Category Archives: Appropriations

Video: Vermont this Week on Vermont PBS

Vermont Press Bureau chief Neal P. Goswami joined the panel Friday on Vermont This Week. Watch for an update on potential budget cuts, an education reform bill, a showdown between Gov. Peter Shumlin and the latest on MIT economist Jonathan Gruber’s woes.

Capitol Beat 2-27-15 with Pro Tem John Campbell

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Senate President Pro Tem John Campbell sits down with Vermont Press Bureau Chief Neal P. Goswami to discuss the legislative session, the state budget and guns.

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Senate President Pro Tem John Campbell records Capitol Beat

List of $29 million in potential budget cuts revealed

MONTPELIER — A list of potential budget cuts totaling about $29 million was revealed Thursday by the Shumlin administration and key lawmakers that may be used to help close a budget gap in the 2016 fiscal year that has grown larger during this legislative session.

The list of cuts, characterized by Finance Commissioner Jim Reardon as a list of “brainstorming ideas,” includes far-fetched ideas such as reducing the 150-member House to 120 members. It also includes painful reductions to the state’s online health insurance marketplace and premium subsidies that many Vermonters rely on.

Rep. Mitzi Johnson

Rep. Mitzi Johnson

The list, revealed at a House Appropriations Committee meeting Thursday afternoon, prompted Chairwoman Rep. Mitzi Johnson, D-South Hero, to note that lawmakers and the administration would need to take a “good, hard look at a lot of our loyalties and core values.”

“I just want to acknowledge how incredibly difficult this is,” she said.

The list, which also includes the possibility of closing the Vermont Veterans Home in Bennington, was compiled by administration officials including Reardon and Secretary of Administration Justin Johnson, as well as Johnson, Senate Appropriations Committee Chairwoman Jane Kitchel, D-Caledonia, and analysts with the Joint Fiscal Office.

Rep. Mitzi Johnson, D-South Hero, left, listens as Secretary of Administration Justin Johnson, right, speaks at a committee hearing Thursday.

Rep. Mitzi Johnson, D-South Hero, left, listens as Secretary of Administration Justin Johnson, right, speaks at a committee hearing Thursday.

The legislative session kicked off early last month, when the projected budget gap in the 2016 fiscal year budget was $94 million. But a revenue downgrade just weeks later made it balloon to at least $112 million. It could grow even more if lawmakers do not sign off on Gov. Peter Shumlin’s proposed 0.7 payroll tax on Vermont businesses, which would funnel some of the revenue generated to cover the $16 million needed to pay for the expansion of Medicaid under the Affordable Care Act.

A full story will appear in Friday’s editions of the Rutland Herald and Barre-Montpelier Times Argus.

See the full list of potential budget cuts below:

Major changes to Vets Home on table to help balance budget

MONTPELIER — Major changes to the Vermont Veterans Home are once again being considered as the state looks to address a large budget gap in the 2016 fiscal year state budget.

Shumlin administration officials say privatizing the state-run facility in Bennington, or even possibly closing it, are on the table with many other ideas to trim state spending. But those ideas are only concepts at the moment and not serious proposals.

The 2016 fiscal year budget gap has ballooned from $94 million in early January to at least $112 million following a revenue downgrade late last month. The Veterans Home relies on several million dollars from the state’s general fund to operate.

The Vermont Veterans Home in Bennington.

The Vermont Veterans Home in Bennington.

Shumlin administration officials and legislative leaders both acknowledge that making changes to the Veterans Home has not advanced to a point where budget writers have explored what kind of savings could be achieved by privatizing or closing the home. However, those ideas that were once ruled out last year by former Secretary of Administration Jeb Spaulding are back.

Current Secretary of Administration Justin Johnson said this week that the administration and lawmakers are considering a range of ideas.

“In a sense, everything is on the table,” Johnson said. “The first thing for me is, does it get you any closer to the goal? I’m actually not sure that it does.”

Justin Johnson

Justin Johnson

“I’d say it’s no more or less on the table than any other idea that I don’t know if it gets you what you need,” he added.

Johnson cautioned that making any major changes to the way the Veterans Home is run remains a remote possibility.

