Administration seeks $17 million more in cuts

MONTPELIER — The Shumlin administration announced Wednesday it is seeking $17 million more in mid-year budget cuts to account for poor revenues.

The announcement follows a $31 million rescission in August. Administration officials said Wednesday that the state’s economic recovery is ongoing but revenue has not rebounded as economists had previously predicted. Democratic Gov. Peter Shumlin forewarned earlier this month that additional budget cuts were likely.

“Prudence dictates that our administration take steps without delay to ensure spending does not exceed available revenues,” Jim Reardon, commissioner of Finance and Management, said in a statement Wednesday. “The sooner we take action, the less painful the reductions will be.”

Outgoing Secretary of Administration Jeb Spaulding, who will step down in January, said the state does not plan to use reserve funds to cover the budget gap. State officials will also not look to cut its debt service or retirement contributions, he said.

Officials expect another revenue downgrade in January as revenue continues to miss projections. Through October, the general fund was $12 million off target, officials said, even after the $31 million budget rescission in August.

Increases in employee health care and other benefits has put an additional $3.5 million burden on the general fund.

Spaulding said further reductions will be challenging, but pledged the state will continue to provide services to Vermonters “in a fiscally responsible manner.”

Reardon said Attorney General William Sorrell has confirmed the administration’s assertion earlier this month that it can cut up to 1 percent of the state budget without legislative approval. As a result, the state is seeking $6.7 million in additional cuts. The administration did not specify Wednesday where it will seek the reductions.

The administration is also preparing to cut an additional $5.3 million in January through the annual mid-year budget adjustment that will be approved by lawmakers.

Another $1.5 million will be sought in “efficiency savings” that were already authorized in the current budget. Reardon said the administration is requiring agencies to account for those savings to ensure the full reductions are met.

And $3.5 million in reductions is “related to current-year health care and other benefit increases that occurred after passage of the FY 15 Budget last session,” according to the administration. The administration did not make clear how the savings will be achieved.

“The Administration is acting promptly and proactively to plan for all of these reductions to the current year budget,” Reardon said in a statement. “We fully expect to comply with legal requirements to accomplish this, and to work with the Legislature to meet these total planned reductions. Planning for further cuts is hard but necessary work in this environment of slower than projected growth.”

Reardon said agencies and departments have to submit reduction plans to the Department of Finance and Management by next Friday.

Officials expect to face another budget gap in the 2016 fiscal year budget of at least $100 million. Shumlin told reporters earlier this month that he hopes to address the shortfalls in the current budget and the 2016 budget without raising taxes.

State releases amended Gruber contract

State officials released an amended contract with MIT economist Jonathan Gruber Tuesday evening, lowering the maximum amount payable to $280,000.

Gruber had a personal services contract with Vermont that was to pay him as much as $400,000 to test economic models related to Gov. Peter Shumlin’s universal, publicly-financed health care proposal.

But his work has come under fire, and a number of high profile Republicans have called for the contract to be terminated because of the questionable comments Gruber made on several occasions in the last several years.

During a 2011 hearing of the House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy advisor for President Ronald Reagan. McClaughry, in his published commentary, said Shumlin’s health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks on a video recorded by True North Reports and released last week to the online site Watchdog.org.

In other videos that came to light last week Gruber credited “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

The contract allows the the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms.

State officials announced last week that Gruber had agreed to forego any further payments for the work he was contracted to do. However, graduate assistants will continue to be paid and carry out work on behalf of the state.

Some Republicans had maintained that the original contract required official changes, and said Gruber’s “handshake agreement” with Lawrence Miller, Shumlin’s chief of health care reform, was not sufficient.

The amended contract reflects the change change in pay for Gruber.

See the contract below:

Report finds defects in child protection system

The Vermont Citizen’s Advisory Board, charged with investigating the circumstances surrounding the deaths of two toddlers earlier this year, released a report Friday stating Vermont’s “current systems, including child welfare, law enforcement, courts and community‐based services, failed to protect both children.”

Two-year-old Dezirae Sheldon, of Poultney, died in February and 15-month-old Peighton Geraw, of Winooski, died in April. Both deaths have been ruled homicides and murder charges have been filed against family members.

Gov. Peter Shumlin called on the board to investigate if workers at the Department for Children and Families and other state agencies followed existing policies and procedures, whether policies and procedures are adequate and what areas need improvement.

Read the board’s report below:

Another GOP lawmaker appears on Fox

Rutland County Sen. Kevin Mullin is the latest GOP lawmaker in Vermont to appear on Fox News to address comments by MIT economist Jonathan Gruber that have come to light in recent weeks. Senate Minority Leader Joe Benning of Caledonia County appeared on the network earlier this week.

