MONTPELIER — No three individuals wield more influence over the contents of the state budget — and the taxes that will be used to pay for it — than Gov. Peter Shumlin, House Speaker Shap Smith and Senate President John Campbell.
In the waning days of the 2013 legislative session, they will serve as the principals in a high-stakes negotiation over the fiscal priorities of Vermont. Later this week, they will emerge from their bunkers, compromise in hand. And each man’s ability to shape the terms of that bargain will depend in large part on his powers of persuasion.
Smith and Campbell, both lawyers, and Shumlin, a real estate investor and businessman, are all well versed in the art of the deal. Given the distance between them on key aspects of the fiscal year 2014 revenue plan, their skills will no doubt be put to the test.
“The most essential part of any deal is knowing the people you’re sitting across from, understanding what makes them tick,” Campbell said Friday.
These men aren’t strangers. Campbell and Shumlin spent nearly a decade together in the Senate. And in Smith’s first two-year term as speaker in 2009 and 2010, he and then Senate President Shumlin bonded in opposition to Republican Gov. James Douglas.
As members of the same party, these Democrats’ political interests are, to a degree, bound together. But Campbell said that won’t necessarily make the budget talks any easier.
“We’re all trying to reach the same goal,” Campbell said. “But we may differ as to the vehicle.”
Their jobs were made easier late last week by updated revenue projections that forecast an end-of-year surplus of about $16 million. As per statute, half the money will automatically be deposited into the education fund. But the remainder will offset a sizable chunk of $10 million to $34 million in new spending that appears in various versions of the fiscal year 2014 spending plan.
Still, substantive disagreements remain. Will Smith and Campbell cede any ground on Shumlin’s push to reduce the earned income tax credit? Will Shumlin assent to even a portion of the shrinking of income-tax deduction allowances in both the House and Senate revenue packages?
Will Vermont assess a $15 million health care tax on employers that don’t provide insurance in fiscal year 2015, as Shumlin and the Senate are urging? And will the budget increase for childcare subsidies end up closer to the $3.3 million budgeted for by the House? Or the $17 million called for by Shumlin?
Much depends on how effectively each man makes his case to the others.
“What you do is, until the appropriations bill and revenue bill has passed your chamber, you focus on how to do the best work to get it passed through your chamber,” Shumlin said Friday. “Then all of a sudden you wake up the next morning and go, ‘oh my god, we’ve got to deal with the executive branch of government.’”
In Smith and Campbell’s case, that means dealing with Shumlin. When it comes to getting his way in backroom deal-making, Campbell said, the incumbent governor “is very good.”
“The governor is probably one of the best negotiators I’ve ever dealt with,” Campbell said. “He’s got an Irish touch, even though he’s not Irish.”
Campbell, a longtime trial attorney, said his years of courtroom experience will serve him well.
“You have to know your end game,” Campbell said. “There are things that you certainly would give on, for quid pro quo. But there are also items that are sacrosanct.”
Smith said the horizon on that end game is equally important.
“I think my experience allows me to take a longer view of how these things play out,” Smith said.
Shumlin said the key is to “listen.”
“Listen. Listen and don’t be a jerk,” Shumlin said.
That it’s a three-way negotiation, Campbell said, is not an insignificant factor.
“You want to know who your ally is,” Campbell said. “And you can’t let one party split you off from another.”
Smith and Campbell will also have to juggle the myriad interests of their respective bodies, a task that Campbell said is especially difficult for the speaker.
“He’s got 150 people to deal with, so he may find it more difficult to try to abide by and protect his members’ feelings and beliefs,” Campbell said.
Smith, though, who orchestrated politically complicated veto overrides on gay marriage and the budget in 2009, has proven himself an adept extractor of concessions.
“I am a firm believer, having done this for awhile,” Smith said, “that there is always room to get to yes.”
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