“I don’t know enough to rule anything in or out. We still have this challenge of meeting the budget,” he said. “I would want to see the numbers. I would want to see the impact. I haven’t looked at any of those things. It’s not an idea that I’ve spent any time on.”

Gov. Peter Shumlin, in an interview with the Vermont Press Bureau, also did not rule out the possibility of major changes to the home.

“I would say that our record shows that we don’t want to close the Veterans Home. We’ve been supportive of the Veterans Home. We want to keep the Veterans Home going. They deserve us. I do think that everything in state government has to be more efficient in order to balance this budget,” the governor said.

Shumlin said his administration has included funding for the home in the budgets that he has presented to lawmakers. But the state will need to find ways to reduce the impact of the home on the general fund.

“I have a record. My record as governor has been that despite the fact that the Veterans Home continues to need more and more money from the general fund, millions of dollars every year, we have supported the Veterans Home throughout my administration. We have done that throughout my administration and we have not supported privatization. We have done that because our veterans deserve that kind of treatment from us,” he said. “Having said that, we have also supported any plan … to try to figure out ways to ensure that we’re not constantly always losing money on the Veterans Home because the state can’t afford to do this forever.”

Sen. Dick Sears, D-Bennington, said he will oppose any effort to privatize or close the Veterans Home. He said the jobs it provides are important to the region.

Sen. Dick Sears

Sen. Dick Sears

“My job, amongst other things, is to represent Bennington County and Wilmington and one of those ways is keeping excellent state employee jobs in Bennington County,” Sears said. “I’ll do everything I can to prevent the privatization of the Veterans Home.”

Plasan North America, a Bennington-based defense contractor, announced last week that it will close its Vermont facility and move it to Michigan. Sears said the area cannot absorb the loss of jobs at the Veterans Home, too.

“Given what happened … with the announcement of Plasan, I think putting on top of that losing those good jobs would be a critical damage to Bennington’s economy and to the economy of the region,” he said.

Johnson said the administration is exploring options to bring veterans from Massachusetts, were there is a waiting list for space at state-run homes, to Vermont. Massachusetts has resisted in the past, however.

The administration is not yet exploring how much money could be saved by privatizing or closing the home. It is not yet clear if they will be among the ideas that are further explored to determine savings, according to Johnson.

“What I expect to happen, after we have more conversations with the Legislature around options and concepts and ideas, is that the next step would be to start running numbers. I don’t want to just start running numbers on everything that anyone dreams up because we’ll have people have work on all this stuff that perhaps goes nowhere,” he said. “If we’re able to narrow down where we’re going to go then we can do some number crunching.”

neal.goswami@timesargus.com

Capitol Beat with the Governor 2-20-15

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Gov. Peter Shumlin and Vermont Press Bureau chief Neal P. Goswami discuss his effort to obtain an “all-payer waiver,” efforts to find savings in labor cuts and the Vermont Veterans Home.

Nixing raises and mileage reimbursements considered to trim labor costs

MONTPELIER — The Shumlin administration is considering a range of options to present to the Vermont State Employees Association as part of its effort to secure $10 million in labor savings, including eliminating scheduled pay raises.

With a gap of at least $112 million in the 2016 fiscal year budget, the Shumlin administration — and legislative leaders — insist that at least $10 million in labor costs must be trimmed as part of the effort to balance the budget. Administration officials say they hope to obtain the savings without having to take money away from workers that is already in their paychecks.

But, doing so would require the union to agree to renegotiated its existing labor contract.

Eliminating the 2.5 percent cost of living increase that is scheduled for the 2016 fiscal year would achieve about half of the $10 million the administration is seeking. That option is preferable to the administration because it would not require workers to give up pay they are already receiving.

Additional measures would still be needed, though.

The administration is also considering reducing the mileage reimbursement for state workers by more than 50 percent, down to 23.5 cents per mile. That would provide about $1 million in savings for the general fund, according to the administration. It would only impact those employees that use their personal vehicles rather than the state’s fleet.

Restructuring so-called “step increases” could also help reduce labor costs. State workers are grouped into various pay grades, with each grade containing 15 steps. The first five step increases occur every year. The next several step increases occur every two years, and the last group of step increases occur every three years. They average out to a 1.7 percent salary increase annually.