Mullin said dealing with the fallout of Gruber’s comments is “a complicated issue.” The Shumlin administration announced Wednesday that Gruber will no longer receive payment for his work, but his team of researchers and graduate assistants will continue to be paid.

“The state’s in the position where the work is almost finished, but it’s going to be a work that the public is not going to have confidence in,” Mullin said.

During a 2011 hearing of the House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy advisor for President Ronald Reagan. McClaughry, in his published commentary, said Shumlin’s health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks on a video recorded by True North Reports and released last week to the online site Watchdog.org.

In other videos that came to light last week Gruber credited “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

Asked if Vermonters could trust Gruber, Mullin’s answer was clear. “Absolutely not,” he said.

“No one in Vermont is defending Professor Gruber. Everyone is very, very disappointed and we’re trying to make the best of a very bad situation,” Mullin said.

What would Mullin say to Gruber if given that opportunity?

“I would just let him know that he should be ashamed. That despite his obvious abilities as far as an economist and a mathematician, that the American people can make informed decisions, that it needs to be a transparent and open government and that’s not the way to conduct oneself,” Mullin said.

 

Gruber to receive no additional pay from state

MONTPELIER — Jonathan Gruber, the contractor under fire for degrading remarks he’s made in the past several years about voters and a Vermont commentator, will be expected to complete economic modeling for the state but will not receive any more pay, according to state officials.

Chief of Health Care Reform Lawrence Miller reiterated the Shumlin administration’s disappointment with Gruber’s comments on Wednesday. He also said Gruber has been informed that he will not receive further payment on the $400,000 contracted agreed to in July.

Gruber and his team have been paid a total of $160,000 so far, according to Scott Coriell, a spokesman for Gov. Peter Shumlin.

“As the Governor and I have said, the comments by Mr. Gruber are offensive, inappropriate and do not reflect the thinking of this administration or how we do things in Vermont. As we have also said, we need solid economic modeling in order to move forward with health care reform,” Miller said in a statement to the Vermont Press Bureau Wednesday afternoon. “I have told Mr. Gruber that I expect his team to complete the work that we need to provide the legislature and Vermonters with a public health care financing plan. I’ve informed Mr. Gruber that we will not be paying him any further for his part in completing that work.”

Gruber, a Massachusetts Institute of Technology economist, has a personal services contract with Vermont that will pay him up to $400,000 to test economic models related to Shumlin’s universal, publicly-financed health care proposal. Another $50,000 can be used to subcontract with Moody’s Analytics for macroeconomic modeling.

The contract allows the the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms.

Gruber, who has served as a health care advisor for the Obama administration, has also inked contracts with the federal government and other states for his unique economic modeling capabilities.

His work is now being questioned, and calls for his firing becoming more frequent, especially from Republicans in Vermont and elsewhere, because of questionable comments he has made on several occasions in the last several years.

During a 2011 hearing of the House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy advisor for President Ronald Reagan. McClaughry, in his published commentary, said Shumlin’s health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks on a video recorded by True North Reports and released last week to the online site Watchdog.org.

In other videos that came to light last week Gruber credited “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

In his statement, Miller said the work completed by Gruber will be verified by independent sources.

“As planned, following the completion of the financing plan, the assumptions and results will be fully evaluated by the other economists, including the joint fiscal office, who are advising the administration and the legislature on this matter,” Miller said.

Gruber declined to comment via email Wednesday.

Benning calls for Gruber’s termination on Fox

Senate Minority leader Joe Benning appeared on Fox News’ “On the Record With Greta Van Susteran” Tuesday to discuss recent comments by MIT economist Jonathan Gruber.

The chorus calling for Gruber’s ouster as a state contractor has been growing louder in Vermont this week. Campaign for Vermont, a nonprofit advocacy group that claims to be nonpartisan, directed people by Twitter to its website to sign a petition in favor of terminating Gruber’s contract. And a trio of House Republicans released a letter to Shumlin on Monday calling on the governor to do just that.

Gruber’s work is being questioned because of questionable comments he has made on several occasions in the last several years.

During a 2011 hearing of the House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy advisor for President Ronald Reagan. McClaughry, in his published commentary, said Gov. Peter Shumlin’s single payer health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks on a video recorded by True North Reports and released last week to the online site Watchdog.org.

In other videos that came to light last week Gruber credited “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

Gruber has a personal services contract with Vermont that will pay him up to $400,000 to test economic models related to Shumlin’s universal, publicly-financed health care proposal, often referred to as a single payer system. Another $50,000 can be used to subcontract with Moody’s Analytics for macroeconomic modeling.

The contract allows the the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms.

Gruber, who has served as a health care advisor for the Obama administration, has also inked contracts with the federal government and other states for his unique economic modeling capabilities.

