MONTPELIER, Vt. (WCAX) – Vermont lawmakers wrapped up the legislative session in the early morning hours Saturday, passing an $8.6 billion state budget.

Lawmakers tackled issues like housing and flood recovery, but also passed a number of new tax increases, including a 3% tax on short-term rentals, a 6% tax on business software and a 3.4% tax when second homes are bought or sold. It comes as Vermonters will also see a 0.44% payroll tax starting July 1 that will help pay for child care.

The session started with flood recovery in the forefront of everyone’s mind but ended with clashes among the House, Senate and Gov. Phil Scott over taxes and spending.

The session was defined by big questions about the future of education and no federal stimulus money to fall back on.

“This has been a hard session. Perhaps the hardest session of my 20 years here in the Statehouse,” said Sen. Allison Clarkson, D-Windsor County.

State lawmakers grappling with the soaring cost of education and spiking property taxes passed a plan to raise them by 13.8%.

The plan, sarcastically blasted by Senate Minority Leader Randy Brock, almost certainly faces a veto from Governor Scott.

“Most Vermonters will be happy that we’ve tamed the property tax problem by limiting this year’s increase to only double-digits,” said Brock, R-Franklin County.

Others stressed the challenges are in contrast to massive legislation last year.

“This has been a dark year but it’s been an amazing biennium,” said Sen. Phil Baruth, D-Vt. Senate President Pro Tem.

Lawmakers also struck 11th-hour deals on retail theft, stiffer penalties for drug trafficking and Act 250 reform. The proposal is intended to balance conservation and the housing crisis.

But not everything made it, including a proposed wealth tax, a bill reforming the state Fish and Wildlife Board, another banning cellphones in the classroom and a proposal to pause the PCB testing program.

The end of the legislative biennium again put the Democratic supermajority at odds with Republican Gov. Phil Scott. In his goodbye speech to lawmakers, Scott acknowledged their differences.

“I think most of us want the same thing. We just have a different vision on how to get there. And after this session, it’s clear that we have a little more work to do,” the governor said.

Political experts say the moderate Republican governor and Democrats are divided on what degree the state should spend and tax.

“I do think you see a deeper debate over principle here between Democrats who are willing to raise more taxes and a Republican governor who thinks it’s central to his philosophy to hold the line,” said Bert Johnson, a Middlebury College political science professor.

As Scott prepares to campaign for a fourth term, we’re tracking at least six bills on the way to his desk that could end in a veto. State lawmakers will return on June 17 to attempt to override.

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