Category Archives: Appropriations

Lawmakers strike tax deal without gov’s approval

MONTPELIER — House and Senate negotiators were nearing a deal on a $30 million revenue package early Saturday morning that will help balance the 2016 fiscal year budget and close a projected $113 million gap — but includes provisions Gov. Peter Shumlin has said he does not support.

The bulk of the new revenue comes from changes to the income tax code. Both the House and Senate have agreed with the governor to raise $15 million by eliminating taxpayers’ ability to deduct their prior year local and state taxes on their state returns.

Senate Finance Committee Chairman Tim Ashe, D/P-Chittenden, briefs reporters late Friday night on a tax plan. (Photo by Erin Sigrist)

Senate Finance Committee Chairman Tim Ashe, D/P-Chittenden, briefs reporters late Friday night on a tax plan. (Photo by Erin Sigrist)

But the House and Senate are also looking to raise about $10.5 million by making changes to how much taxpayers can deduct. Under the plan lawmakers were nearing agreement on, income tax deductions would be capped at two times the standard deduction — about $25,000 for a couple. The plan exempts charitable donations and deductions for catastrophic health care costs, however.

In total, lawmakers are looking to raise $26 million in new income taxes with the changes.

Shumlin has spent much of the week restating his opposition to lawmakers’ plans to limit deductions. He made that case again to the Vermont Press Bureau in an interview Friday morning.

“The reason states don’t tend to cap these deductions … is because they all provide an important role in ensuring you have a strong economy and a strong state and an economy that works for every single member of that state,” Shumlin told the Vermont Press Bureau in an interview. “Among the tax choices that are going to be made, let’s not make illogical choices.”

Senate President Pro Tem John Campbell, D-Windsor, has said Shumlin has threatened to veto the revenue bill because of his opposition to deduction limits.

But that didn’t stop lawmakers from forging ahead.

Senate Finance Committee Chairman Tim Ashe, D/P-Chittenden, said he worked with the House to complete a revenue plan both chambers could agree on.

“The governor’s made no hesitation to say that he would prefer that the only income tax that’s raised be the $15 million that he raised,” Ashe said. “We arrived at what we thought was a fair way to raise the money and that we could reach agreement with the House.”

House Ways and Means Committee Chairwoman Janet Ancel, D-Calais, echoed Ashe’s comments, saying the revenue plan is one that both sides have agreed to.

“We’re trying to get a revenue bill and trying to get out of here,” Ancel said.

House Speaker Shap Smith, D-Morrisville, acknowledged the tax deal was arrived at without the governor’s approval.

“That is true, yes,” the speaker said.

But the plan addresses many of the concerns Shumlin has raised, according to Smith.

“We’ve responded to a number of the concerns that the governor expressed, particularly around the health care and the charitable deduction. We tried to address that. So, my hope is that in addressing those things we can move closer together. I’m eternally optimistic, but perhaps it is unwarranted in this instance,” he said.

The deduction cap included in the deal is fair, Smith said.

“You’re going to get a $25,000 cap on your itemized deductions. That’s a significant amount of allowable deductions, including, on top of that, charitable deductions and for medical. It seems to me pretty reasonable,” he said.

Lawmakers planned to complete the deal early Saturday morning and return later in the day to have both chambers vote on it. Smith declined to comment on how lawmakers would address a potential veto by Shumlin.

“We’ll take it one step at a time,” Smith said.

Scott Coriell, spokesman for Shumlin, left the State House around 11:30 p.m. Friday and said the administration was reviewing the proposal and would have no comment until later on Saturday.

House Appropriations Committee Chairwoman Mitzi Johnson, D-South Hero, left, and Senate Appropriations Committee Chairwoman Jane Kitchel, D-Caledonia, speak during budget negotiations Friday.

House Appropriations Committee Chairwoman Mitzi Johnson, D-South Hero, left, and Senate Appropriations Committee Chairwoman Jane Kitchel, D-Caledonia, speak during budget negotiations Friday.

The revenue plan also includes extending the state’s 6 percent sales tax to soft drinks, which will raise $5.1 million, extending the 9 percent rooms and meals tax to vending machine purchases, and includes a 3 percent minimum tax on taxpayers earning at least $150,000.

“That’s more of a floor payment on people with larger incomes,” he said.

The House and Senate had also agreed in principal to the budget and were expected to sign off on it early Saturday morning.

Capitol Beat with the Governor 5-15-15

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Gov. Peter Shumlin and Vermont Press Bureau chief Neal Goswami chat about the end of the session and the bills that are still in play.

Gov. Peter Shumlin on the Capitol Beat podcast Friday, May 15, 2015.

Gov. Peter Shumlin on the Capitol Beat podcast Friday, May 15, 2015.

