 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. Welcome everyone to Capital Beat. I'm Neil Goswami with the Vermont Press Bureau. We are here inside the Speaker's Office with House Speaker Mitzi Johnson and Senate President Pro Tem Tim Ash. And we are here to talk about the budget proposal put forth on Tuesday by Governor Phil Scott. Madam Speaker, Mr. Pro Tem, thank you very much for being here. Thank you Neil. It's a pleasure to have you. Some have called it a radical proposal, some have called it a bold proposal. Others have said there's no way this is going to pass, others said we'll give it a chance. This was a budget proposal that really does some fundamental things to change the education system here in Vermont. It takes some early education spending and some higher education spending and puts it into the education fund. It also imposes the state's will at the local level a little bit. Speaker Johnson, maybe you can give us your first impressions of what you heard on Tuesday. So I would, I'd even challenge some of the bold comments. Most of these proposals we heard either under Douglas where there were efforts to put a lot more expenses into the education fund or Governor Shumlin tried saying to local school boards just don't spend more. That's how we're going to solve property taxes if you don't spend more. So it's really combining those two proposals and then balancing the general fund on that idea. So I wouldn't have called it bold or surprising really. We're already hearing from communities that have concerns about the timing. People are trying to warn budgets right now and are required to within about a week. And part of what we pride ourselves in Vermont is local communities being able to make some local decisions. And we've had a lot of pushback about what Montpelier should or shouldn't get involved in. So we're right now really listening to communities, to school boards, to parents and to taxpayers saying, you know, do they really want another $150 to $200 million worth of liabilities put in the Ed Fund, some of which will wind up on their property taxes. Senator Ash, before you weigh in on your first impressions, let's give the listeners at home some idea of what we're talking about here. The governor proposed moving higher education into the education fund, which is about almost $84 million worth of funds. He wants to move retired teachers' health care funding to the education fund, another $27 million. And then the teachers' general retirement contribution, another $8 million into the education fund. Altogether we're looking at $135 million, $136 million in transfers to the education fund. At the same time, his proposal calls for about $86 million to come from the general fund into the education fund to help cover that. That doesn't seem to add up. What do you think about this proposal and the potential impact on property taxes, Senator? Well, I think I would call it a bold proposal in the sense that the governor said he wanted to come in and make proposals consistent with some of his campaign rhetoric. And unquestionably, this would be a fundamental upsetting of the apple cart in terms of our education funding system, which has now been in place for 20 years. In addition to that, the governor is asking us in about three or four days to make very serious decisions, which in the past have taken many years of community participation and legislative process to arrive at. You said something in your intro about it being a slight imposition of state control over local schools. I would say it's a total imposition of state control. In fact, it is a direct and absolute mandate on the amount of money that can be spent by local districts when they show up to vote on their school budgets. Now, some people are concerned that the voters sometimes vote for too much spending, sometimes not enough. But whether they're conservative people or liberal people, we've usually heard that the state shouldn't tell them how much they get to vote on. This actually does tell them you cannot vote for an amount that exceeds last year's unless you happen to be a wealthier community that is able to do what they're calling a one-year, up to 5% of your budget's special assessment, which then raises all sorts of constitutional issues. So, all in all, it's a proposal that, in fairness to the administration, they're just getting their sea legs underneath them. It's pretty clear that when you try and put all these pieces together, it's not quite ready for prime time. And so, let's make it clear what the proposal is. The governor is asking the legislature to pass something that ensures that local school districts cannot spend above their 2017 fiscal year, the current fiscal year budgets. You mentioned the 5% one-time assessment or fee or whatever you want to call it. That would be imposed at the local level. Therefore, it wouldn't be Governor Scott that's raising property taxes or any tax. He's also calling on the legislature to pass something that forces teachers to pay at least 20% of their health care premiums. So, those are the two areas where you believe he's taking total control or looking to take total control. Yeah, I mean, collective bargaining, you know, for those who don't follow labor management issues, collective bargaining is the premise that in law we say to the teachers, these are the things you negotiate with your local school boards, and the contributions teachers make to health care premiums has been one of those items. For the first time ever, this would be mobiliar coming in and saying, you know what, for decades you've had a complex set of negotiations. Some districts might have lower premiums and as a result they've made sacrifices on wages or vice versa. This would be mobiliar coming in and saying, all of those past trade-offs are now out the door. You will pay up to 20% whether that disadvantages or advantages one set of teachers who have made other