House leaders wary of new taxes to fill shortfalls

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MONTPELIER — When the state House of Representatives returns on Aug. 25, it will work to set a budget that does not rely upon new taxes to close its revenue gaps, House leadership said Monday in a news conference discussing the results of the session to date.

The House adjourned Friday after passing a first-quarter fiscal 2021 budget, allocating $1 billion worth of federal COVID-19 relief funds, and passing what members hope is the first of many steps to address systemic racism and police use of force.

The Legislature and Gov. Phil Scott's administration earlier agreed to set a budget for the first three months of the new fiscal year, then return in August when more accurate revenue projections are available.

"We made the decision fairly early that we didn't want property taxpayers to pay for cost of the pandemic," State Rep. Janet Ancel, D-Calais, the chair of the Ways and Means Committee, said Monday.

Ancel, joined by House Speaker Mitzi Johnson and state Reps. Jill Krowinski and Kitty Toll, said the first quarter budget passed by the Legislature included a "a very modest increase" for education. Instead, the House will look at deficit spending and borrowing before turning to new taxes or fees, Ancel said. "We don't see additional revenue as being a solution to that problem," she said.

There's also the potential of using remaining CARES Act dollars to fill in the gaps in the Education Fund — if the federal government will allow that. At present, the federal government requires that funds be used for COVID-19 related expenses and needs, and not for previously budgeted items.

Johnson, D-South Hero, said the state's congressional delegation and the U.S. Treasury have indicated a possibility that restriction could be lifted. While U.S. Senate Majority Leader Mitch McConnell, R-Ky., opposes such a change, "there will be a negotiation," Johnson said.

Krowinski cited legislative accomplishments "creating a Vermont that works for everyone." She included votes to raise the minimum wage, remove references to slavery from the Vermont Constitution, provide grant funding to women- and minority-owned businesses, and a police reform bill, S. 219 which mandated race data collection and reporting and police body camera use and criminalized the use of prohibited restraints resorting in serious injury or death.

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"We care deeply about justice and equality and in this time of national outcry we are hearing this loudly and clearly from constituents," said Krowinski, D-Burlington, the House Majority Leader. "We are listening and we are acting."

More work will continue on racial justice and policing issues in August, and in the next legislative session in January, Johnson said. That will include discussions on accountability for the Criminal Justice Training Council, the individual actions of police officers, and police use of force.

"Those are some of big topics. But at this point we are not limiting the conversation," Johnson said, adding that proposals to expand civilian oversight of police forces is welcome as part of that discussion.

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On Monday, Johnson, Ancel and Toll walked reporters through the House's CARES Act appropriations, including $275 million to stabilize the health care system, $28 million for front line workers' hazard pay, $20 million to improve broadband connectivity, $4.7 million for the Vermont Foodbank.

As for the $140 million in remaining CARES Act funds, Johnson is confident it will be put to good use by the federal Dec. 31 deadline. If not allocated and spent, or not spent on intended purposes, "we would scoop it back and get it back out to another area that could use it," she said.

As for assuring the funds are used properly, Johnson said most of that responsibility falls upon the administration and Auditor of Accounts Doug Hoffer's office.

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"Everyone getting grants is aware audits are a possibility," she said. "We tried to create as much transparency as possible."

Johnson said the Statehouse staff deserves "the vast majority of credit" for the body's ability to move quickly from its traditional legislative process to its current social distance model, relying upon conferencing technology to conduct its business. "I am so overwhelmed with gratitude" for the staff's efforts, she said. Johnson also credited Scott for his handling of the pandemic and the pace at which his administration is reopening the economy. She added that her constituents are most concerned with the lack of a statewide mandate on wearing masks, and how that has created piecemeal policies and compliance across the state.

"Honestly I think he is pacing [the reopening of the state economy] appropriately and really basing his decisions on the health data that's out there," Johnson said of the governor's actions.

That was in marked contrast to Johnson's assessment of the federal response, which she deemed "an unmitigated disaster."

"The United States is leading the world on all of the wrong indicators," she said. "That will make it so much harder for us to get back to normal."

The largest single item in the House CARES Act package is $275 million for stabilizing a health care system "that stepped up when we needed them to," Johnson said. That funding will be distributed based on need rather than as a proportion of what they currently spend, she said, in the interest of "making sure we keep all these providers afloat.

It's not expected that Scott will veto any of the CARES Act funding, Johnson said. "He's as anxious to get it out the door as we are," she said.


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