Scott proposes level budget, seeks education mandates from Montpelier

Editor’s note: This story was updated at 6:15 p.m.

MONTPELIER — Republican Gov. Phil Scott has proposed a massive makeover of the state’s education system that focuses on students from pre-K through college and asks lawmakers to impose new conditions on local school districts to help achieve his vision.

Gov. Phil Scott delivers his first budget address to lawmakers on Tuesday, Jan. 24. Scott proposed sweeping changes to the state's education system that would impose mandates on local school districts. (Times Argus/Stefan Hard.)

Gov. Phil Scott delivers his first budget address to lawmakers on Tuesday, Jan. 24. Scott proposed sweeping changes to the state’s education system that would impose mandates on local school districts. (Times Argus/Stefan Hard.)

Scott, who was sworn in as governor earlier this month, delivered his first budget address to the Democratic-led Legislature Tuesday, laying out bold, controversial proposals that face long odds with lawmakers.

The new governor is asking lawmakers to force teachers to pay at least 20 percent of their health care insurance premiums to bring them up to the level paid for by state employees. That will save the state $15 million. But facing down the Vermont National Education Association — the state’s largest labor union — is not likely something many Democrats, or even some Republicans, are likely relishing.

Additionally, Scott has asked lawmakers to pass legislation mandating that local school districts fund their 2018 fiscal year budgets at 2017 levels. Level-funding local school budgets will save the state $41 million, according to the Scott administration. After this year school budgets would grow or decrease based on student populations.

He pleaded with lawmakers to help him redesign the state’s education system.

“I’m not asking school districts for anything more than what I’ve asked from state government. We will be tightening our belts in Montpelier and rethinking every program and service at every level,” he said. “So I’m asking you to remember — Vermonters need this. Please, please don’t instinctively lock up with resistance to change. I promised to make difficult choices to put Vermont on a more sustainable path. And this is one of them.”

The request would be an extraordinary grab of power from local districts that runs counter to the “bottom-up” approach to governing that Scott promised in his Jan. 5 inaugural address. Scott gave no indication during the fall campaign that he would seek such sweeping changes to the state’s education system.

Lawmakers applaud after Gov. Phil Scott delivered his budget address. (Times Argus/Stefan Hard)

Lawmakers applaud after Gov. Phil Scott delivered his budget address. (Times Argus/Stefan Hard)

Susanne Young, Scott’s secretary of Administration, told reporters in a budget briefing Tuesday that the plan could result in the closure of some Vermont Schools.

She said the plan does include a “relief valve” for districts that are unable to achieve a level-funded budget. They would be allowed to assess a one-time fee on their property grand lists to cover costs above level-funding.

Scott said such actions are necessary to bring property taxes, which fund public education, under control, and to invest new resources into early child care and higher education.

“To start us on this new path, I’m proposing a realignment of priorities and spending that allows us to unify the system from early care to higher education and trades training,” Scott said in his address. “Here’s the bottom line — for the future of our kids, for our teachers and for our economic well-being, we need to act.”

Scott said the state will need to provide local school districts time to redo the 2018 fiscal year budgets they’ve been working on for months. He proposed a special statewide election on May 23 for local communities to vote on level-funded budgets instead of having voters weigh in on Town Meeting Day in March.

The savings from Scott’s plan would be reinvested in early and higher education. He called for $9.6 million in new spending on early education, including $7.5 million for the Child Care Financial Assistance program, and $1 million for full-day pre-K programs for impoverished children. He also called for a $600,000 grant to develop a model that helps childcare providers share services and $500,000 for pilot programs at the municipal level.

“Numerous reports show Vermont is among the least affordable state for child care. This is not just an education issue, it’s a workforce issue that undermines the security of families and slows our growth,” Scott said.

Higher education will see an additional $6.5 million in spending under Scott’s plan, including $4 million to the Vermont State Colleges system. The University of Vermont and the Vermont Student Assistance Corporation would see an additional $1 million each in state funding.

Rounding out Scott’s education plan is a proposal to shift the retired teachers’ health care plan and the liability for teachers’ retirement plans to the education fund. His proposed budget increases the annual transfer from the general fund to the education fund to cover the costs and prevent an increase in property taxes.

Scott said his budget proposal is balanced and closes a gap between revenues and spending that is projected to be more than $70 million. He additional savings in the budget will come mostly from the Agency of Human Services — the largest agency in state government.

About $2.1 million will come from reducing administrative costs and cutting 14 positions within AHS. Some of those cuts will result in job losses, while others are currently vacant. Additional savings will come from reducing payments by 10 percent to hospitals for unpaid care they provide. The reduction is achievable because more people are now covered by health insurance plans, he said.

