Rep. Curt Taylor's Session Journal

Budget Battles - What does it mean?

Governor Phil Scott has vetoed the general Assembly's $8.4 billion budget. Is that a big deal or not?

On the one hand, there is the Vermont State Constitution. Chapter 2, Section 27 consists of one statement: "No money shall be drawn out of the Treasury, unless first appropriated by act of legislation."  That's surprisingly clear. The legisature's attorneys agree. State government cannot pull money out of the Treasury without a budget bill directing how state funds can be spent. Vermont's fiscal year (FY2024) begins July 1st. Last year's budget covers up to that date. After that . . . no one gets paid. Sounds serious.

On the other hand, budgets have been difficult in the past:

• In 2017 (Governor Scott's first year as governor) he vetoed the budget (H.518) and  three other bills. H.518 had passed the House with a vote of 97 to 41,  and the Senate with a 22 to 6 vote. The House met for a veto session on June 21st and failed to override the veto with a vote of 84 to 55. The vote counts are important. It takes a two-third vote of members present to override a veto. With all members present, 100 votes are needed in the House, 20 in the Senate. The first 97 to 41 vote indicated that there might not be enough votes to override. That proved to be the case. With a little more than a week to the July 1st deadline, most of H.518, along with some changes to suit the Governor, was put into a new budget bill (H.542) which was quickly passed by both the House and Senate. It was signed by the governor on June 28th.

• In 2018 the Governor again vetoed the budget (H.924).  That bill had passed the Senate with a 29 to 0 vote, and the House by 117 to 14. That's strong support. Because of that support, no veto session was scheduled. On May 12th the General Assembly adjourned sine die which means "and we ain't meeting again until next session." But the Governor vetoed H.924 on May 25th. The 2018 session was the second session of the biennium, and when a bill does not make it through the whole process it dies. There would be no opportunity to override H.924. With no budget and no veto session in which to write a new one, the Governor called a special session of the Legislature and we met again on May 23rd. 

The governor had also vetoed thirteen other bills so the Legislature met repeatedly until June 29 to consider various legislation. A new budget bill (H.13), essentially the same as H.924, was created. By June 7th both the House and Senate passed H.13, but the votes were telling: House - 83 to 40, Senate - 22 to 3. Emboldened, the Governor vetoed H.13 on June 14th. A House override vote on June 19th failed (90 to 51) and Vermont was again left with no budget. Changes were made. H.13 was rewritten as H.16 and came to the House for a vote on Friday, June 22nd. At 15 minutes before midnight the House approved H.16 by a voice vote. But the drama wasn't over. 

Late in the evening, after a recess for dinner (and drinks for some) there was confusion. On Monday, first thing, a member moved to reconsider the Friday vote. Do it all again. Eventually, H.16 passed the House and Senate with voice votes on June 25th. It was delivered to the Governor on that day. The Governor did not veto it. He did not sign it. He let it go into effect on July 1st without his signature. During that special session thirteen bills were passed by both the House and Senate. Eleven became law.

• In 2019 the budget battle was between the House and Senate, not the General Assembly and the Governor. The budget bill (H.542)  went through the normal process of back and forth (House and Senate) and finally, to a Committee of Conference. But in the last week of the session, disputes between the House and Senate relating to other bills kept H.542 from being considered, though the Committee of Conference had met with agreement. On May 24th (a late date for a session ending) the Speaker of the House sent a memo to the Senate leadership that they had until noon to bring H.542 up for a vote. Noon passed. "Fine." said the House. So the House took a bill that had already passed the Senate (S.141) and turned that into the budget. The 216 pages of the budget were written as an amendment overwriting the 4-page S.141 which was "an act relating to nutritional requirements for children’s meals." Nutritional requirements for children's meals were replaced by the State budget. Because that bill had already passed the Senate, the House could pass it and be done. And that's what the House did. S.141 passed on a voice vote and the House began the process of adjournment. The Senate could do what it wanted, but the House was done with the budget. This scared the Senate into action. They quickly passed H.542 and sent it over to the House, which quickly agreed during the final process of adjournment. The budget was delivered to the Governor on June 12th and signed into law on the 18th.

• 2020, 2021, and 2022 saw consensus budgets that passed with overwhelming support and no vetoes ( H.969, H.438, and H.740 respectively).

What's the problem with this year?

The Vermont Senate and House of Representatives agreed on a FY2024 budget (H.494) on May 12th just before the General Assembly adjourned. There is always a chance that the Governor might veto a bill, so members were asked to reserve June 20th to 22nd for a possible veto session for override votes on anything that might be vetoed. When the Governor delivered his session-closing speech he intimated that he would see us in June, but we did not know exactly what bills he might veto. 

The budget was delivered to the Governor on May 22nd. He had five days to either approve it, veto it, or let it pass without his signature. Last Saturday, the last of the five days, he vetoed the budget. Because we had not adjourned sine die, there will be a veto session.

The Governor doesn't veto a State Budget if he knows an override vote will succeed. It's an expensive way to just make a statement. In fact, the budget did not pass the House with a firm veto-proof majority of 100 or more votes. It passed with a vote 90 to 53. Where's that supermajority? The Republicans were joined by the Progressives and some Democrats. The Republicans don't like the increase in taxes and the growth of spending. The Progressives protested the lack of a plan and resources for the homeless population slated to be released from hotel rooms paid for by the State. How will those Democrats and Progressives vote when it's a veto override? No one knows for sure. 

Paths forward

There are several paths forward:

1. Override the veto;

2. Propose a new short term budget;

3. Propose a new full-year budget;

4. Descend into financial chaos.

As you can tell from the above budget battles, things can happen quickly when they need to. When the House meets on June 21st there will be an override vote. If it succeeds, the Senate will also vote. If that succeeds, Vermont has a budget and we're done. If either of those votes fails a new budget will be quickly drafted. It may include concessions to the Progressive, but it only requires a simple majority to pass and be sent to the Senate. The Senate can pass it with the same simple majority, and it will be up to the Governor (again). With less than a week to the end of the fiscal year, will he veto it again if it's essentially the same budget he vetoed before? Maybe. Then what? Another override vote? Will the Progressives decide to join with the Democrats and override? 

Conclusion

The 2023 legislative session is not over. We only adjourned temporarily. One way or another, by July 1st we need a budget.