As I write this late Friday afternoon on May 12, I should be home in Charlotte. Instead, I am in a holding pattern in Montpelier. A number of bills are still under negotiation, all of which deal in some way with money. The budget cannot be passed until all the constituent parts are finalized. These parts include the capital bill that deals with the overhead required to run the state government, the fee bill that covers the expense of administering regulations and licenses, the transportation bill that maintains our transportation infrastructure, and the education tax bill that determines what the statewide property taxes will be. While the capital, fee and transportation bills have already passed both the House and Senate, the education bill has become the sticking point over how to deal with the new health care plans being proposed for public school teachers.
The education tax bill, H.509, was close to being finalized until Governor Scott proposed within days of adjournment his teachers health insurance plan to capture an alleged $26M savings. The fact that only $13M would apply to the FY18 budget, since the new insurance plans don’t start until January 1, has not stopped him from repeating the $26M figure. The governor insists that the only way the savings can be achieved is with negotiations between the administration and the statewide union. This runs counter to the right of workers—the teachers—to negotiate directly with their employer, the school board. With the backing of the Republican caucus, he has refused to compromise on this point. He also has proposed that only 30 percent of the savings should go for property tax reduction.
Meanwhile, the House and Senate have been working toward a way to realize the estimated savings while maintaining the integrity of the employer-employee relationship of teachers and school boards. The latest amendment passed by the Senate would require $13M to be saved in the second half of FY18, which would reduce the statewide homestead property tax by 3 cents. Based on the number of employees, each school district would be allocated a proportion of the savings, which would be achieved by negotiations between the school board and its teachers, a process that is already taking place across the state, by the way. Any difference between what the district actually saves and the allocated amount would reduce the state’s payment to the district. Since each action on a bill requires a 24-hour waiting period, the failure of the governor to work with the Legislature to find a solution guarantees that the session will run beyond the budgeted 18 weeks.
A couple of weeks ago the 2017 session seemed to be moving along nicely, with no new taxes and a budget that got nearly unanimous support. Yet here we are. Despite agreement on what could potentially be saved, the issue has boiled down to labor relations and how much should be applied to reducing property taxes. I hope that by the time you read this we’ll have a solution and a budget that won’t be vetoed.