 Vermont PBS in cooperation with Orca Media and the Vermont Press Bureau presents Capital Beat, the Week in Review, from the Vermont Statehouse. Here's host Neil Goswami. Hello everyone, we're pleased to have you with us again this week for Capital Beat. We are Beyond Town Meeting Day. The budget battle is heating up between lawmakers and the governor. Joining us today is Speaker Mitzi Johnson and Senate Pro Tem Tim Ash to discuss these latest developments. Thank you both for being here. Thanks Neil. Madam Speaker, we will start with you since you had a press conference this week where it seemed as though some pent-up frustration with the budget process and the engagement from the governor sort of leaked out this week. Can you sort of fill us in on where the House Appropriations Committee is with the budget and why you and the chairs of the money committees are so frustrated by this process at this point? Right now the House Appropriations Committee is doing really incredible work. We started with about a $70 million budget gap. They have worked really hard to get that down to about an $18 million gap and then they have some other ideas on the table and it looks like heading into the final five days or so, five legislative days. We probably have about seven or eight million that we've got to close to balance the budget. The frustrating piece is that the governor put a budget proposal on the table in the fifth week of the legislative session. We've got the entire package in about week five, so we're almost about a third of the way through the legislative session at that point. It put $50 plus million on to property taxes and Vermonters have told me over and over and over and over again, no more on the property taxes. Having that proposal, we just felt like Vermonters weren't interested in funding what should be state government responsibilities on their property taxes. Last week at town meeting, Vermonters had a chance to vote on their school budgets and whether or not they would level fund them and allow Montpelier to scoop those savings as the governor proposed and they said, nope, and 90% of school budgets passed. I served on a budget committee for 10 years and chaired it most recently before coming to the Speaker's office and budgets go through these cycles, right? The governor introduces a budget. Every governor, I've had budgets under Republican and Democratic governors. Every governor's budget has some things that don't quite meet the straight face test. And then we all kind of say, oh gosh, how are we going to solve this? And then the big pieces start falling together. And there's time for the sort of posturing, but then in this period in the week or two before a viable budget gets put together before it's put on the House floor, that's when we all tend to come together. Again, under, you know, it doesn't matter who the administration and the legislature are. It usually works this way and we're not seeing that happen. So we're trying to invite them in to do that. What has been the governor's role since unveiling his proposal in late January? What's his involvement been? They've presented the budget to the committee, as they normally do. And then when Vermonter said, nope, we don't want this money on our property taxes, the governor stuck by his original proposal. And in my opinion, probably should have put some alternatives on the table, particularly after Vermonter said, no, this doesn't work for us. And, you know, we're still happy to compromise and try to come to some sort of agreement. But at this point, we are doing our best to put together a budget that takes care of the most vulnerable Vermonters, that has reasonable growth rates, that's a budget that Vermont can afford that does not raise property taxes. The governor held a press conference and very recently just said, there is no plan B, they're willing to negotiate when the house completes its work and has its own budget proposal. It seems as though that is the position they are locked into. Are you prepared to finish the task and then head into the negotiation process? Yes. Yes, it's disappointing that he got a resounding no from Vermonters. And he, you know, he talked about in his State of the Union address, you know, his inaugural address, he talked about working together. He talked about not having top-down solutions. He talked about keeping money off the property taxes. And we're not seeing that part right now. Okay. Senator Ash, we know that the house always gets first crack at crafting the budget. But there is some parallel work that goes on while the house is doing its thing. Would you say the Senate shares some frustration with the governor or are you comfortable with the level of engagement at this point? I think Mitzi has really stated it quite well, the traditional path that these budgets go through. This year is different from the eight previous years I've been in the Senate in one major regard, which is after some of the things fall to the side that either don't pass a straight face test or just met with no enthusiasm by either the House or Senate, typically there is a, okay, what now? And it's a little more visible in the committees and in discussions with leadership. I think that some of the frustration that people in the House and Senate have had is that there are a lot of new faces in this administration who don't have a lot of experience with the programs in state government, especially some of the bigger ticket ones. And so I think some of it's a lack of familiarity with what to do now if those proposals didn't generate enthusiasm in the legislature. So we are also in the same place because we've, I think, been appreciative that we each get elected in our districts. The governor was elected by the people of Vermont to serve as the governor. He made certain proclamations as a candidate including no new taxes or fees. And while that's the same statement we usually hear from governors, there has been an appreciation that we have to respect certain confines that any governor has as a result of being elected the state's chief executive. That said, we're looking for, I think, in the coming weeks. And again, we have the luxury and the Senate of going second. So I have much sympathy for the process that the House has to go through first. I think we need to see more engagement, more activity, more creativity, more ideas coming from the administration than what we've seen. So that seems to set up the rub here because in his press conference the governor said multiple times that lawmakers should look to the Education Fund