If the step increases are adjusted the state could achieve significant savings that would be ongoing in future years, according to the administration. Details of how the steps would be adjusted are not yet known.

Implementing five furlough days for state employees, which is also being considered, could achieve a 2.5 percent reduction in total salaries paid out by the state. That idea is less desirable, however, because it would be cutting pay that workers are already receiving.

Secretary of Administration Justin Johnson said last week that if the union does not work with the administration to achieve the $10 million in labor savings it is seeking more than 400 state workers could be laid off.

Vermont State Employees Association Executive Director Steve Howard and Johnson said Thursday they are working to set a meeting to begin discussions. The union is not interested in any discussion about opening the existing labor contract, however, according to Howard.

Steve Howard

Steve Howard

“We’re happy to hear what they have to say. We’re willing to hear what they have to say. We have some ideas on how they can raise revenue from the folks who have had all the income growth,” he said.

Howard said union officials will announce next week several ideas about where revenue could be raised.

“I think our position remains that before you take money out of the paychecks of state employees who are regular working class Vermonters who are struggling to pay their bills, the administration needs to work on raising revenue from Vermonters who have had all the income growth in the last decade,” he said. “For some reason they are putting all their energy into how we can take money out of the pockets of people who are serving the public and protecting with all their strength the wealthiest people in the state.”

Gov. Peter Shumlin, speaking at an unrelated news conference Thursday, again ruled out tax increases as a way to forego the labor savings it is seeking. House Speaker Shap Smith and Senate President Pro Tem John Campbell have also said the labor savings must be a part of the effort to close the budget gap.

Shumlin said the state must lower the growth rate in state spending, which has been about 5 percent, to the growth in revenue, which has been about 3 percent.

Gov. Peter Shumlin speaks to reporters during a  recent news conference.

Gov. Peter Shumlin speaks to reporters during a recent news conference.

“I would caution us from thinking that we can turn to Vermonters when they’re struggling to pay their bills, when they’re frustrated that their incomes aren’t going up despite the recovery. I would caution us from believing that we can tax our way out of this problem,” Shumlin said. “Revenue will not solve our problems. We’ve got to make the tough choices … of actually matching our appetite for spending with the money that’s coming through the door.”

Howard said the union will continue to resist efforts to seek the cuts from state workers.

“The administration has set up a false choice. They have said, ‘Look, state employees, you can cut off your left hand or you can cut off your right hand. That’s not the right way. That’s not the right choice,” Howard said.

neal.goswami@timesargus.com

VSEA pushes back on cuts, Shumlin unfazed

MONTPELIER — Members of the Vermont State Employees Association took to the State House Tuesday to make a direct pitch to lawmakers and the governor to abandon proposed cuts and embrace new revenue instead as they work to balance the state budget.

More than 100 state workers gathered for the union’s State House Day, hoping to ward off budget cuts proposed by Gov. Peter Shumlin to various services, including emergency dispatching and educating inmates.

The governor has proposed consolidating dispatch centers in Rutland and Derby with existing ones in Rockingham and Williston. The move, the Shumlin administration argues, will save the state $1.7 million and not impact public safety. The union counters that it will cost dozens of jobs and have a major impact on public safety.

Shumlin, a Democrat, met with some state workers for a casual conversation in the State House cafeteria. They used the opportunity to share their concerns with the governor about his proposed cuts.

“There’s an obvious public safety issue if you’re expecting less people to do more work,” said Melissa Sharkis a dispatcher at the Rutland facility that could close.

Dispatchers in Williston and Rockingham will not have the knowledge of local neighborhoods or rural locations, Sharkis said.

“The more time we have to spend looking up locations if we don’t know the area, that’s longer that it takes to get people help,” she said.

Gov. Peter Shumlin met with state workers at the State House Tuesday and heard their concerns with his proposed budget cuts.

Gov. Peter Shumlin met with state workers at the State House Tuesday and heard their concerns with his proposed budget cuts.

Thomas Lague, another dispatcher, said reducing dispatch jobs will have a negative impact on communities.

“We know there’s a budget and we know that we need to trim corners, but if we want to grow the economy, cutting the service sector doesn’t appear to be the best route to do it,” he said.

