Governor Scott at odds with lawmakers over pension and budget bills

As lawmakers enter the home stretch of the 2022 legislative session, the threat of a governor’s veto now hangs over two landmark spending bills.

Governor Phil Scott is asking for changes to the Legislature’s $8.1 billion budget plan and is also asking for revisions to a pension bill that contains more than $200 million to shore up the public pension system .


At his weekly press conference on Tuesday, Scott doubled down on his criticism of the lawmaker’s pension reform proposal.

“This bill does not solve the problem,” Scott warned. “And in five to 10 years, the necessary fixes will be much more difficult for taxpayers and state employees.”

The legislation, which is due for a vote in the House as early as next week, represents a months-long negotiation between lawmakers and unions that represent state employees and teachers.

Lawmakers agreed to spend a lot more money on pensions and post-retirement health benefits. The unions, in return, approved increases in workers’ pension contributions and also agreed to modest reductions in pension benefits.

Although Scott said he supported the general framework of the bill, he said the proposal would less than halve the pension system’s $5.7 billion unfunded liability.

“I think moving to a defined contribution plan, whether for all or for…new entrants would be a big mistake for this state.”

State Treasurer Beth Pearce

And he said Vermont needed structural changes to fix the pension problem, namely a provision that would give new state employees the option of choosing a 401K-style retirement plan.

When asked on Tuesday whether he would veto the pensions bill if lawmakers did not include the wording, he said he was “considering” it seriously.

“I can’t let this pass, because we have this opportunity right in front of us, and it seems simple to me to offer the choice, to offer people the possibility of opting for either a defined contribution or a defined benefit,” says Scott.

Many lawmakers say they’re not opposed to the set contribution option in principle, and say it might be a better option for younger employees who aren’t considering a career in state government and want some portability for their retirement plan.

Angela Evancie


VRP file

State Treasurer Beth Pearce worries about Governor Phil Scott’s proposed retirement.

They say, however, that they haven’t had time to examine the concept and explore the kinds of knock-on effects it might have on the pension system.

Those concerns intensified this week when state treasurer Beth Pearce testified before House lawmakers.

“I believe moving to a defined contribution plan, whether for all or for … new members would be a big mistake for this state,” Pearce said. “It would increase the costs of the system. This does not resolve the unfunded liability.

Pearce, whose office oversees the public pension system, said she had been review the analyzes on defined contribution plans.

She said case studies in other states have shown these plans can increase overall retirement costs and undermine employees’ financial security after retirement.

The budget

Scott said the budget approved by the Senate this week is an improvement over the spending plan passed by the House.

But he said he could not accept the Legislature’s decision to completely eliminate funding for a $50 million capital investment program in his budget proposal.

“The fact is, investing in initiatives to grow the economy, make Vermont more affordable, retain and attract the workers we desperately need will do much more to change our trajectory than the bridge funding the Legislature has prioritized. .”

Scott said he wants to use the one-time infusion of federal funds from the US Recovery and Reinvestment Act to fund infrastructure and economic development initiatives that will pay long-term dividends.

Scott said lawmakers, meanwhile, seem to be more focused on “systems of government.”

“We’re going to get to yes. We still do. We’re going to figure it out. We’re going to stay engaged with the executive and we’ll pass a budget.”

Senate Speaker Pro Tem Becca Balint

Caledonia Sen. Jane Kitchel, chair of the Senate Appropriations Committee, acknowledged this during her conversation with reporters on Wednesday.

“I think when we were coming in and looking at the budget: the critical systems that Vermonters rely on, and those are the mental health systems, our treatment systems, as well as our long-term care systems that help keep Vermonters elderly or disabled in their homes and communities,” Kitchel said.

The Senate budget, for example, nearly triples the proposed increase in Scott’s budget for community mental health agencies. The Senate also increased state college funding by $20 million over what Scott had requested.

Senate Speaker Pro Tem Becca Balint said Wednesday she was confident the House, Senate and administration would eventually iron out their differences.

“As for concerns about whether we will continue to fund essential services, we will come to yes,” Balint said. “We always do. We’re going to find out. We’re going to stay engaged with the executive and we’ll pass a budget.”

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