Capitol Beat 5-11-15

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Barre-Montpelier Times Argus Editor Steve Pappas and Vermont Press Bureau chief Neal Goswami discuss the sexual assault case against Sen. Norm McAllister, R-Franklin, the last week of the session and Bernie Sanders.

Capitol Beat with the Governor 5-8-15

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Gov. Peter Shumlin discusses  end-of-session issues that remain unresolved, the possibility that lawmakers will vote to remove the state’s philosophical vaccine exemption and the arrest of Franklin County Sen. Norm McAllister on sex charges.

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Shumlin defends late budget push

MONTPELIER — Gov. Peter Shumlin said Friday he is asking lawmakers to cut an additional $10 million from the budget because they have rejected his proposal to institute a payroll tax to help pay for Medicaid costs.

Shumlin summoned the chairs of Senate money committees Wednesday — one day before the Senate took up the annual budget bill — to tell them they needed to cut more and tax less. The move frustrated lawmakers who are grinding toward adjournment, which is to come in mid-May.

On Thursday, administration officials presented a list of $8 million in further cuts to the Senate Appropriations Committee and made clear the third-term Democrat did not favor their tax plans.

Gov. Peter Shumlin speaks at a recent State House news conference.

Gov. Peter Shumlin speaks at a recent State House news conference.

“I really feel strongly that the tax packages being contemplated in this building will hurt our economy and hurt Vermonters,” Shumlin said in an interview with the Vermont Press Bureau on Friday. “I believe that the current budget framework needs to cut more and tax less.”

At the heart of the matter, Shumlin said, is how lawmakers have chosen to fund Medicaid case loads, which expanded under the federal Affordable Care Act to the tune of $16 million. The governor’s budget proposal used a 0.7 percent payroll tax on Vermont businesses to raise $90 million to cover that cost as well as to boost payments to Medicaid providers.

Lawmakers have rejected that, however, and funded Medicaid case loads through various taxes. But Shumlin, while now acknowledging his plan is unlikely, wants lawmakers to cut deeper rather than raise taxes.

“That idea has been an uphill slog and it looks like it’s possible that it may not come to fruition,” he said. “Unless they suddenly … see the light, which doesn’t seem extraordinarily likely, but I’m still hopeful, we have a $16 million budget challenge that we didn’t have, that we had taken care of.”

Shumlin said his proposal created an ongoing, dedicated source for Medicaid. Lawmakers, meanwhile, have created a host of new taxes to balance the general fund, he said.

“They want to take away your home mortgage deduction because you bought a home, they want to take away your charitable deduction because you want to support charities in your community, they want to take away the catastrophic health care deduction,” he said. “They want to tax soda and everything else with sugar in it because they say that drinking that stuff isn’t healthy for you, which it probably isn’t, but they also want to tax water. Tax water? Really? I thought you just said you shouldn’t drink sugary things, now they’re saying we’re going to tax water.”

Lawmakers are not amused with the governor’s late push to adjust their work. House Majority Leader Sarah Copeland Hanzas, D-Bradford, noted that lawmakers used the same amount of new revenue to support the general fund as Shumlin did in his proposal, but their challenge was even greater since the state saw an additional $18 million revenue downgrade after his budget address.

“We closed the $113 million budget gap with the same $35 million that the governor closed his $94 million gap. The same amount, not the same kind of revenue. So, to have the governor suggest that we are spending too much and raising too much in taxes is really perplexing,” she said. “I don’t know where they’re doing their math, but $35 million is $35 million.”

Rep. Sarah Copeland Hanzas

Rep. Sarah Copeland Hanzas

Hanzas said the governor should have made his pitch earlier — before the House passed its budget and sent it to the Senate.

“Where were you on Jan. 20 because it’s three months later and we’ve been through the painful process of vetting all of our painful priorities,” she said. “We would have appreciated them in January, not so much now.”

House Appropriations Committee Chairwoman Rep. Mitzi Johnson, D-South Hero, echoed that sentiment.

“It’s frustrating that he’s had opportunities for the last three months to weigh in on the budget and we don’t have a balanced budget proposal from him. He’s choosing to sort of nit-pick at different things,” Johnson said.

Both Johnson and House Speaker Shap Smith said Friday that the House-passed budget does fully fund the Medicaid case loads, but does not do it the way Shumlin sought.

Shumlin dismissed criticism of his timing, saying previous governors have also pushed for priorities late in the process.

“I don’t know where they’ve been. I’ve served under [Former Gov. Howard] Dean, [former Gov. Jim] Douglas, and I cannot remember as a legislative leader right before we’ve passed the budget not having the governor sit down with us and explain their concerns about budget and taxes. That’s what governors do. So, I understand it’s a time of year where folks get emotional,” Shumlin said.