Meanwhile, Bill Storz, who works in the Community High School program, told Shumlin that cutting the program, which provides education to inmates, is a mistake. It’s facing a proposed 50 percent cut in funding.

“I want to make first clear that the budget cut is based on declining need, or perceived declining need. We feel that there really is no declining need,” he said.

But Shumlin did not seem to be moved by what he heard. Just a few moments later he told reporters that the cuts are necessary to help balance the state budget, which faces a budget gap of at least $112 million in the 2016 fiscal year.

“It’s my responsibility as governor to balance the budget in a responsible way. We came up with over $15 million of ongoing efficiencies just in the way state government can deliver services to be more efficient and meet the challenges that we’re facing of over a $100 million budget gap,” he said.

Shumlin said people “can always make an argument for not making change.” But, he said taxpayers are expecting that he and lawmakers will find a way reasonable way to find savings.

“Taxpayers expect me to make the choices that are necessary to responsibly balance this budget, and that’s exactly what we’re doing” he said.

Shumlin said his public safety team has reviewed the plans to consolidate dispatch centers. It can be done without harming public safety efforts around the state, he said.

“We firmly believe that we can make that system more efficient with technology that’s advanced since the system we created a long time ago, and deliver better services,” Shumlin said.

Shumlin said his administration wants to continue to provide education opportunities to inmates, but the program is not currently providing that service in an efficient way.

“We’re not saying let’s not educate young people in prisons, what we’re saying is we’ve got 49 teachers that graduated 41 students this year. I don’t think there’s a Vermonter who would say, ‘Wow, that’s an efficient way to deliver education — 49 teachers, 41 graduates,” Shumlin said. “All we’re saying is let’s find the areas where government isn’t being efficient and not always turn to taxpayers.”

Shumlin has told lawmakers and others that if they don’t like his proposals they must present their own that provide equal savings. So far, those ideas have not been forthcoming, according to Shumlin.

“We’re always interested in any alternative plans. What is not OK is to say, ‘Just go out and raise taxes on Vermonters,’ and that’s what I’m hearing in the background here. What they’re saying is, ‘Listen, don’t change anything. Don’t make government more efficient, just ask taxpayers to pay more.’ As governor, I’m not going to do that,” Shumlin said.

Later in the day VSEA members met in the House Chamber to discuss the impact the cuts will have. Leslie Matthews, an environmental scientist with the Agency of Natural Resources said Shumlin is “extracting millions of dollars” from state workers.

“We’re here to say, no more cuts, raise some revenue,” she said.

The cuts to state services are on top of $10 million in labor savings that Shumlin hopes to achieve be renegotiating the labor contract with state workers. Workers are slated to receive a 2.5 percent cost of living increase and a resumption of “step increases” that would provide an average salary bump of 1.7 percent to workers.

The budget gap should be addressed by seeking additional revenue, Matthews said, not by asking state workers to forego pay raises that are in the labor contract or cutting funding for the departments and agencies they work for.

“That crisis does not constitute an emergency on our part, or obligate us to open up our contract that we bargained in good faith,” she said.

She asked lawmakers to “raise revenue from the people who can afford it.”

“We need to grow it from those people who have seen their income grow dramatically in recent years,” Matthews said. “We call on our legislators to reject the governor’s proposed cuts and instead raise revenue.”

Shumlin maintains that he and legislative leaders are committed to achieving the $10 million in labor savings.

“The best way to do that would be if the union would come to the table and work cooperatively with us to find those savings. We have to do it. There’s no choice. If you talk to legislative leadership, if you talk to me as governor, they’ll tell you, we cannot solve this budget challenge without getting some savings from our workforce. It’s just not possible,” he said.

The Shumlin administration has asked union officials to sit down and discuss the best way to achieve the savings. If the union does agree to make some concessions, more than 400 state workers could be laid off, administration officials said last week.

“There’s many ways to do this and that’s why it’s so important they come to the table. We can do this the hard way, which won’t be the best for them and the best for taxpayers, or we can do this by doing what we do in Vermont,” Shumlin said.