for savings. He believes they are there. Governor Scott was asked a number of times, well, what are they? If you're so confident they are there, why not just help deliver those to lawmakers and, you know, we can help bring this budget process to a close early, perhaps. But he is unwilling to sort of detail what those perceived savings are, but insists they are there. So do you think that the House will find some savings within education that can help balance the general fund? I'm going to translate your question there. Because when you say, can we find savings in education that benefit the general fund, that means appeal your scooping property taxes to pay for state government, that's what that involves. And Vermonters have said no way. So, and I think there could be savings in education that, and then our system says the local school boards and the local voters, the local taxpayers get to say what happens next. I do think that if communities decide to create savings somehow those savings should be then returned to the taxpayers. In some cases, communities may choose to reinvest in their children, but our education system says voters get to vote. So unless Governor Scott is saying, Montpelier should decide what school budgets are and, you know, scoop people's property tax money to pay for government, which is what he's suggesting. I don't think that's something Vermonters are going to go for. Senator, would you agree, is the governor asking lawmakers to do something that you're not comfortable with? Oh, absolutely. I mean, if you were to ask the average taxpayer in the state of Vermont, would you like your property tax bill to go down? I think would say yes, I'm guessing here, but I think they would say yes. And if you said, do you think we should find savings where possible in the education system to lower property taxes, say that would be great, they would really appreciate that. But they probably wouldn't answer affirmatively if you said, how about the following instead? We find savings in the education system. We take the dollar, your property tax bill stays the same. We take the dollar, use it for some other purpose so that we don't have to raise a fee on, you know, your motor vehicle registration or something else that's unrelated. And that's essentially the heart of it. It is not a property tax reduction plan. It's using that as the piggy bank to pay for other expenses. So viewers have to understand that no one comes to the legislature, I don't think, with a primary mission to raise taxes and fees. That's not like no one shows up thinking that's our first order of business. It's to meet the needs of the state with the money we have. And then at times we've had to raise additional revenues to meet needs that we didn't have the funds for. But the governor's construct is quite different, which says, no, let's start commingling these activities and frankly making it even less transparent than the system already is. The governor's spokeswoman issued a statement following your press conference and said this isn't a lack of communication. It's essentially a difference in philosophy, which is to me seems like a much more difficult bridge, gap to bridge than just a lack of communication. Are you both feeling like there's a pathway here to see eye to eye and get to a better place on the budget? We're working to create a balanced budget that really meets Vermonter's core needs that's within our resources. Even though we went about it differently, the governor is trying to say some of that, but frankly it will mean the legislature isn't going to be shoving those harder decisions onto local schools and school boards. We're going to make some of those harder decisions for ourselves, put specifics on the table, let people know what the actual plan is rather than having sort of the big broad brushstrokes with no specifics. We actually come to think of it. I don't know if you've gotten anything, but we actually don't have the specifics of the governor's education plan yet. They just gave the broad strokes and didn't actually lay out how it was going to work and where the money was going to come from with all of those details. In essence it wasn't that we got the budget on week five, it's that we still don't have a big chunk that we just stopped asking for that part. I'm 100% convinced we will get to a finish line. You always do. But that's the important thing. I don't generally think it's a good idea to respond to public relations staff because it's just a sort of side issue. But I want to make clear kind of the dilemma that House and Senate leadership are in. So the governor's team put forward a budget concept which started to use the education fund, your property taxes as a piggy bank to help pay for other priorities in the general fund. Now if the legislature says, no we think that that's completely inappropriate, possibly unconstitutional, and a bunch of other issues which are important. We are then in the difficult position if the governor doesn't come forward with new and additional ideas because we either have to be the ones proposing cuts which now won't be associated with the governor's team, they'll be associated with legislators, or new revenues which will be associated with us. So the viewers have to step back and say, why are legislators in the position they're in? Is it because they showed up hoping to make cuts? Is it because they showed up hoping to raise taxes and fees? Or is it that the governor's team hasn't given them another alternative to avoid that construct? And so I don't think it was deliberate, but if it was it would have been a brilliant budget construct to be honest. The position it's put us in. Some people believe that the governor's proposal was essentially a punt. And you say it's not deliberate, do you believe it was deliberate or not? No, I'm not going to speculate on motives behind why people do what they do. I think it is important to understand that we got a budget proposal that was conceptual. I would love, for the ten years I spent on appropriations, I would have loved to have passed budgets that say, we really want to meet people's needs without raising any additional revenue. All those in favor say aye. Go ahead administration, make that happen. That's basically what the executive branch did to the legislature. The legislature's going to be more adult about it. And we're going to say, here's a plan we're putting on the table. And that plan does involve some hard choices. And some people aren't going to like ways that we increase compliance on collecting taxes. And some