Watch Benning’s appearance on Fox below:

State to retain Gruber through end of contract

Vermont Gov. Peter Shumlin said Monday that a state contractor under fire for derisive comments he has made about American voters and a Vermont commentator will not have his state contract terminated despite calls to do so by Republicans.

Jonathan Gruber, a Massachusetts Institute of Technology economist, has a personal services contract with Vermont that will pay him up to $400,000 to test economic models related to Shumlin’s universal, publicly-financed health care proposal, often referred to as a single payer system. Another $50,000 can be used to subcontract with Moody’s Analytics for macroeconomic modeling.

The contract allows the the state to use the Gruber Microsimulation Model that Gruber developed to simulate the implementation of Shumlin’s plan and test various financing mechanisms. The contract began in July and runs through Feb. 15, with an option to renew the contract for up to one year.

“I don’t see us doing that,” said Lawrence Miller, Shumlin’s chief of health care reform.

Gruber, who has served as a health care advisor for the Obama administration, has also inked contracts with the federal government and other states for his unique economic modeling capabilities.

The chorus calling for Gruber’s ouster as a state contractor grew louder in Vermont on Monday. Campaign for Vermont, a nonprofit advocacy group that claims to be nonpartisan, directed people by Twitter to its website to sign a petition in favor of terminating Gruber’s contract.

And a trio of House Republicans released a letter to Shumlin on Monday calling on the governor to do just that.

“This arrogant and disrespectful attitude is totally unacceptable and will undermine the entire process and debate going forward if Mr. Gruber continues. No one who speaks of Americans, and therefore Vermonters, as stupid, or who boasts of a process that has a “lack of transparency” should remain under contract, being paid by the very people he has insulted,” wrote Reps. Patti Komline of Dorset, Heidi Scheuermann of Stowe and Kurt Wright of Burlington. “In our opinion, Mr. Gruber has disqualified himself and we urge you to terminate his contract immediately. Failure to do so will only further erode Vermonters’ confidence in a process that has already left much to be desired.”

His work is now being questioned, and calls for his firing becoming more frequent, especially from Republicans in Vermont and elsewhere, because of questionable comments he has made on several occasions in the last several years.

Dr. Jonathan Gruber

Dr. Jonathan Gruber

During a 2011 hearing of the House Health Care Committee, then-Chairman Mark Larson read aloud comments written by John McClaughry, a former state senator and policy advisor for President Ronald Reagan. McClaughry, in his published commentary, said Shumlin’s health care proposal would lead to higher taxes, ballooning costs, poor health care facilities, disgruntled providers and long waits for care, among other concerns.

“Was this written by my adolescent children by any chance?” Gruber asks on a video recorded by True North Reports and released last week to the online site Watchdog.org.

In other videos that came to light last week Gruber credited “the stupidity of the American voter” with getting the federal Affordable Care Act passed.

Shumlin denounced Gruber’s comments on Monday but said Gruber will continue to test potential financing options for his health care proposal. Shumlin will reveal a financing proposal to lawmakers and the public in January.

“I share the dismay and outrage about his comments, and for me it’s not just what he said, it’s that he actually thinks this stuff. It’s not the way we do things in Vermont. It’s repugnant to everything that we do in Vermont and I’m shocked,” Shumlin said.

A clause in Gruber’s contract with the state says he “may advise the Governor on policy matters related to the project to assist the Governor in deliberations and decision-making related to the project.” Shumlin said Gruber has played no role in shaping policy, however.

“It’s our plan, not his. It’s our policy, it’s our hope for the future and it’s our plan. We’ve used him as a calculator not a policy advisor,” Shumlin said.

The governor said he has “never met him in my life,” but did participate in at least one group conference call regarding health care policy with Gruber. Shumlin said he could not remember if Gruber spoke during that call.

Another clause calls for weekly meetings, either in person or by conference call, to review progress on contract work. Michael Costa, the tax expert who has taken the lead role in developing Shumlin’s financing plan, said Monday those meetings have mostly taken place by telephone. Gruber has not been to Vermont since before the contract was signed, according to Costa.

Despite the comments, Gruber will be expected to finish out the contract, which is already about 90 percent complete. Shumlin said he is “grateful” Gruber’s work will soon end, but the work is needed to ensure the single payer health care proposal will not harm the state’s economy.

“He is, in effect, the calculator of the options that we put forth to replace premiums with a system that is based on ability to pay. We gave him a series of options that we thought might work,” Shumlin said. “He is, in effect, our calculator. He does not do policy for us.”

“He is one of the very few people in America that has a calculator that will give us information that we can believe in,” he added.

Wright, in a statement about the GOP House members’ letter to Shumlin, said allowing Gruber to continue working will hurt Shumlin politically.

