented my budget and called for an 80/20 split on teachers’ healthcare premiums in response to the calls for property tax relief. The Vermont School Boards Association was one of the biggest critics of my budget proposal.

On January 25, 2017 – one day after I presented my budget – representatives from VEHI again testified in legislative committees on the transition to these new plans and the opportunity for savings.

In early February, my Administration started to discuss this one-time opportunity to save money immediately and rebase school budgets for long-term savings with the School Boards Association and Superintendents Association.

After their criticism of my initial proposal, I must admit I was a little apprehensive about the viability of talks but it became clear very quickly there was a lot of middle ground on finding savings for taxpayers.

Throughout February and March, I held a number of press conferences and in many of them I was asked a question about the budget and about alternative savings options. As you will recall, I repeatedly referenced the VEHI plans as a place to save money. My Administration was also communicating that privately.

After Town Meeting Week, it became clear to my team and our partners that school budgets were not accounting for much savings despite the new, less expensive health care plans. The early health care benefit and contract negotiations between school boards and bargaining units showed us why.

That same week, I laid out these challenges with legislative leaders; why I thought we needed to find a solution; and what that solution might look like.

Since then, my Administration and the legislature have exchanged countless ideas and plans around how to achieve these savings that work around their concerns, how savings will be recaptured, how they will be returned to taxpayers, and how long a policy needs to be in place to facilitate the transition to these new plans.

I worked tirelessly yesterday to find a way to work within a construct that keeps negotiating at a local level while ensuring we maximize the savings for taxpayers.

But in every single proposal, we struggled over how to give school boards – who represent taxpayers – the resources and policy tools they need to maximize these savings.

And that is ultimately where things were left last night.

I’m still confident that we can work to find compromise, and I’m doing all that I can to keep discussions with the legislature open.

I wouldn’t plan to veto these bills if I didn’t think that there was one last opportunity to reach a compromise that secures these savings for taxpayers.

For your benefit, my team and I have prepared a detailed timeline covering the evolution of this process. I believe this will demonstrate we’ve been negotiating in good faith throughout, and are working towards a resolution that works for all.”

You can view the full timeline here

Contact Information

Office of Governor Phil Scott
109 State Street, Pavilion
Montpelier, VT 05609
Phone: 802 828-3333 (TTY: 800 649-6825)
Fax: 802 828-3339

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