MONTPELIER Gov. James Douglas may veto a pending budget bill unless it is changed to include money for college scholarships, according to administration officials. The scholarship program is the one that sparked a major battle between the governor and lawmakers last year. That disagreement put the state budget bill then being crafted under threat of a veto. This time around, the budget adjustment act is the bill in question. That's the measure that makes mid-year tweaks to the state's budget to take care of additional needs or settle up changes in accounts. During last year's lawmaking session, legislators and Douglas tussled over the governor's proposed "Promise Scholarship" program. Originally, Douglas wanted to put roughly $175 million into college scholarships over 15 years, but lawmakers wanted some money to go to things like retraining for older workers. The upshot of that fight when the specter of a veto by Douglas of the entire state budget was raised was a compromise that set aside $5 million for fiscal year 2007, and the creation of a bipartisan commission to study how to spend the money. An additional $10 million was set aside for fiscal year 2008 to be spent based on the recommendations of The Next Generation Commission. But lawmakers decided during the past few weeks the scholarship proposal was not adequately fleshed out to allow the full $5 million to be appropriated in the budget adjustment bill. Instead, they put $1.7 million toward workforce development efforts through Agency of Commerce and Community Development grants, workforce education and training fund, the Vermont Student Assistance Corp. and the "dual enrollment" program through which high school students can take college courses. The rest of the money will be spent later. Douglas said he was vexed by the lack of scholarship money in the budget adjustment bill, which could leave the state "mired in the 20th century," he said. The recommendations of The Next Generation Commission, which proposed a combination of loan forgiveness, scholarships and workforce training, provided "a balanced plan," Douglas said. "I believe the Legislature should embrace it," he said. "We ought to pass it." But lawmakers said the difference between the scholarship proposal and the workforce development programs is that the workforce programs already exist, while the scholarships must be crafted from scratch. "I appreciate the governor's goal in setting up a program to keep college graduates in Vermont, but at this time it is not ready for funding," said Sen. Vincent Illuzzi, R-Essex/Orleans, chairman of the economic development committees that worked on the measure. "The promise scholarship is an idea that has not been vetted through the legislative process. It is a new program and any time you write a new program you have to worry about the details, the goals and the unintended consequences." Not including the scholarship money in the budget adjustment act which has passed the House and was approved by the Senate on Wednesday is not acceptable, administration officials said. Since the two bodies of lawmakers must reach an agreement on the final version of the bill there is still time to adjust the legislation before it lands on the governor's desk. "If workforce development money is important to include in the bill, so, too, are the rest of the recommendations of The Next Generation Commission," said Jason Gibbs, a spokesman for the governor. "The option of vetoing the budget adjustment bill is on the table." "Obviously, the governor is free to consider anything he wants," said Sen. Susan Bartlett, D-Lamoille, chairwoman of the Appropriations Committee. Everybody agreed that the $1.7 million for workforce development programs and the heads of those programs testified they had already used the money they had for this fiscal year, which has several months left to go. "These are programs that provide workforce development for working Vermonters, and they don't have any more money for this year," Bartlett said. "Vermonters are waiting on this money." But Douglas said college students trying to figure out where they are going to school are waiting as well. "Kids need to know," he said. If the $3.3 million that is left after the $1.7 million is given to workforce development programs is not spent in the budget adjustment act, it will be added to the $10 million set aside for similar programs in the next fiscal year, Bartlett and Illuzzi said. "It's not as though the rest of the money is vanishing into thin air," Bartlett said. The two heads of the Senate committees agreed that higher education aid will be considered as options for spending of the rest of the money is being worked out. His committee has already begun work on the bill deciding how that money will be spent in fiscal year 2008, Illuzzi said. "Everybody is really trying to come to terms with the details of the program," he said. But in the meantime, businesses are ready to train and hire Vermonters, Illuzzi said. "This amendment was not generated to fight with the governor. It was in response to requests from the business community, which is slowly, but steadily, percolating these new jobs," he said. "There are great jobs being created in Vermont." But administration officials worry that if a scholarship program is not included in the budget adjustment bill it will fall out of the picture. "It will be a step backward from the kind of program and preparation we need for the 21st century," Douglas said. And although he declined to issue a specific veto threat, if the budget adjustment bill doesn't become law, it won't be the first time in the state's history Vermont has done without one, Douglas said.