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An Agreement on Education Savings to Make Vermont More Affordable

June 21, 2017

During the legislative session, Governor Phil Scott committed to an education savings opportunity to save tens of millions of dollars for Vermont taxpayers. When no policy mechanism to achieve the available savings was included in the final budget or property tax bill, Governor Scott vetoed both bills to give negotiating parties a final opportunity to come to a resolution that benefitted all Vermonters.

He gave his word he would not shut down state government, and the state would have a budget on July 1, but noted the merits of his proposal and the opportunity to achieve significant savings would bring all parties to an agreement.

On June 20, an agreement was reached with legislative leaders. View the Governor’s remarks on the agreement below.

“We are here this morning to announce we’ve reached an agreement on an education savings proposal that takes an important step in making Vermont more affordable. If passed by the full legislative body, this agreement will help the state achieve significant savings in the education fund, and will set property tax rates at or below Fiscal Year 2017 levels.

Let me say that again: residential property tax rates will be lower and non-residential rates – including businesses, renters and camp owners – will remain the same as last year. This is really good news for Vermont.

The resolution reached is, indeed, a compromise. But it’s a good one that saves taxpayers millions. We found areas of common ground and we each gave on areas where there was none. Importantly, the agreement does put into place a mechanism to achieve savings for taxpayers; it aims to keep school employees whole and creates an opportunity to introduce greater equity into the system in the near future.

With this proposal, we have the potential to save Vermont taxpayers up to $13 million over the next two years, and as school budgets are rebased, we’ll see long-term savings.

We still have more work to do, but by establishing a Commission with a clear mission and the parameters that will reopen contracts in 2019, we will be able to make additional progress.

I’ve talked a lot about the economic and social challenges we face, including declining student enrollment. With this trend continuing, it is in the best interest of Vermonters, and our obligation as leaders, to continue to pursue cost containment measures in education spending.

This agreement gives schools boards clarity on target plans, but I recognize they need additional tools to simplify the negotiating process. We have created a road map to identify and possibly implement ways to continue to support those efforts.

Throughout this discussion, Vermonters across the state sent a clear message that we must work together to provide property tax relief and make Vermont more affordable.

We are all in this together to make this plan work for Vermonters. All parties in the education community have a responsibility and a role to play in maximizing the savings for taxpayers in a way that keeps school employees whole and protects school programming.

When I vetoed H.509 and the Budget, I said that I believed in the merits of my proposal and thought we could reach a resolution - which we have. I also said I wasn’t interested in creating apprehension in the possibility of a government shutdown.

I believe the resolution we reached achieves both of those goals. With it, we have distinguished ourselves from D.C. and we have a budget that, I believe, will truly make a difference in the lives of Vermonters.

With this agreement, we’ve achieved something monumental. For the first time in recent memory, we have constructed – and expect to pass – a state budget that does not raise taxes and fees.

We will have a budget and a property tax bill that provide much-needed relief from rising property tax rates for all Vermonters and makes critical investments in areas like early care and learning, higher education, affordable housing and economic development. I am incredibly proud of what we were able to accomplish together this session.”

View a summary of the agreement here.