So far, neither Shumlin nor his aides have provided any specific proposal to reduce labor costs. Those details should be be worked out with the union, they said.

neal.goswami@timesargus.com

Labor costs, guns and organs: Capitol Beat, Feb. 16, 2015

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Vermont Press Bureau chief Neal Goswami and VPB reporter Josh O’Gorman chat about the showdown between the Shumlin administration and the Vermont State Employee’s Association over labor costs, the state of gun legislation in the State House and a bill that would make organ donation the default option in Vermont. Also, Barre-Montpelier Times Argus Editor Steve Pappas talks about a few stories he’s worked on in the past couple of weeks, including a profile of Rep. Janet Ancel and Sen. Tim Ashe, the lawmakers that chair the taxing committees in the State House. He also updates on a potential second bid for governor by Republican Scott Milne. Lots going on in this episode — have a listen.

Check out recent episodes of City Room with Steve Pappas, which are discussed in today’s podcast episode:

Scott Milne episode

Paul Costello and Ted Brady episode

Capitol Beat with Peter Shumlin, Feb. 13, 2015

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Gov. Peter Shumlin stands behind his payroll tax proposal and expresses hope that state workers will negotiate with his administration to find $10 million in labor savings in the weekly podcast with Vermont Press Bureau chief Neal Goswami.

Gov. Peter Shumlin inside his ceremonial office on Friday, Feb. 13.

Gov. Peter Shumlin inside his ceremonial office on Friday, Feb. 13.

Vermont House approves $2.8 million in fee increases

MONTPELIER, Vt. (AP) — Licenses to operate a restaurant or lodging or teach in Vermont’s schools all appear likely to get more expensive.

Fees for them and a host of other state services are due to go up under a bill endorsed by the Vermont House on Thursday.

Among the biggest percentage jumps would be for a license to operate a small bed-and-breakfast, with a capacity of up to 10. That license would increase from $80 to $150 — a jump of about 88 percent.

In total, the bill would raise about $2.8 million in new revenue for the state.

It’s won preliminary approval on an 88-57 roll call vote and is up for final House action on Friday before heading to the Senate.

Administration may cut up to 400 state jobs, official says

MONTPELIER — The Shumlin administration may look to lay off as many as 400 state employees if it cannot extract concessions from the Vermont State Employees Association that helps reduce the budget by more than $10 million.

Administration officials are seeking $5 million in generic personnel savings, and another $5 million or so in savings from the Pay Act, which includes state employees’ contractual raises, in the 2016 fiscal year budget.

Both the administration and the union are posturing before any formal negotiations take place. Secretary of Administration Justin Johnson issued a memo this week to agency and department heads declaring that all new hires must be cleared through his office. And the VSEA is distributing a petition that calls for no cuts to state government. It was the memo, Johnson said, that prompted his memo to slow hiring because lay offs are likely.

Justin Johnson

Justin Johnson

The union is under no obligation to revisit the current labor agreement that provided state employees with 4 percent raises in next year’s budget. But unless the union makes some concessions, a massive reduction in force will be needed, Johnson said Thursday.

“Worst case, you’re looking at probably 400, and perhaps, even a little more,” he said. “Obviously, until we’ve finished putting the final budget together, it’s difficult to determine what the mix between revenue and cuts will be.”

According to Johnson, the average compensation package for a state employee totals $85,000 — including salary and benefits. But the general fund only contributes about 40 percent of the cost, he said, which means a higher number of lay offs are needed to meet the financial targets.

The administration is preparing for a range of potential lay offs, depending on how much savings can be agreed on.

“There’s not a set number, certainly, in my mind. But it could, depending on what plays out, whether we get any concessions, be between 100 and 400,” Johnson said.

The Legislature’s Joint Fiscal Office has projected a need to cut between 100 and 200 positions if negotiations between the union and the administration do not achieve any savings.

Union officials, meanwhile, say they are not interested in opening the existing contract.

“I think those numbers are, first of all, very disturbing. It’s disturbing for the people who will lose their jobs. It’s bad news for Vermonters who will have a hard time getting the services they need from state government. It’s also counter productive,” VSEA Executive Director Steve Howard said.

