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State ofVerrnont
Agency of Administration
Offrce ofthe Secretary

lphonel 8oz-828-3322

[fax]

Suscnne R. Young, Secretary

8oz-828-332o

Pavilion Office Building
1o9 State Street, 5th Floor

Montpelier, VT o56o9-ozor
www.aoa.vermont.gov

TO:
CC:
FROM
RE:
DATE:

Mitzi Johnson, Speaker
Tim Ashe, Senate President Pro Tem
Susanne R. Young, Secretary

of

Special Session
May 31,2018

The Administration remains committed to working with the Legislature to find a resolution that avoids an
unnecessary tax increase on Vermonters during a time when we have roughly $160 million more in
revenue this year. Additionally, according to our analyst, we may see additional surplus revenue this hscal
year that could enhance our opportunity to make our state more affordable and return money to
Vermonters.

With no communication from the Legislature that you have changed course, we are still committed to
working within the process that you laid out in our first meeting, which was to take testimony through the
committee process and negotiate through some type of conference committee. As we are now two weeks
into the special session, it would be helpful to receive affirmation that a conference committee is still in
play, and when it will begin to meet. This will ensure that everyone's time is being used as efficiently as
possible as we work towards a resolution.
The Govemor has been clear he will not accept a property tax rate increase in either the residential or nonresidential rates when we have more than sufficient surplus to cover any anticipated increase and a plan
on the table to return that surplus to taxpayers over time, while investing savings back into an education
system that provides the best quality education to our declining student population
Regarding your offer to pass a budget that excludes the remaining areas of disagreement - leaving open
the oooortunitv to come to asreement on level tax
- this is an aporoach to which the Administration
15

Open.

It is my understanding from your conversation with the Governor on Wednesday, and further clarified in
your May 29 Joint Statement, that you would advance a bill that would "exclude any major points of
dispute between Governor Scott and the Legislature." The House-proposed budget in H.13, however,
does not accomplish this goal. As it stands, H.13 does not address the $23.1 million automatic tax
increase on non-residential payers, who are primarily Vermonters. By addressing only the homestead
yield in H.13, meaningful and good faith conversations on preventing an increase for the non-residential
payers cannot occur and you risk looking like your plan in proposing this budget was to allow nonresidential rates to automatically increase on July 1.

 Speaker

Mitzi Johnson

May 31,2018
Page2 of2
Assuming you intend to follow through on your commitment to "exclude any major points of dispute"
from the budget, there are at least two paths forward at this time.
One way to ensure we simultaneously address both the homestead yield and the non-residential rate is to
amend or withstand the non-residential statutory default rate of $1.59 in current law for FYlg (32 V.S.A.
$ 5402). Removing the non-residential default rate would take all concem about a government shutdown
off the table, while allowing us to meet your stated goal of resolving remaining issues through continued
discussions. However, keep in mind that we may need to either amend the budget or place additional
language in a tax bill, as the appropriations made from the budget to the Education Fund are contingent on
the tax rates set by the statewide yields and these two issues are intrinsically linked.

The other option is to have the non-residential rate revert to the prior fiscal year level as has been
proposed with the property dollar equivalent yield and the income dollar equivalent yield in section H.11
ofthe special session budget.
The Administration is fully committed to preventing rate increases on both homestead and non-residential
payers, which includes renters, camp owners, businesses and those who invest in Vermont
Please let us know what vehicle the House intends to use to remove this area of disagreement.

Thank you for your consideration of this request to work to make the special session as productive for
Vermont taxpayers as possible.
###

/.q"VERMONT