Consumers on Vermont Health Connect, the state’s online health insurance marketplace, who do not qualify for subsidies will be required to purchase insurance directly through insurance carriers, removing the state as a “middle man” in the transactions, saving the state another $2.8 million.

The Department of Corrections will see a reduction in its budget of about $3.5 million from the closure of the Southeast State Work Camp in Windsor. Expanding the use of electronic monitoring and home detention will save another $1.7 million, according to Scott’s proposal.

Scott’s proposals to address opiate addiction and provide more support to children whose parents are addicted to drugs drew rare, bipartisan support Tuesday.

“We cannot let this go unaddressed on our watch. We must not, and we will not, fail these children,” Scott said.

Overall, Scott’s proposed general fund budget for the 2018 fiscal year is 0.44 percent less than what he has proposed in the mid-year budget adjustment for the 2017 fiscal year.

“Today I present a balanced budget that does not increase taxes or fees, does not make program cuts that impact Vermonters in need and matches base spending with base revenue — not one-time funds — to avoid future shortfalls,” Scott said. “In fact, base spending in the general fund for the next fiscal year will be below base spending for the current one.”

Democratic leaders in the Legislature were restrained in their initial reaction to the budget proposal immediately after Scott’s address, but foreshadowed major challenges to Scott’s agenda in the weeks and months ahead.

House Majority Leader Jill Krowinski, D-Burlington, said she was pleased with Scott’s proposal to seek more affordable housing. He proposed a $35 million bond in partnership with the Vermont Housing and Conservation Board.

“Some of the things that we heard today that we can see working on very well together are around his housing initiatives. We need to invest in housing that helps our most vulnerable Vermonters,” she said.

But Krowinski raised doubts about Scott’s education plan, saying the state passed Act 46, calling for major changes to school governance just two years ago.

“To propose such a major overhaul right now, we just don’t think it’s the right time,” Krowinski said. “We want to absolutely make sure that every child in Vermont gets a fair shot at education. When we hear policies that shift the conversation and say that we need to create a top-down policy around education, that’s not what we heard from constituents when we were out campaigning this summer and fall.”

House Education Committee Chairman David Sharpe, D-Bristol, was even more pointed in his critique.

“Let’s be clear, the governor’s proposal adds costs to the education fund and raises property taxes,” Sharpe said.

Sharpe said Scott’s call for new investments in early and higher education are “laudable,” but the governor’s proposal “puts the responsibility for funding into the education fund so the governor doesn’t have to propose higher income taxes but every community in the state has to raise property taxes.”

Senate President Pro Tem Tim Ashe, D-Chittenden, said some of Scott’s proposals align with those of Democrats in the Senate. The Senate will give Scott’s proposals “due diligence,” he promised.

Senate President Pro Tem Tim Ashe, D-Chittenden, speaks to reporters following Gov. Phil Scott's budget address. (Times Argus/Stefan Hard)

Senate President Pro Tem Tim Ashe, D-Chittenden, speaks to reporters following Gov. Phil Scott’s budget address. (Times Argus/Stefan Hard)

But, he, too expressed doubts that Scott’s education proposals could be enacted.

“This will require, if it were to go into effect, very swift and very dramatic decision-making at the school district level to level-fund spending at last year. You can only achieve that if you reduce personnel, cut programs, take people out of the classrooms,” Ashe said. “The committee will have to really take a significant amount of time trying to understand how we could do it without disadvantaging the education kids get.”

Meanwhile, Senate Education Committee Chairman Phil Baruth, D-Chittenden, called Scott’s education proposals “indigestible.”

Vermont NEA President Martha Allen said Scott’s education plan will “do nothing but hamper the ability of Vermont’s local communities to invest in their children.”

“By freezing property tax rates, capping school budgets, firing hundreds of educators and seeking $15 million in pay cuts from educators, the governor will not achieve what we all want — a top-notch education for our children,” she said.

Allen also criticized Scott for shifting the cost of early and higher education to property taxpayers.

“We believe that Gov. Scott’s proposal to begin boosting support for higher education is a good start. But we disagree with his proposal to turn to Vermont’s property taxpayers to foot the bill,” Allen said.

“If we want more, we have to do more. By taking such a blunt hammer to our local public schools, Gov. Scott will make Vermont a far less attractive place to live, work and raise a family. We give the governor’s education proposals an ‘Incomplete’ as it needs work to gain the support of the women and men who teach Vermont’s students,” she added.

Higher education officials praised Scott for increasing funding. Vermont State Colleges Board of Trustees Chairwoman Martha O’Connor said “Scott understands the pivotal role the Vermont State Colleges play in the current and future economy of this state.”

“With his funding proposal, made during a challenging budget year, the governor is taking a strong stand for post-secondary educational opportunity for all Vermonters,” O’Connor said.

Read Gov. Phil Scott’s budget address below:

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