Union President Shelley Martin said state workers have already given enough in recent years. More than 600 workers were laid off during the administration of former Republican Gov. James Douglas. And employees have not received a raise in the past two years, she said, and all “step” increases that come with pay raises were on hold.

Shelley Martin

Shelley Martin

The labor contract calls for a 2.5 percent increase in the 2016 fiscal year, and a resumption of step increases.

“Our contract looks good because it says we get a 2.5 [percent] increase … but the actual picture is we never got a raise for two years,” Martin said.

Howard said members have indicated they are not interested in reopening the contract. Instead, the administration should look to raise additional revenue from those who can afford to contribute, he said.

“It’s hard for us to say to our members that we’re going to entertain taking money out of your paycheck while you’re already struggling … when we’ve got a political establishment that seems hell bent on protecting the wealthiest Vermonters. The governor needs to be a leader. The governor has leadership abilities,” he said.

Martin said the union is willing to “negotiate,” but “we don’t even want to talk about jobs.” Rather, the union can help find alternative sources of revenue, she said.

“We can come up with revenue ideas,” Martin said. “We do want to be at the table. We do want to be a part of the process.”

Johnson said he has extended an invitation to union officials to discuss how to collectively find savings.

“I expect they will sit down and talk with us. I don’t think they would not accept that. I just haven’t heard yet that they have,” he said. “I’m not sure what happens when we sit down.”

Exactly how many lay offs might be needed won’t be known until the budget is finalized, which won’t occur until the final day of the session. That’s typically when the governor, speaker of the House and Senate president pro tem huddle together to hash out the final details.

“The ultimate answer is probably not going to be known until we pass the budget at the very end,” Johnson said. “Obviously, I have to start thinking about it and we all have to start thinking about, but we are not making any decisions.”

A full story will appear in Friday’s editions of the Barre-Montpelier Times Argus and the Rutland Herald.

Video: Vermont This Week on Vermont PBS

Bureau chief Neal Goswami joins Alicia Freese of Seven Days, Taylor Dobbs of Vermont Public Radio and moderator Stewart Ledbetter on this week’s show.

Senator’s letter to resorts rankles ski industry, fellow lawmakers

MONTPELIER — A state senator has sent a letter to each of the seven ski resorts utilizing state land asking them to renegotiate leases, but the closing paragraph he included has some lawmakers concerned he has issued a thinly-veiled threat to raise their taxes if they do not agree.

Chittenden County Sen. Tim Ashe, a Democrat and the chairman of the powerful Senate Finance Committee, sent the letters on Senate letterhead last week to Bromley, Okemo, Killington, Stowe, Smuggler’s Notch, Burke and Jay Peak. He signed each letter as chairman of Senate Finance.

Ashe’s letters follow the release of a report by State Auditor Doug Hoffer last month that found the resorts’ lease payments to the state have not kept pace with the resorts’ economic growth.

Sen. Tim Ashe

Sen. Tim Ashe

The long-term leases with the resorts range between 50 and 100 years. Bromley was the first resort to strike a deal with the state in 1942.

Over the last 50 years, resorts that once had just a handful of lifts and few facilities have become year-round enterprises. Many are now owned by large out-of-state corporations, according to Hoffer’s report. The resorts now feature new lodges, hotels, condominiums, retail stores, golf courses, waterparks and other amenities that generate significantly more revenue than the fledgling days of Vermont’s ski industry.

Between 2003 and 2013, development at the seven resorts led to increases in sales of goods and services, property values and revenues from excise taxes, all of contributed to more state revenue.

But lease payments for the 8,500 acres of public lands used by resorts have not kept the same pace of growth this decade as other tax revenues generated from the resorts. The leases were designed to capture a percentage of lift tickets, typically 5 percent of lift ticket sales. Lift ticket sales became a secondary source of revenue as the resorts evolved, however, according to the report, and the leases only generate about $3 million a year for the state.

Ashe’s letters ask the resorts to willingly open negotiations, even though most do not expire for several more decades. Bromley’s lease, for example, expires in 2032. Ashe pointed out in his letter, as Hoffer’s report did, that renegotiating makes sense because “the ski world of the lease’s origins would be unrecognizable today.”

