LAST YEAR’S budget veto and override were the exceptions to the rule.

This year, after many lines drawn in the sand, the administration and legislative leadership came to a compromise again on the state’s budget less than 24 hours before we closed the session.

And once again, after that agreement, the House and Senate passed some of the biggest bills of the year with as little as a couple of hours to skim them.

On the last day, we passed 16 bills from the most significant to the tiniest .They included (in chronological order):

- resolution to Department of Homeland Security asking for re-evaluation of need to expand a border crossing at Morses line, condemning local farmland;

- Challenges for Change bill, attempting to identify efficiencies to make up for $38 million removed from the budget at the start of the year;

- capital construction bill;

- creation of an Agricultural Development Director;

- repeal of unnecessary boards and commissions;

- appropriations bill for the state budget;

- transfer of mobile homes;

- miscellaneous changes to public retirement system;

- maintenance of private roads;

- education bill with incentives for regionalization;

- provisions regarding sale of the Boylan state airport

- interference with internet ticket sales;

- contested housing security deposits;

- changes to the use value appraisal program (“current use”);

- miscellaneous tax bill; and

- removal of bodily remains from historic cemeteries.

Did we really leave with a balanced budget? After all the hype over revenue losses and cuts to vital programs, did we solve it all in less than 24 hours with both tax cuts and added funding to some programs?

Time will be the judge, but the questions left are ominous:

Will we actually receive the $62 million that is sitting in Congress, awaiting a decision on extending the added funding for Medicaid from the original federal stimulus package?

Will the Challenges for Change program actually create more efficiency savings than we approved on the last day, when even many of the proposals already in the bill look shaky in achieving the proposed outcomes?

The body language from department commissioners made it clear that many of them joined those legislators who believe the process is a fictitious way for the legislature to cut the budget without taking responsibility for the cuts. Two already announced their resignations just days after the session closed.

We left a hole of $10 to $12 million of the $38 million “challenge” for government reforms, and were told by the Appropriations Committee for the first time ever – on the last day – that it was “not the original intent” to identify all $38 million in savings before the end of the session.

Translation: it was never the intent to finish the session meeting our responsibility to create a balanced budget.

Another budget hole will be added when the current use bill is vetoed, as is generally expected; many believe that changing the rules to save money breaks faith with landowners who already entered their property into conservation use in exchange for tax recognition of that use.

The governor achieved three key goals to stimulate business growth: elimination of a proposed delay of the state component of a federal tax break to help manufacturers; roll back of last year’s estate tax; and roll back of part of last year’s new capital gains tax.

The education tax rate will also not be increased. If school boards are able to repeat the incredible work of this past year in holding budgets down, the only major factor that can still increase local property taxes is the change in property value compared to other towns (the “common level of appraisal” – a funding problem we did not fix.)

However, there were changes to how income sensitivity applies. Most Vermonters pay their property taxes based in part on income, and the change will place some new limits, resulting in a tax increase for those individuals.

The value of homes worth more than $500,000 will not be eligible for a discount above that threshold, and the definition of household income for eligibility will now include up to $10,000 of non-income assets.

I do believe that our income sensitivity program has been overstretched, but I voted against this change because it applies starting with the 2010 tax year, and I believe retroactive taxes are simply wrong.

What did the Democratic House and Senate leaders trade off for the tax agreements?

The governor agreed not to veto a budget that dips deeply into the caseload reserves (“rainy day funds”) if the bonus federal funds do not come through, despite the potential for setting up an even deeper budget crisis next year.

There was also a deal on the amount of control the governor will have to cut the budget if savings fall short. The way it was disclosed to the legislature represented one of the dirtiest moments I have ever seen in Vermont’s House of Representatives.

Because the Challenges bill raised such doubt about full savings and what would happen if the goals fall short, there was debate was over how much the governor could cut in programs without the approval of the Joint Fiscal Committee (legislators representing the major financial committees during the “off session.”)

An amendment was proposed to reduce what the governor could cut without Joint Fiscal approval, from the standard five percent to three percent.

The proposal was defeated after the Appropriations Committee assured Rep. Paul Poirier of Barre that the Challenges bill language restricted cuts to any specific program by the same five percent that usually applies to the budget as a whole.

Not yet on our desks was the main budget bill. The Appropriations Committee, obviously, knew everything that was in it.

The Appropriations bill was used as the mechanism to capture the deal with the governor from the evening before so that passing Challenges could be expedited. It had committee amendments in it to the very Challenges bill that we were debating.

The Challenges bill was still eligible for amendments that morning, while the budget bill, coming from a conference committee, would not be.

Among the amendments in the budget was a phrase had been added to the restriction on the governor’s authority to make cuts: if the Joint Fiscal Committee disapproves of a plan to cut a program by more than five percent, the administration “may proceed as originally proposed.” No approval needed; no limits.

As we reviewed the budget bill in the afternoon, a stunned Poirier asked why that reversal in language, by committee amendment, was not referenced when he asked about limitations on the governor’s authority in the Challenges bill that very morning.

The answer? He hadn’t asked about any language in the budget bill. He asked about the language in the Challenges bill, and received an accurate answer about that specific language, in that specific bill.

There is a great deal more to share about the final days of the session, and I will follow up with some added details in a final wrap up report. Please let me know if there are specific bills or issues that you would like to know more about. You can reach me at 485-6431 or by email at counterp@tds.net. In addition, you can read my full vote explanation against the Challenges bill, protesting the growing lack of transparency in the legislature, by looking up the final day’s House Journal at www.leg.state.vt.us, or by checking my blog site, http://annedonahue.blogspot.c om/