people aren't going to like cuts that we have to make. But it always gets hard when you get down to actually trying that final closure. And that's where it's important to have the full-time executive branch that are the people on the ground that know the programs, that know the work, that know their departments intimately, communicating well with part-time citizen legislatures that come in from either their retirement or their farm fields or their legal businesses or whatever their other work is for seven months a year. And they come and serve in the legislature for Vermont for these four months. It's really important to have that intimate knowledge shared with legislators to make their decisions. But at this point there has been basically a gag order put on saying, don't share some of this information with the legislature. And that's not what Vermonters want. Vermonters want us to work together. And we're saying, come to the table, work with us. We're almost there. Work with us on what you think you could live with. Okay. Speaking of difficults, the president, Donald Trump, has released his budget framework. And it does a number of things that would be very detrimental to the budget in Vermont. It seeks to eliminate the LIHEAP program, which is Heating Assistance for Low-Income People. It would get rid of some things that many of us may not even think about, like meals on wheels, which help seniors get food delivered to their homes, community development block grants. What position does this put you folks in, in terms of needing to plan for the future and crafting a state budget while you're awaiting what happens with the federal budget? Are you planning ahead at this point for how to deal with it? I mean, the first thing that we have to do when we get out here is control what we can control. And the budget, I have to say, if you just listed some of the programs, Meals on Wheels, Community Development Block Grant, for those who don't know, is basically one of the funding sources for almost every affordable housing development in the state of Vermont. Also getting rid of the funds that create legal aid. VISTA and AmeriCorps programs would be gone. A 20% reduction in the Ag Department of Agriculture, which funds a lot of our water quality and agriculture programs. 30% reduction in EPA, which would probably torpedo all the federal money that comes to us to clean up Lake Champlain that we're counting on for the future. And by the way, 20% to the State Department, so the actual people who understand world cultures and who ease tensions with other nations. They'll all get sacked so we can buy more airplanes and stuff, I guess. So it's like a real problem. What I think we have to do, and this will be a conversation between the speaker and myself with our colleagues, is we have to get out of here with the budget that controls what we know and control at this time. We will have to pencil in some time in case something truly catastrophic happens, like most of the budget. And the Donald Trump budget, the best thing that could happen is his own party could take it, say, that's an interesting exercise, put it in a little file that's circular, it's on the ground, and then get back to being grown-ups. I mean, that's our hope. But it could happen that come October 1 at the start of the new federal fiscal year, there's some dramatic implications for us. And so we've got to talk about whether we schedule some dedicated time in the fall just in case that happens. I just want to be clear. If all of those things happen, and as you noted, this is just the president's sort of wish list, much like the governor does here in Vermont, it'll go through the congressional hearing process, and they'll come up with some sort of spending plan, although I think it's been years since we've had an actual budget. It's been a series of continuing resolutions, but that's probably three separate shows just for that. But, you know, it's no sure thing that all of these things would happen. With that sort of information in place, could Vermont recover from, I think LIHEAP alone was $18 million this year from the federal government, can the state even begin to think about backfilling that sort of funding? About 35% to 40% of our $5.5 billion budget comes from the federal government. So I think we heard last week that if the Affordable Care Act were fully repealed, some of the proposals on the table would mean about a $200 million hit to Vermonters. Not only the state, but Vermonters that get tax credits to make health insurance more affordable that actually don't flow through the state. So there's a long list. I think, you know, keeping in mind that this is the first foray, and it has to go through a process just like our budget does, you know, we as the legislature are not going to let Vermonters property taxes go up by $50 million because of a governor's budget proposal. We're hoping that Congress decides to also be the adults in the room and say, okay, while we've been talking about cutting for a while, maybe not quite like this. One thing that I'm taking some action on is I've appointed Sarah Copeland-Hanses to work closely with our federal delegation and put together kind of response teams based on topics. So that we have a really good sense of, you know, getting a fairly quick response once we get information that something is actually going into effect, where it involves, you know, after-school care, because there's another $5 million cut proposed to that, or, you know, senior citizens or affordable housing or healthcare that we can pull together these response teams the minute we find out to say, okay, you know, what is it that we need to do and who will this affect? Yeah. March 17th is the crossover deadline for policy bills. March 24th, I believe, a week later, is the money bill crossover deadline, which means they have to clear their committees of jurisdiction, essentially, to be able to move forward. There are a number of bills that both chambers are looking to advance. Senator Ash, let's start briefly with the Senate side. What are some of the main priorities that you're pushing for to get through? One of the top priorities we've been discussing throughout the session is mental health, and, you know, I think of the legislature as sort of a three-step process. The crossover deadline that we are coming up against tomorrow, once the other body, in this case the House, receives it, does their work, and then whatever negotiating has to happen between the two bodies and the governor from there. So the mental health bill is, I think, a