“It is for that reason I ask you to renegotiate voluntarily your lease terms or agree to amend your lease to have it expire on December 31, 2016. Either of these options would allow for thoughtful, unhurried negotiations between the State and you to arrive at modern lease terms reflecting the great changes in the ski industry and in the revenue streams it features,” Ashe wrote.

It is the closing paragraph that has drawn the ire of some fellow lawmakers, however.

“From time to time, the Legislature considers various proposals that would have an impact on various classes of taxpayers. In terms of the ski industry, I have heard Legislators propose eliminating the property tax exemption on snowmaking equipment and other assets, and suggest creating a special non-homestead tax rate for ski areas. It seems to me that voluntary renegotiation of your lease with the State is a far superior method of striking the right balance of proceeds for the right to use public land,” Ashe wrote.

Rep. Patti Komline, R-Dorset, whose district includes Bromley Mountain, said Ashe’s letter is a clear threat to try to eliminate tax exemptions currently enjoyed by ski resorts if they refuse to scrap their current leases.

“It is very concerning when those in power look to interfere in contractual agreements using overt threats. This is an overreach and I hope it doesn’t create a precedent that will affect the credibility of our state’s reputation,” she said.

Komline said she learned about the letters Wednesday and planned to reach out to officials at Bromley and work with the Vermont Ski Areas Association to help ease any concerns the resorts have.

Rep. Heidi Scheuermann

Rep. Heidi Scheuermann

Rep. Heidi Scheuermann, R-Stowe, said she, too, found out about the letters on Wednesday after officials at Stowe Mountain Resort sent her a copy. Stowe’s lease is good until 2057, Scheuermann said.

“I think it’s inappropriate. That said, he can do it. I’m sure Stowe will have a response for him. They have a legal lease that is extremely beneficial to the state of Vermont and I expect they are going to maintain that lease,” she said.

Ashe said Wednesday his letters are not a threat and should not be seen as one.

“It’s reading the auditor’s report and saying that even though they are under no obligation to open their leases … it seems to be maybe appropriate that they do so,” he said. “It’s not about a threat. It’s hoping they’ll just do it.”

Making a threat to strip away tax exemptions should the resorts decline to renegotiate leases would be bad policy for the state, according to Ashe.

“I would never threaten a taxpayer, because I don’t think that’s a very good tax policy. But rather, saying, in thinking about the use of public lands, it’s better to voluntarily step up because the proposals that are from time to time directed at them or any other industry are usually sort of inartful,” he said.

Still, lawmakers question the tax exemptions every year, and Ashe said he wanted to point out that some lawmakers could look to use it as leverage to ensure the leases are fair.

“People gravitate to that … and say, ‘Why do we do that?’ It raises this whole issue about why that equipment and stuff is exempt,” Ashe said. “And then, there’s always the discussion about, ‘Well, they do get a pretty sweet deal.’ People articulate it in different ways.”

Senate President Pro Tem John Campbell, D-Windsor, said he was not aware that Ashe was planning to send the letters. He said would discuss the matter with him.

“I have not had an opportunity to discuss this with Sen. Ashe, nor have I seen the letter,” he said Wednesday. “It’s certainly an issue that I will discuss with him.”

Bennington County Democratic Sens. Dick Sears and Brian Campion, whose districts include Bromley, both said they had concerns with Ashe’s approach.

“There has to be a balance here. I don’t want to do anything to jeopardize Bromley’s ability to attract people to Bennington County,” Campion said.

“Right now people are in a desperation mode. They’re looking (for revenue) in every corner,” Sears said. “I don’t think I want to force ski areas. I don’t want to do anything that impacts the tremendous relationship with our ski areas.”

Parker Riehle

Parker Riehle

Parker Riehle, president of the Vermont Ski Areas Association, said Wednesday the ski resorts were still crafting a response to Ashe. However, he said all are comfortable with the lease agreements in place.

“We certainly still stand by the leases and their terms as still a very good deal for both parties and a very favorable deal for the state of Vermont,” he said. “Overall it’s a really strong partnership.”

The federal government only gets 2.5 percent of lift ticket sales, on average, according to Riehle, and neighboring states get about 3 percent of lift ticket revenue.

