Douglas says he will veto budget
BY LOUIS PORTER Vermont Press Bureau | May 16,2009
MONTPELIER – Gov. James Douglas said Friday he will veto the state budget drafted by lawmakers and call them back to Montpelier on June 2 for a special session.
The governor has not yet outlined many of the details of the competing budget he will ask legislators to consider, beyond hinting that it will involve more cuts in welfare and land conservation programs and fewer taxes.
"If my only choice is between allowing your fiscal 2010 budget to become law or a veto, I must choose veto," Douglas wrote to legislative leaders.
That would apparently be the first veto of a state budget in Vermont.
Senate President Pro Tem Peter Shumlin, D-Windham, said he has heard it before.
"The speaker and I are going to continue to urge him to reconsider his decision," Shumlin said. "We passed a budget that balances the need to make cuts with an income tax cut for the middle class."
In his letter to Shumlin and Speaker of the House Shap Smith, D-Morristown, the governor again excoriated them for approving a budget that left a deficit in the following fiscal year, raised some taxes (although it also included some income tax reductions) and increased overall spending when federal stimulus money is included with state spending.
Douglas said he will outline his counter proposal next week. He did give some broad hints, however, that it will likely involve cuts to the Vermont Housing and Conservation Board, the state's Reach Up program, and, for fiscal year 2011, a cap on school spending.
A projected $67 million hole in the fiscal year 2011 budget as approved by lawmakers is one of Douglas' central objections to their plan for spending $4.5 billion when state, federal and school money is included.
A per pupil spending cap imposed from Montpelier – with perhaps some flexibility in total spending and special education and capital spending – is the only way to limit education fund spending, a major component of the state budget, Douglas administration officials said.
"It would interfere with local budget decisions but public education is our largest expenditure. We are not going to solve (fiscal challenges) without including it," Douglas said by telephone.
Lawmakers have said since January that Douglas' proposal to move the obligation to fund teachers' retirement to the Education Fund would raise property taxes, but with his proposal to cap spending that is not true, the governor said.
"That is the only way it would truly work in terms of avoiding a property tax increase," he said.
The legislative leaders disagreed.
"Perhaps the governor has forgotten one really important truth in Vermont. School boards and town meeting members decide how much to spend each year on education, not governors and legislators in Montpelier," Shumlin said. "If we under fund our promise to them it is a property tax increase short and simple. The speaker and I continue to oppose his property tax increase."
Shumlin said that he, Smith and other lawmakers are willing to consider Douglas' ideas. But, he added, they must be spelled out in detail first.
"If the governor continues to refuse to sign the bill it is incumbent on him to put forward a very specific plan that outlines how he would solve the problem. We welcome that," Shumlin said.
Smith said lawmakers balanced the two main options before them – making cuts in state government versus raising taxes. Ultimately they cut $80 million in General Fund spending and raised a little over $20 million in taxes once an income-tax rate reduction is included, Smith said.
"We think a 4-to-1 ratio of reductions to revenues is reasonable," Smith said.
Douglas said it is still possible that lawmakers will agree to make changes to the budget they passed that would prevent him from vetoing the bill, but he has concluded that, with a little more than 40 days left in the fiscal year, it is time to move on with the veto, and possible veto override attempt.
"I respect the fact that there are different points of view and I think presenting me with the budget, letting me act on it and having a vote is probably the best way to resolve this," Douglas said.
Unlike lawmakers' successful override of Douglas' veto of a gay marriage bill earlier this year – when the governor told lawmakers to vote their consciences and districts – he will ask them to sustain his veto this time, he said.
"I will urge them to sustain the veto," he said. "I wonder if every legislator understands the budget does nothing to address the $160 million hole in our unemployment fund."