“Governor Shumlin won a razor-thin plurality on Election Day … signaling a lack of confidence from Vermonters on a whole host of issues. This crisis of confidence will certainly be magnified if Mr. Gruber continues in any capacity, and I believe will lead to further erosion of public support for the Governor and his policies,” Wright said.

Gruber’s analysis is critical to meeting statutory requirements, however, according to Shumlin.

“His comments are repugnant and unimaginably disappointing. I certainly wouldn’t consider him for future work, but we certainly need him to complete the work that we paid him to do,” Shumlin said. “I’m grateful that this project with him his wrapping up soon. I don’t like working with people that say things like that about the rest of us.”

Gruber, reached by email Monday, declined to comment.

“Thanks for the opportunity to respond but I have no comment at this point,” he wrote.

Official tally shows Shumlin wins plurality; Milne has today to challenge

Scott Milne

Scott Milne

MONTPELIER – An official tally shows Gov. Peter Shumlin received 2,434 more votes than Republican challenger Scott Milne during last week’s election.

Wednesday morning, the Canvassing Committee – consisting of representatives from the state Democrat, Liberty Union, progressive and Republican parties – met at the Sec. of State’s Office to sign off on official voter results, which confirmed the unofficial results that have been posted online for the past few days.

Shumlin received 89,509 votes, compared with 87,075 for Milne, which gave Shumlin a 1.3-percent edge over his closest competitor. Libertarian candidate Dan Feliciano finished third in a field of seven with 8,428 votes.

With such a narrow margin, Milne has the right to request a recount, and has until the end of the day to do so.

Neither candidate received more than 50 percent of votes overall – Shumlin received 46.4 percent to Milne’s 45.1 percent – which leaves the final decision in the hands of the Legislature in January.

State officials have “high” confidence in revamped health site

MONTPELIER — State officials have a “high level” of confidence that an improved Vermont Health Connect website will re-launch for the public Saturday in time for the open enrollment process.

Chief of Health Care Reform Lawrence Miller said security upgrades were completed about three weeks ago and the state is reconnected to the federal data hub. The state chose to disconnect from the hub in mid-September before the Centers for Medicaid and Medicare, the federal entity that oversees state exchanges, forced them to disconnect because of security concerns.

Miller said the state now meets all of CMS’s security requirements.

Lawrence Miller

Lawrence Miller

Online health insurance marketplaces, known as exchanges, are required by the federal Affordable Care Act. The state chose to build its own rather than join an exchange created by the federal government. Since launching in October 2013, however, Vermont’s site has lacked core functions and experienced technological problems.

Miller said Tuesday that the state’s contractor, Optum, which replaced original contractor CGI earlier this year, has made a series of improvements to the Vermont Health Connect site’s design and performance. Obsolete content has been removed. The state will “meet every expectation” it had when open enrollment begins on Nov. 15.

Gov. Peter Shumlin, speaking at an unrelated news conference Monday, said he is “cautiously optimistic” the site will perform as expected on Saturday.

“My team believes that when we light up the website it’s going to be able to do two things that we weren’t secure about before,” Shumlin said. “The first is obviously the security concerns have been worked out, and that’s a big deal. The second is that we believe the functionality is going to be much better.”

State officials, including Miller, chief of health care reform for Gov. Peter Shumlin, Harry Chen, acting secretary of the Agency of Human Services and Stephanie Beck, director of health care operations at AHS, are expected to brief reporters today on developments with VHC.

Those looking to renew their policies for 2015 will be able to see plan options online an download renewal forms. Those forms will be entered manually by staff, however, and not processed online. State officials announced that process over the summer.VHC

Existing customers were given the option of authorizing the state to check subsidy eligibility for a five year period when they first signed up for an exchange plan. Because there were no material changes to health connect insurance plans, aside from pricing, those who granted the state that authority will be “auto-mapped” into the 2015 version of their health plan and receive updated billing information.

Those that did not provide that authorization have been sent letters asking them to fill out a form and send it back allowing the state to check for subsidy qualification.

A portion of the website went live on Oct. 15 that outlines the 2015 health plans, rules and a subsidy calculator. The site also provides renewal forms that can be downloaded, filled out and returned by mail. Those seeking to renew plans can also contact the call center or visit a trained navigator.

The state is expecting between 3,000 and 8,000 people to enroll in exchange plans, offered either by Blue Cross Blue Shield of Vermont or MVP, for the first time. Those first-time applicants will be able to apply online.

The questions and options for new enrollees have been revised to reduce the occurrence of errors, Miller said, and are now more in line with how a navigator or call center staff would help fill out the forms.

“Those question sets have be updated, including reordered in some cases, and reworded so that it’s much more clear,” Miller said. “I think we will have a much lower error rate with those things.”