concessions for their current health care benefit. And again, this is one on principle we have heard from conservatives for year after year after year and from liberal year after year after year that mobiliar should not descend and dictate the terms of play at the local level. And unfortunately right now in this construct that we're trying to untangle, those are two instances where we're absolutely coming in with mandates. I think additionally, I'm not sure how familiar the governor was with all of the efforts that are currently underway right now for teachers across the state to be re-evaluating their health care plans. All that's currently happening because the health care plans offered to teachers around the state are being shifted to better align with some of the offerings to the public sector and to private citizens. So having, it would be terrific to let that conversation take place because I think there's opportunity there to significantly realign spending and how that works and actually put teachers and school boards in a much better position that would help the collective bargaining process and help taxpayers. Jason Gibbs, the governor's chief of staff told me this morning, quote, we're going for the end zone in one play. Is that a smart way to govern? Is that a smart way to approach such a major part of state government in terms of education? Even the Patriots saved their flea flicker for some time in mid-game last week. I've always said that sometimes it's good to have first downs. It shows a sign of progress. You build on success. And as Speaker Johnson was saying, we have ten sets of communities going out with Act 46 merger votes on Town Meeting Day doing all the things that the legislature and the administration in the past have asked them to do. And so throwing that Hail Mary to the end zone on the first play of the game has to be also viewed in the context of all the work all these districts have been doing in good faith to comply with the same spirit that we've raised around spending pressures and other things in the past. These districts, not all of them are doing the same high-quality work in their merger attempts, but there's a lot of good faith effort going out there. And this really does have the effect of sending a message to them that your work has really not been worth it. Your House Ways and Means Committee, Madam Speaker, has already begun hearing from members of the administration who are there to explain the proposal, defend the proposal. And they've raised a number of questions about its feasibility. Let me start with one of the main concerns, which is timing. Local school boards are this week and by the end of next week needing to warn their school budgets for Town Meeting Day. And the governor is asking them to hold off and have a special statewide voting day on May 23rd for school budgets. But it seems unlikely that you'll be able to act that quickly and state law calls for them to go ahead and warn their school budgets. So, I mean, do you feel that if this is going to work, you need to act within the next week and a half or so? I don't think it's within the governor's power to tell town officials that they should not follow state law. And we have hundreds and hundreds of bills, potential new laws, all of them potential new laws, discussed over this four and a half month period that your representatives and senators are in Montpelier. And so if there is a proposal for anything, and there are lots of proposals every year, the rule is always you follow existing law until the law changes. If we were having a law to change the speed limit, or we don't have one like that right now, but so smoking age. There's a bill out there to raise the smoking age to 21. Does that mean that all store owners should stop selling cigarettes to people 18 to 20 because there's a proposal on the table that could raise it? And I think in that example people would say, well, no, current law is, you know, 18 is legal. And so that's the way it should stay until that law changes if it were to change, making no comment on that law. But just as an example. Sure. So you expect, you both would expect that school boards would go through, warn their budgets, and should you act at a later date, that'll change. If they don't, they're in violation of the law, plain and simple. Okay. There's been a number of questions. And I should say, Neil, there are some who for reasons that I don't think are the ones that motivated the governor's proposal. But people who for political reasons would like to throw a little chaos into this are actually encouraging their school boards to step back. And I just want to indicate what a problematic thing that would be if any public official in the state was saying, don't continue as if the current law will be the law. That is, that really is the kind of thing we're seeing in Washington right now, which undermines the entire democratic process. Right. Right. So it's important that they continue to follow the law up and until the law changes. It's what is expected of public officials in the state and everywhere else. Okay. There have been a number of legal questions raised, particularly about number one, the authority of the legislature to dictate such terms to local communities or local school boards. And then whether or not this disrupts the equity that the Brigham Supreme Court decision required everyone to follow. Let's start with the, with the, what some are calling an overreach of power in Montpelier by telling school boards and school unions, teachers unions, that they can't negotiate a particular section of their agreements, healthcare. Nobody seems to know if that is a power that the state has. Do you, either of you have an opinion on whether you have that authority? The legislature through the normal legislative process could change the nature of collective bargaining between teachers and school boards. These kinds of decisions