This commentary is by Rep. Mike Mrowicki. He represents the Windham-4 district (Putney and Dummerston) in the Vermont House. He serves on the Government Operations Committee.
Living off your credit card is never a good idea. It’s a sure sign of economic distress when you start buying groceries or paying bills, like property taxes, with plastic.
Vermont is not in such dire straits to need to do so. We keep our state budget balanced and have created rainy-day reserves. We have tidied up our financial house, resulting in a strong credit rating from entities that evaluate the fiscal health of states.
Under the steady hand of Treasurer Mike Pieciak, with a coherent approach to maintaining strong finances from the administration and Legislature, Vermont has maintained its important AA+ and AAA ratings from the credit rating agencies (which have just recently been reaffirmed).
Why does this matter? The higher Vermont’s credit rating, the lower the cost to repay bonds the state needs to build and renovate schools, airports, parks, water, sewer and other infrastructure.
So why is Gov. Phil Scott trying to blow that up?
Earlier this spring, the administration suggested we pull out the plastic to pay down the property tax rates for next year, a move Pieiciak immediately asked those credit agencies about. He got a resounding “bad idea” in response.
That’s the equivalent of pulling out the credit card to cover expenses, knowing full well you still have to pay for it — with interest — later on.
We thought that was the end of such short-sighted fiscal tomfoolery, but no.
As the 2024 session wound down, the Legislature passed its annual yield bill. That’s the annual, ”constitutionally must-pass” bill that funds our schools. It raises the necessary amount of revenue to cover the cost of all voter-approved local budgets across the state. The Legislature worked for months to cover this cost, while bringing rates down from projected property tax increases originally estimated between 20%, and 25%, to an average statewide increase of 13.8%.
The governor vetoed that bill in early June and said he would have a new plan to bring those rates even further down.
We waited and waited — and waited — while the governor let the state know he was waiting on the legislative leaders to “come to the table” and get this solved before our veto session in mid-June. Legislative leadership showed up at the prescribed time and place, but the governor was a no-show, sending staff instead. Legislators were not impressed, feeling the best way to get a last-minute deal done was face-to-face with the decision-maker.
“We were led to believe that Governor Scott would be present and engaged at our meeting this afternoon and that he would offer details on a responsible plan to cut property tax rates,” Senate President Pro Tempore Phil Baruth said in a follow-up statement. “Unfortunately, neither turned out to be true. The Governor was absent, and the ideas presented by his team are among the most fiscally irresponsible he and his Administration have ever proposed.”
The administration proposal was just more legerdemain with the state ledgers. The new “plan” would empty the Education Fund’s reserves (needing to be paid back later), to spend tax revenue that wasn’t there (from future projections), to cut the universal school meals program for our kids and in effect to pull out the plastic to artificially “buy down” property tax rates this year. To be paid back by taxpayers at a later date — with interest.
All things credit agencies tell you not to do.
Sen. Jane Kitchel, chair of the Senate Appropriations Committee, condemned the lack of “fiscal responsibility” in the administration’s plan.
“Obviously, everybody would like to make the property tax increase as low as possible,” she told VTDigger. “If the proposal is to go in and use the stabilization reserve to buy down the rate, that is a practice that we never ever had considered or would consider as fiscally responsible. I have to tell you, as someone who’s dealt with budgets and short-term decisions that have huge long-term impacts, like the underfunding of pensions, it’s not a direction that I feel comfortable in going.”
House Speaker Jill Krowinski released a statement deriding the proposal as “nothing more than election year politics rather than a true commitment to collaboration.”
To make a better Vermont for today and a brighter tomorrow, the Legislature funded our schools — and lowered property tax rates — with a yield bill that’s fiscally responsible. We made sound investments to promote housing and update Act 250. We addressed rising crime rates with reasoned approaches — including more resources for courts to get those who commit crimes before a judge sooner rather than later — and to protect Vermonters from the data pirates of big tech, along with protecting our children online.
These are all bills to move Vermont forward — bills that the governor vetoed.
Let’s hope we can get on the same page, reduce the friction between the administration and the Legislature, and get things done for Vermonters. Vermonters deserve no less.
And let’s leave the credit cards in a drawer back home.
Read the story on VTDigger here: Rep. Mike Mrowicki: Put away that credit card, governor.