good first step of that three-step process that tries to really get an inventorying of both the policy, personnel, facilities issues faced in our mental health system around the state. We know that despite all the best efforts of many people, we still have a system that has real problems and stresses. So it seeks to start making some ground, work with the new team that the governor has assembled who are entering into some of these issues for the first time so we can make good judgments and put the dollars where they really belong. There's one bill I did want to ask you about. Act 46 changes flexibility. Act 46, the school governance law that we've been sort of implementing over time for the last several years. Many school districts jumped on the chance to consolidate. Others have been slower to do so. And there's been some debate about whether those who haven't yet should have more opportunity to choose how they do it. Why is this a priority? Well, I think any time you pass a bill that creates this, any kind of system change, if you will, and that system is meant to now satisfy dozens of very uniquely constructed school district associations, if you will, you're going to realize there are some wrinkles down the road. So the first phase of the Act 46 rollout, and this is the school district governance reconfiguring, was step forward, jointly come together, have a vote, and you'll get tax incentives. We're now in phase two, which was kind of the next round, where the incentives aren't as great, things are, time is running short for this phase two, and then phase three is you haven't been willing or been unable to come together with other districts, now the state board working with the Secretary of Education will actually configure it for you. So after phase one was over, it was pretty clear we needed to help some communities who were operating in good faith, trying to find a solution that worked for them, come up with accommodations, if you will, that didn't violate the original spirit of the law. So our education committee had worked with the House Education Committee and it was determined the Senate would go first on this, so it's not that one side viewed it as more of a priority. And voted out six to nothing, a bill which will provide new options to most of the districts that haven't merged yet. Now people who flat out oppose having their SU or their school district merge with another one will probably not be satisfied with anything that happens in this legislature relating to that issue. But all those districts have a new option or new flexibility that's greater than what was there before. And I think our education committee has members from communities that include some of the most challenging areas of the state, Wyndham County, Bennington County in particular, I'm thinking of as well as Caledonia. So the fact that it was a six nothing vote to me says the legislature is listening to local communities and really trying to be responsive while sticking with this overall vision for a more unified system. Okay. Speaker Johnson, I want to make sure we talk about a couple of bills in the House as well. The marijuana bill, my understanding is that the Judiciary Committee has been willing, ready, and able to vote it out of committee. But there's been some sort of posturing by leadership to make sure you have a vote count on the floor that you like. Is that generally where things are at this point? For starters, the snowstorm really kind of messed up the fact that state offices were closing early and we had no heat in the building here for a few hours, made for an interesting day and threw off a few schedules. We are touching base with members to say, hey, how are you feeling about where this comes forward? About the bill that's being crafted right now. So we are working to touch base with a broader range of membership. And we're also working within that committee on a, there's a ranking member there that's had knee surgery and he's in and out. There's a chair that had some other obligations. And so there are people, it also, we need to make sure that we've got a quorum in the committee and making sure that happens. They're also looking at a large package of criminal justice reform pieces that they've been working on. And this would be a piece of that, but it goes along with things like expungement and bail reform, fair and impartial policing, and the immigration bill that we just, this week, concurred with the Senate on. So it's really, you know, part of that larger package of criminal justice reform. The Judiciary Committee seemed to think that even if it didn't meet the crossover deadline that the rules would be sort of set aside to allow it. It's something the Senate wants to see as well. Are you confident that this could move after crossover if needed? There's nothing preventing a bill from being voted on after crossover. Crossover is just sort of that, that nudge to say, here's a date in order to give the other body time for consideration, but the other body can still choose to take something up. That's what I mean, you don't. So that will... You're confident they wouldn't be questioning the timing? Well... I'm right here, she asks. I will leave that to them, but it's, I think, you know, just important with any major policy change to make sure that we've touched base with people, to make sure that we're putting the right thing forward whether or not it meets the exact deadline. Again, this being the first half of the biennium, the timing has a little more flexibility because we always have next year as well. All right. And I've got about a minute left. I just want to ask you about the paid family and medical leave bill. Is that something you believe we'll make it over to the Senate this year? We are looking to keep moving that forward. It was not in the plan to try to get that done before crossover because it has to go to a number of different committees. I think it took some turns yesterday in trying to figure out how it gets implemented. So I think we're still figuring it out, but it is part of what we're thinking about for larger economic development and, frankly, for trying to attract younger families and young workers, people for our schools, people for long-term economic development and to really fill our workforce. Okay. That's all the time we have. So my thanks to Speaker Mitzi Johnson and Senator Pro Tem Tim Ash for joining us today. And thank you to the viewers on behalf of Orca Media and Vermont PBS. I'm Neil Goswami with the Vermont Press Bureau, and we look forward to seeing you next week.