Other core functions, including the so-called change of circumstance, will remain offline until after the close of open enrollment on Feb. 15. Users who need to change personal information, such as their address or marital status, will continue to undergo a manual process rather than the faster, automated system the website was initially expected to offer.

Additionally, small business employees will still not be allowed to enroll through the website and must obtain insurance directly from carriers.

“It needs to be tested out, and that includes the carriers. I don’t see that testing being able to start, from a capacity standpoint, until Feb. 15,” the official said.

The transition from CGI to Optum required a stoppage of all development work, meaning further upgrades to the system, including automated change of circumstance and small business enrollment, will not be added until after the open enrollment period.

The state expects about 15 percent of those already enrolled in exchange plans to consider a new plan or some change to their benefits, which is the industry average each year. But because about 60 percent of those enrolled receive a subsidy, the state has prepared for up to 60 percent of enrollees seeking a change.

“It would be foolish for us not to provide for that,” Miller said.
About 220 Optum employees who are currently working on manual change of circumstance requests will shift Saturday to entering no-change renewals into the system, according to the Miller.

Employees from Maximus, the contractor operating the VHC call center, will also be available. And the state reached out to AHS and Department of Information and Innovation staff for voluntary overtime. The volunteer effort is different from the forced overtime the state implemented last year for some employees.

“Last year, you’ll recall, we did impose mandatory overtime,” Miller said. “That went over really, really badly. Canceling Christmas pisses people off, and it’s just not enough people,” Miller said.

Those that volunteer are being screened for their skill sets and directed accordingly. Some will work a few extra hours during the week, while others will work on weekends.

Optum’s current contract, known as a time and materials contract, is worth $29 million. It includes completing some work left behind by CGI when the firm and the state parted ways. It also includes the manual entry of data and some of the development work to get the site ready for open enrollment.

The contract will likely be amended and expanded after the open enrollment period to complete development work on the missing functions. Miller said it is unclear what the full amount of the contract will be.

CMS will provide an extension on developments for Vermont, as it has for Massachusetts and Maryland, Miller said.

Despite the “pretty high” level of confidence in the site, some risk remains, Miller said. The development and test environment for the site cannot completely mimic a live environment. And there could still be some “downstream risks associated with connectively with the federal data hub,” according to Miller.

The site was deployed internally, with public access still blocked, on Monday night. It is currently undergoing “a heavy security scan” and performance evaluation. Testing will continue Wednesday before the site is opened to customer service representatives on Thursday. On Saturday the public will have access.

neal.goswami@timesargus.com​

S&P revises outlook on state’s bond rating

MONTPELIER — Standard & Poor’s revised Vermont’s AA+ general obligation bond rating outlook Monday to stable, down from positive, based on the state’s economic outlook.

Robin Prunty, S&P’s lead credit analyst for Vermont, said the revision is due to the state’s slow pace of economic growth, despite above-average income levels and low unemployment.

“The outlook revision reflects Vermont’s slower-than-average economic recovery, which continues to pressure the budget, in our view,” Prunty said in a release.

A positive rating indicates expected economic growth over a two-year period, according to S&P, while a stable rating indicates little to no growth is expected in that timeframe.

StandardPoorsThe revision was made despite “strong financial and budget management policies that have contributed to consistent reserve and liquidity levels over time.” The S&P report outlining the revision also noted “significant pension and other post-employment benefits … which remain sizable relative to those of state peers despite some recent reform efforts.”

The report cites “weak” demographic trends in Vermont relative to the region and national trends. The estimated 2013 population in Vermont of 627,000 residents is just 0.1 percent more than the 2010 level, according to S&P.

Economic growth is lagging, according to the report.

“Vermont’s pace of economic recovery has been uneven and more recently, growth has lagged the U.S.; we expect this to continue,” the report states.

Vermont’s October revenues were $7 million, or 11 percent, off the mark. Democratic Gov. Peter Shumlin said his administration is considering further revisions to the state budget to balance the state’s budget based on the revenue stream.

“The October revenues were disappointing and we’re continuing to do well in the sales tax, rooms and meals tax, in fact they’re up. We had a lot of visitors come to Vermont not only last winter but throughout the leaf-peeping season,” Shumlin said at an unrelated news conference Monday.

But the state’s income tax continues to falter, he said.

“We continue to see poor performance in the income tax, and that’s really the concern. So, my job is not only to try to figure out what that trend means, try to figure out where it’s going and what’s driving it, but also to make any adjustments that might be necessary so that we balance the budget,” Shumlin said

The administration made a $31 million rescission to the budget in August, and another one will likely be needed, according to Shumlin. He said his administration is trying to determine if another rescission is needed before lawmakers tackle the annual mid-year budget adjustment early next year.

“I would be surprised if one is not necessary if the revenues continue to perform as they have for the last couple of months,” Shumlin said.