typically go through a lengthy, exhaustive process, bringing labor management and other interested parties together to see if that's an advisable thing to do. Right. And like many of the elements of this particular proposal, policies which are decades in the making are being asked to be reconsidered in essentially a week and a half. That is the fundamental struggle, but that would require a statutory change. And I'm not sure all of your viewers are going to appreciate, this is a $1.5 billion enterprise, K-12 education in the state of Vermont. The legislature should evaluate the proposals brought by the administration, and we're committed to doing that. But to do that evaluation in four or five days is an effort that I'm not sure voters would want us to try and squeeze into such a condensed time for, I mean, how could we possibly do that? Right. Well, it undermines the voice of Vermonters, too, because one of the things we pride ourselves on in Vermont is really having a human-scaled government, a human-scaled democracy where people can just walk in the building, hang their coat up right next to any committee chairs, and sit in on committee. You can't do that in a lot of legislatures in state houses around the country. Right. And people can come in and say, hey, I'd really like to testify on this issue. You know, I have constituents coming in tomorrow for an Act 46 discussion. Yeah. And to, but all of that takes time. Right. To be able to give that time to Vermonters that is due to them so they can participate in their government. And to have a proposal on the table that would require us to silence the voices of people that would like us to, you know, to listen to their perspectives from all over the county in all of the many diverse educational settings and communities that we have, I think really undermines democracy. Yeah. The second legal question, again, is the Brigham decision, which the Supreme Court decision required that education around Vermont be substantially equal. And under Governor Scott's proposal, well, first we should say the statewide average pupil cost is about $19,000 right now. But there are some schools where that's lower, some schools where that is higher. And Governor Scott's plan would lock each of those schools into where they are now essentially forcing low spending schools to remain low spending schools and high spending schools to remain high spending schools. Do either of you have a concern that his proposal would violate the substantially equal ruling that is required here in Vermont? For me, I think the, it's an open question about the constitutionality. I think that the element of the proposal that raises the most concern on the equal opportunity front is that if some communities have the capacity to raise an additional 5% on their local grand list, that others do not. You're right off the bat, you're creating an inequity for the students who live in those two communities. And Bennington's grand list is certainly different from Burlington's grand list. That's right. That's what got us into the Brigham decision in the first place. And, you know, in the six towns that I represent, there are vastly different capacities for raising money in those communities. And again, it's not a question that can be answered in, you know, the few days that we would need to all act in order to set communities in a different direction. Yeah. And just as a word, I mean, one of the challenges, something like this always becomes politicized to some degree. Governor in a budget address lays out a kind of a big vision. Legislature reacts right now. You have divided government. And so there's a tendency to pit it as Republican governor, Democratic controlled legislature. And in truth, public education in Vermont has been a nonpartisan issue for all of these years, largely because it's locally controlled. And then here we are descending on these issues. One of the concerns that I have about the politicization of this is it avoids one of the real questions about how do we actually manage our expenses better in the K-12 education system, which both the legislature and the administration have a strong interest in. And the proposal as it stands today would actually treat equally districts that are poorly managed and districts that are very well managed. And it's that blindness or neutrality on proper management and poor management that I think leaves much to be desired. Yeah. So bottom line, are your bodies willing to tell local communities that the state is, that they must follow what the state says? I don't know that missing answer. I think, you know, we talked earlier about saying, look, until the law changes, you need to follow existing law. Right. And we've already started hearing from school boards, from community members saying, well, wait a minute, you know, we can't shift gears this fast. Our budgets are already, you know, the warnings are already at the printers. We're already, we've already had votes in community meetings. And it's asking a lot of people to shift gears very quickly and not give time and due process to something as significant as their children's education. We have, as Tim said, it's $1.5 billion that's being managed by, you know, what, 1200-ish, give or take? School board members across the state and to take $150 to $200 million worth of expenses and dump it into an education funding system that I think still needs quite a bit of work. I think we need to fix the foundation of education funding first before we go dumping a lot more expenses into that and potentially onto the backs of taxpayers. Right. In the Senate Democratic Caucus today, which met and includes 23 of the 30 members of the Senate, I would say that there was a great amount of resistance to moving to this May 23rd vote and putting a halt to everything in operation. But then the conversation shifted to a second question, which really underpins all of this, which is, does