“Vermont’s actually way ahead of the game and there’s been a couple of reports issue in that regard that back that up. We certainly are very comfortable and confident in the leases,” he said.

Additionally, the ski industry generates an estimated $100 million in various tax payments to the state, and provides about 12,000 jobs during the winter when other industries are typically laying workers off.

“You can’t just focus on the lease payments and think that they look too small,” he said.

Given the what the ski industry provides to the state, Riehle said the resorts should not be facing the threat of higher taxes.

“In light of the numerous revenue benefits to the state, we certainly don’t see a need to look for any additional tax burden on the ski areas. We certainly don’t want to see anything like that hanging over our heads,” he said.

neal.goswami@timesargus.com

Read Ashe’s letter to Bromley Mountain below:

Speaker Smith rallies his troops

MONTPELIER — Lawmakers, one month into the legislative session, will soon be casting tough votes on bills in committee, and then on the House and Senate floors. That fact is not lost on House Speaker Shap Smith, who looked to rally his troops Tuesday at the weekly Democratic caucus.

A state budget with a $112 million gap that must be closed means cuts will be made to programs that constituents likely depend on. And the public is demanding property tax relief, but voters don’t want to see changes to their local school districts.

Smith, now in his fourth term as speaker, knows just how a legislative session plays out. He warned his faction of the pressures that will soon wash over them as they try to address the state’s challenges.

House Speaker Shap Smith address the Democratic House Caucus on Tuesday, Feb. 3.

House Speaker Shap Smith address the Democratic House Caucus on Tuesday, Feb. 3.

“One of the most difficult parts for all of us … is to keep an open mind and not to close ourselves off to possible solutions to the challenges we face as we move forward. We’re going to get over the next couple of months people asking us to promise them that we won’t do X, Y or Z,” he said. “What’s really important, from my perspective, is to the extent possible, acknowledge that you understand where they’re coming from, but you can’t make them promises because you really need to see what the lay of the land is.”

The constituents, Smith declared, placed their trust and faith in those they elected. Now it’s time for those elected to begin crafting solutions. But solutions will leave some displeased.

“We’re here to grapple with those issues and those constituents send you here because they believe that you’re the person that can grapple with those issues. They trust you to make those decisions. And so have those conversations, understand what they’re thinking and feeling, and bring their voice here and tell them, ‘I want you to be part of this conversation and we can’t close this conversation off before it even starts. We can’t give you the answer before we even know what the problem is,’” Smith said.

The address Tuesday wasn’t the result of any particular concern about morale within the caucus, according to Smith aide Dylan Giambatista. Rather, it was an effort to encourage members to remain focused and ready themselves for the work ahead, he said.

Just a few minutes before the Democratic caucus, House Minority Leader Don Turner, R-Milton, delivered his own pep talk to the Republican caucus. He, too, reminded his members that the constituents sent them to Montpelier with a purpose. He urged them to consider all implications — particularly economic impacts — before casting any yes votes, even for bills in committee.

Like any good leader, Smith offered hope to his members.

“We spend some time here wrestling with really difficult issues and it is easy to look at the glass half empty rather than the glass half full,” Smith said to a room full of mostly House Democrats, but also a few lobbyists and reporters.

He recounted recent, positive meetings with tech entrepeneurs, who he said are hiring. “There was a lot of optimism about what can happen, and it wasn’t just big businesses. It was businesses ranging from three to four people to 500 to 600 people,” Smith said.

Tuesday’s pep rally ended, of course, on a high note.

“There is a really good energy going through this building right now. I feel that people are up to the challenge. That’s it’s not partisan driven. That people are looking at these as Vermont’s challenges and Vermont’s problems, not Democrats’ problems, not Republicans’ problems, not Progressives’ problems, not independents’ problems,” the speaker said. “Remember we are still sitting in a Democratic institution that still allows access to its citizens and still values solutions to problems not barriers to solutions. We’re in Montpelier, we’re not in Washington. And thank God for that, right?”

Video: Vermont this Week on Vermont PBS

Vermont Press Bureau reporter Josh O’Gorman joins Terri Hallenbeck of Seven Days, Johnny Herrick of VTDigger and moderater Stewart Ledbetter on this week’s show.