The report states that Vermont has “a very strong budget management framework,” and if that leads to higher reserve levels in the future, the rating could be revised upward. An improved position with pension and other post-employment benefits could also result in an upgrade.

Conversely, the report states that a worse reserve and benefits position could lead to further downgrades.

“Although we do not envision it at this time, given Vermont’s history of proactively managing its budget and recent actions to address post-employment liabilities, substantial deterioration of budget reserves or a deteriorating liability position could negatively pressure the current rating,” the report states.

UPDATE: The original headline and lede have been changed to reflect that the state’s bond rating has not been downgraded. Rather, the outlook on the state’s rating for general obligation bonds has been downgraded from positive to stable.

Read the report below:

Unofficial results give Shumlin plurality by 1.26 percent

The Vermont Secretary of State’s office posted unofficial results of Tuesday’s mid-term election Saturday morning showing that Democratic Gov. Peter Shumlin has won a plurality of votes over Republican challenger Scott Milne by a 2,434 vote margin.

The results show an increase of about 300 votes from the tally The Associated Press revealed earlier this week.

The results will not be official until early next week when they are certified by the state’s Canvassing Committee.

According to the Secretary of State’s results, Shumlin received 89,509 votes, while Milne received 87,075 votes. Libertarian Dan Feliciano received 8,428 votes.

Shumlin’s votes account for 46.36 percent of the votes. Milne’s tally represents 45.1 percent of the vote. Because no candidate received 50 percent of the vote, the newly elected Legislature must choose a governor when the new legislative biennium kicks off in January.

Milne is currently considering requesting a recount. He is entitled to a recount, if he wishes, under state law because the margin between the first and second place finishers is less than 2 percent.

Milne is also considering making his case to lawmakers that they should choose him as the next governor based on how their individual legislative districts voted. Milne has said he will announce his plans when the state’s election results are official.

Unofficial results posted Saturday by the Secretary of State's office

Unofficial results posted Saturday by the Secretary of State’s office

Milne not ready to concede

BURLINGTON — Republican gubernatorial candidate Scott Milne canceled a news conference he had planned for Wednesday morning as his race against incumbent Democratic Gov. Peter Shumlin remained tight.

Instead, Milne issued a statement around 10:00 a.m. saying he would wait for the final numbers to be reported before making any further comments.

“What is clear is that the majority of Vermonters do not agree with the path that we are on. We are going to wait for the final numbers,” Milne said. “I am incredibly grateful to all of the Vermonters who cast their ballots on my behalf yesterday. I owe it to my supporters and all Vermonters to see the totals before we make any further statements.”

Scott Milne

Scott Milne

Milne was at the Sheraton Hotel in Burlington Wednesday morning but did not come down to the lobby where the media had assembled for his expected news conference.

Shumlin, a two-term incumbent, maintained a narrow lead over Milne, a Pomfret businessman, throughout Tuesday night and in to Wednesday morning. Milne was trailing Shumlin by about 2,300 votes Wednesday morning with 273 of 275 precincts reporting, according to an Associated Press tally.

Shumlin has 89,687 votes to Milne’s 87,354 votes, according to the AP’s numbers.

Shumlin issued a statement around 11:40 a.m. saying it is “clear” he has the lead.

“We’ve taken a close look at the numbers. While I will await final counts and further statements from Scott Milne, it is clear we are ahead and I’m confident that I’ve received the most votes. Serving as governor has been the greatest privilege of my life and I will be proud to continue leading this great state. I understand how close this election was and I want Vermonters to know that I will be working hard for each and every one of them,” he said.

What looks to be an extremely narrow margin of victory for Shumlin likely scuttles the governor’s dream of implementing a single payer health care system in Vermont, and likely damage any future political ambitions he holds.

Shumlin was unable to pull away to a comfortable margin even with a large boost in Burlington, where Shumlin beat Milne by about 4,000 votes. Voters were clearly discontent with Shumlin, who received far less support than other Democrats running statewide.

Milne, whose campaign spending — $211,000 to Shumlin’s nearly $900,000 — paled in comparison to the governor, entered the race for governor late and was expected to be easily defeated by the governor. But he appeared to be benefiting from discontent with Shumlin and a strong GOP wave that was sweeping across the country.

Gov. Peter Shumlin

Gov. Peter Shumlin

An October poll showed Shumlin’s approval rating nearly underwater with 45 percent approving of his performance as governor and 41 percent disapproving. Shumlin has faced more than a year of bad press as Vermont Health Connect, the state’s online insurance marketplace mandated under the federal Affordable Care Act, continued to struggle and lack core functions.

And a land deal Shumlin made last year with a neighbor with intellectual disabilities appeared to still be resonating with some voters.