the Senate want to impose a cut on every single school district in the state of the month? And I don't, I didn't hear a lot of enthusiasm for requiring every single school district in the state of the month cut their spending. Yeah. And that's, so we don't have a, do we have a determinate, a determinate of answer at this point? No. But I would not say that it was something that people were really looking forward to support. And I would say I've had a similar response from a bipartisan group as I've had, you know, we've had, I've had some, I've had Republicans come up to me and quietly, very quietly. Yeah. Because they don't want to speak against their governor. Quietly tell me, I've already heard from my X number of schools that they can't possibly do this. They have to take this back to their constituents too. And, yeah. People get very touchy about the local control issue. And I think it's a, it's a, it's a great sound bite until people start really start understanding how much of an overreach this is. That it will end up drastically increasing your property taxes or jeopardizing and or jeopardizing your kids education. It's, it's probably not as as clean as the sound bite suggests. Okay. The governor's chief budget writer told the House Appropriations Committee there is no plan B right now. This is it. Does that mean that your appropriations committees will get to work on creating a plan B? They're the governor. I'm sorry to interrupt. And I'll missy having been the chair of a budget committee all these years. I'll just say I've been now in the Senate under three governors and each year through the inaugural address and our state of the state of the state address and the budget. A vision is laid out in certain policies. And every time the legislature responds favorably to some, not to others. And then you spend the next five months working with the administration to get to the finish line, which has happened. Every instance, but one when the legislature vetoed the governor Douglas budget on the end of his 10 years. He doesn't know. Yeah. And so I'm confident that although there's no formal plan B, if you will, that collectively will work together and get to a place where people in Vermont are held harmless from each other. I assume you would agree to share that. Yeah, we have, you know, the, the budget goes for people that don't understand the process. The governor proposes and the budget comes to the House. So the House and the Senate are each working on it. The House then amends the governor's budget to their proposal passes into the Senate. The Senate makes further amendments and then three parties all kind of talk and see where there's common ground and where we collaborate, where we compromise. And, and, you know, Vermont's Vermont's had had a really good track record of working together across party lines passing balanced budgets and. And Senator and I are not going to, are not going to let that, that track record slip on our watch. Okay. Well, we've spent the majority of our time discussing problem areas. I have just a few minutes left now. Maybe you can tell me about areas of his budget proposal that that you agree with and you would like to see move forward. I'd say the affordable housing piece is something that's really important in this state to for a whole variety of reasons. We, although our homeless rates have dropped. The fact that there are still homeless people homeless children is unacceptable. And so looking for more safe secure affordable rental housing, preventing homelessness, providing more home ownership opportunities to get home buyers into homes where they can invest in their future and start building equity for themselves. I think all of those things help to really create a strong, healthy future for Vermont. And so, so there I look forward to, to working with the, the governor's proposal on affordable housing and something that we've started quite a bit in the house and I'm glad we have a partner in that. And that proposal to be clear is $35 million in bonding in partnership with the Vermont Housing and Conservation Board to create low and middle income housing. Yes. Which we do have a crunch in this state. Senator Rash anything. Well, in addition to the housing, which I think is housing at all income levels has been a real concern both in the house and the Senate. So I'm glad to see such an emphasis on that in the budget. Two other areas that say one is the rural economy. I talked with the governor prior to his swearing in and members of the Senate have been speaking out about this as we approached January saying that we needed to reemphasize economic growth in areas that don't easily attract the high pain. Employers. So that is a particular place of common interest. The second is the movement about more dollars in the substance abuse treatment. We've made a lot of great strides, particularly relative to other states, but we are far from having a system that allows everybody who wants treatment and is ready for it to get it close by to their home. So additional resources there in some of the programs that help get kids through the very difficult family struggles that they're having. I think are all very commendable and we'll find a lot of common ground. All right. I have just a few seconds left. Are we going to be able to get you all out of this building in early May? Question isn't whether we'll get out of here in early May is will we be coming back as a result of our president in the fall. A whole topic we did not have time to get to, but there could be a major funding crunch coming from Washington, which could drive you all to come back this fall in a special session. Agreed? Yeah. Yeah, absolutely. All right. We are out of time for this week. So I thank you for joining Capital E on behalf of the Vermont Press Bureau, Orca Media and Vermont PBS. Thank you, Speaker Johnson and Pro Tem Pash. Thank you, Neil. Thank you very much.