Shumlin, throughout the campaign, continued to tout his proposal for a single payer health care plan for the state that he hopes to launch in 2017. He has promised to deliver a financing plan to lawmakers and the public in January, two years after Act 48, the law laying the foundation for his plan, called for it to be revealed.

Voters, however, seemed to be more interested in hearing about property tax relief and plans to reform how the state funds its K-12 public education system.

Libertarian Dan Feliciano, who was embraced by some conservatives who were dissatisfied with Milne, had received 7,989 votes, or about 4.35 percent. Some Republicans had urged Feliciano to drop out of the race to boost Milne’s chances of victory. Feliciano could be seen as spoiling a major upset if Milne cannot close the gap with Shumlin.

Election Day live updates

Barre
3:35 p.m.
With less than four hours before polls close, Republican gubernatorial candidate Scott Milne is making a final push for Washington County voters, but he had to leave his biggest sign behind.

Milne and supporters held signs and waved to motorists in downtown Barre near the “Youth Triumphant” statue, but the campaign’s largest sign remained in the back of a pickup parked on the street nearby.

The sign – measuring approximately 4 feet 6 feet – had been out on the triangle of grass that marks the end of North Main Street until a city official came by and told him he had to remove it, Milne said.

Milne campaigns in Barre Tuesday afternoon. (Josh O'Gorman/staff photo)

Milne campaigns in Barre Tuesday afternoon. (Josh O’Gorman/staff photo)

Milne said the official told him he was allowed to display hand-held signs only. Mayor Thomas Lauzon – who endorsed Gov. Peter Shumlin in October – did not immediately respond to a request for comment.

Milne spent Tuesday morning campaigning in Windsor County before coming to the capital area.

“I think the higher the turnout in Washington County, the better it will be for me,” Milne said.
-Josh O’Gorman

Photos by Stefan Hard

Montpelier
3:15 p.m.
Things were running smoothly about lunchtime at the polling place at Montpelier’s City Hall, where City Clerk John Odum said compared to two years ago, a presidential election, when voters were lined up on the stairs all the way through to the back of City Hall, it was orderly and well-paced.

Two years ago, for the Presidential election, the lines were down the stairs, and snaked through the back of City Hall — and a voting machine malfunctioned, complicating things, recalled Odum.

With less traffic coming through, and no mechanical issues to report this year, Odum said things were going extremely smoothly.

There were many early votes cast, said Odum, who said turnout through the morning hours had been “steady, not enormous.”

Montpelier’s City Hall was a busy place – with many candidates campaigning out front of City Hall, candidate signs everywhere around City Hall, even the back door, and many parking meters blocked off, and reserved for voting only.
-Amy Nixon

East Montpelier
2:45 p.m.
Voting was busier on Election Day morning than Town Clerk Terri Conti expected, she said.

“It’s actually busier than I thought it was going to be, it’s been steady and consistent,” she said.

By mid-morning, just a few hours in, about 25 percent of the town’s about 2,000 registered voters had come through the polling place. With people checking in, many busy behind curtains filling out their ballots, and several on their way to drop their ballots in the box, the official polling place was bustling.

Stopping into East Montpelier Elementary School to vote on Tuesday was, for many town residents, the first time they had seen the inside of the recently completed $8 million renovation to the school.

That taxes are due in two weeks, a chance to actually stop into the brightly-patterned school and see the top-to-bottom renovation, even from a quick look coming in the side door to the polling place, gave voters a feel for the renovation project their tax dollars underwrote, noted Conti. She said people were making comments about how nice the school turned out.

“People are very impressed with the new school,” said Conti, noting the due date for taxes is creeping up this month. “It makes it an easier pill to swallow,” she said of the increase in people’s taxes to cover the school renovation bond.

Election Day, Conti said, “Is my favorite day; you get to see everybody,” she said, getting up to hug someone. “I love my job.”
-Amy Nixon

Montpelier
2:15 p.m.
Regardless of the outcome of the election, Ivan Shadis, the youngest of the candidates from Montpelier hoping to land a state representative seat for Washington County 4, said the day for him was “spectacular.”

“It’s a day I’ve really been looking forward to for a long time,” said Shadis, 26, wearing a winter cap and warm flannel shirt, standing with a handmade sign bearing his name in front of Montpelier City Hall.

“It’s particularly rewarding to see my supporters,” smiled Shadis, a city native who ran as a Progressive, challenging incumbents Mary Hooper and Warren Kitzmiller, both also at City Hall mid-day Tuesday.

The back entrance to Montpelier City Hall on Tuesday. (Amy Nixon/staff photo)

The back entrance to Montpelier City Hall on Tuesday. (Amy Nixon/staff photo)

Several of Shadis’s supporters, including some family members at City Hall pulling for him, made him feel valued for the issues he brought to the forefront as a young candidate. Shadis raised issues about housing costs being too high, obstacles in finding decent-paying work, and called for a progressive tax to help improve the picture for those struggling to make ends meet in Vermont.

Of feeling his message was heard, Shadis said, “That itself has made this day spectacular.”

Shadis said he knows a number of people who were “reticent about politics,” at the start of the campaign, who have become impassioned and involved since and that means a lot to him.

“It’s a bit of political culture that I can feel proud to have put some work into,” Shadis said with a smile. He said he plans to stay involved — and be back. “This is our town,” he said of the need for younger voters to be heard.
-Amy Nixon

Barre
1:10 p.m.
Why not me?

One Barre voter, disappointed by the Republican Party’s failure to field a candidate for Secretary of State this year, apparently asked himself that question while filling out his ballot today.

“I wrote myself in,” he said before strolling out of the Barre Municipal Auditorium.
-David Delcore

Barre
1 p.m.
There were a couple of morning lulls, but voting was otherwise steady at the Barre Municipal Auditorium this morning.

At noon 1,097 of the Granite City’s 4,950 voters had cast ballots – a figure that included more than 400 of the 477 early and absentee ballots that were in hand when the polls opened five hours earlier.

With five hours to go and most of the absentee ballots already accounted for, the pace of voting will have to pick up considerably to match the turnout in the last mid-term elections. In 2010 a total of 2,772 Barre voters participated in the November election.
-David Delcore

Barre Town
11:52 a.m.
Finding parking was occasionally challenging for voters and a mid-morning power problem briefly disabled one of the vote tabulating machines, but today’s election otherwise got off to a smooth start in Barre Town.

By 11 a.m. 776 of the town’s 5,492 registered voters had made the trip to Barre Town Elementary and Middle School where school was in session and the parking lot was filled to capacity.

According to Town Clerk Donna Kelty the 776 voters who cast ballots in the first four hours after the polls opened in the school gymnasium did not include 677 early and absentee ballots that had been requested from her office in the weeks leading up to the election. Kelty said two “super huge boxes” of those ballots were being processed.

Kelty said a “power failure” that briefly idled a vote tabulating machine around 9 a.m. Was quickly resolved.
-David Delcore

Barre
9:30 a.m.
Nearly 450 Granite City voters didn’t wait until today to cast their ballots.

When the polls opened at the Barre Municipal Auditorium at 7 a.m. City Clerk Carol Dawes had roughly 400 voted ballots in hand and was waiting for about 50 more to be returned.

Dawes said 447 of the city’s 4,950 registered voters either voted early or requested absentee ballots.vote-button

Still, Dawes described today’s early turnout as “medium-steady.”

In the first 30 minutes 192 voters cast ballots and by 9 a.m. that number had swelled to roughly 275, not counting the absentee ballots that were being fed into the voting machine by poll workers.

-David Delcore

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Natural gas pipeline protesters arrested

MONTPELIER – Police arrested 64 people protesting the proposed natural gas pipeline Monday night after some refused to leave the office of Gov. Peter Shumlin.

Several hundred people gathered on the Statehouse lawn Monday afternoon to protest the expansion of Vermont Gas’ pipeline into Addison County, and while some stayed outside, others entered the nearby Pavilion Building, which houses Shumlin’s office.

According to a statement from state police, protesters “proceeded upstairs without authorization and occupied the lobby of the Governor’s office on the fifth floor. Other protestors remained on the first floor of the building, near the elevators.”

According to reports, the protesters wanted Shumlin to withdraw his support for the next stage of the gas pipeline, which will extend into Addison County, beneath Lake Champlain and to the International Paper plant in Fort Ticonderoga, N.Y.

While the Pavilion is open until 5 p.m., police gave protesters until 6:30 p.m. To vacate the building. At 7 p.m., police began escorting protestors outside, where they received a citation for misdemeanor unlawful trespass, which carries a maximum penalty of three months in prison and a $500 fine.

According to police, the arrests occurred “without incident.”

In a statement, Shumlin addressed the incident.

“Peaceful protest is a right deeply embedded in our democracy. I support the right of all sides to be heard, and appreciate the protester’s decision to act respectfully with state staff and law enforcement tonight,” Shumlin said. “While I agree that climate change is one of the biggest challenges facing our state, nation, and world, I disagree with the protester’s position on the natural gas pipeline, which I believe will help hasten our state’s transition away from dirtier fuel oil and help our economy.”

josh.ogorman@rutlandherald.com

Milne makes “The Daily Show”

GOP gubernatorial candidate Scott Milne made his debut on “The Daily Show” Wednesday night in host Jon Stewart’s closing “Moment of Zen” clip. It features Milne incorrectly stating where he was born as he introduced himself at a recent debate sponsored by Vermont PBS.