Late-season requests are part of the budget process, Shumlin said.

“Folks get frustrated this time of year, I understand that, and I’m sympathetic to it. I’ve been on both sides of it in the governor’s office and the legislative leadership end of it,” he said. “The only thing I want to point out is this is not unusual and we shouldn’t be fearing frustration we should be fearing raising taxes on Vermonters at a time when they’re having a difficult time paying their bills, and we should be fearing passing a budget that isn’t sustainable for the years going forward.”

“I believe that my judgement is correct. We should cut $10 million more from the budget and not raise taxes on Vermonters by that $10 million,” Shumlin added.

The Senate appeared ready Friday to reject most of the $8 million in cuts the governor proposed this week. A $1.3 million savings pharmacy costs looked likely, but bigger ticket items, including an additional $2.8 million in labor savings on top of the $10.8 million Shumlin previously requested, appeared to lack support.

neal.goswami@timesargus.com

Capitol Beat with the Governor 5-1-15

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Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal Goswami about his budget disagreements with lawmakers.

Shumlin steps into Senate budget process

MONTPELIER — The Shumlin administration is pushing back against the Senate’s budget plan as the chamber prepares to take it up on the floor Thursday.

“Less spending and fewer taxes,” Gov. Peter Shumlin said Thursday morning.

Administration officials were preparing to meet with the Senate Appropriations Committee Thursday morning to discuss further cuts and ease back some of the tax increases included in the Senate’s budget and tax bills.

“There’s not a set number for anything,” Secretary of Administration Justin Johnson said. “This is not an uncommon conversation for the end of the legislative session.”

A House-passed budget bill closes a $113 million projected gap in the 2016 fiscal year budget. It uses $53 million in spending cuts, $35 million in new revenue and about $25 million in one-time funds to balance the budget.

The Senate version balances the budget in a similar way.

But Shumlin is not pleased with the direction lawmakers have chosen.

“He’s not loving all the revenue. We think that in order to keep taxes down — tax increases down — we have to have a budget that’s as efficient as possible,” Johnson said. “We know that our growth is forecast over the next few years to be around 3 (percent) and the expenditures have been around 5 (percent). We’d like to get them under 5. It’s not a problem you’re going to solve all at once but one that we can solve over time

Johnson said the administration’s late-stage interest in negotiating different terms in the budget and tax bills is not out of the ordinary.

“It’s just sort of putting some pressure back on to make sure we do the best we can,” he said.

Sanders sounds alarm on GOP budget

MONTPELIER — Vermont Sen. Bernie Sanders warned governors in all 50 states Monday of pending cuts headed their way if a GOP spending plan being negotiated this week by House and Senate conferees is approved.

In separate letters to each state, the independent Sanders, ranking member on the Senate Budget Committee, characterized the potential cuts as ‘devastating.” He said they would impact working families, the elderly, the sick, the poor and children.

“It is an embarrassingly disastrous document,” Sanders said of the budget proposal in a telephone interview Monday.

According to Sanders, who is mulling a run for president to promote progressive ideals, Vermont could face dire consequences under the House and Senate budget resolutions that outline federal spending for the next decade. House and Senate conferees were working Monday to reconcile differences between the two chambers and are expected to reach agreement early this week.

Sen. Bernie Sanders

Sen. Bernie Sanders

Among the potential impacts in Vermont that Sanders outlined in his letter to Democratic Gov. Peter Shumlin are:

— 32,000 people could lose health coverage
— 5,000 jobs could be lost as a result of cuts to education, transportation and other programs
— Cuts to Pell grants could lead to higher tuition for 12,000 college students
— Investments for roads and bridges could be reduced by as much as $261 million

The cuts to programs and services that serve the poor “will be devastating for the middle class and working families of our country,” Sanders wrote in his letter.

“At a time of massive income and wealth inequality the Republican budget will make the very rich even richer, while causing increased pain and suffering for the middle class and the most vulnerable people in our state as a result of draconian cuts to important programs,” Sanders wrote.

Similar letters were sent to the other 49 governors outlining potential cuts in their states.

“I will do my best to see that (the budget plan) is defeated and I hope that some of these governors that we have written to will weigh in on this discussion,” Sanders said.

The GOP spending plan looks to “terminate” the Affordable Care Act, commonly known as Obamacare, and cut $40 billion from Medicaid over the next 10 years, according to Sanders. Doing so, he said, would mean a loss of health coverage for millions.

“They’re just going to throw another 27 million people off of health insurance with no plan to address that. None,” the senator said. “That will be a disaster for states who will have to figure out what to do. There is no question that people will die as a result of that.”

The plan that the GOP is finalizing drops a previous proposal to institute a voucher system for Medicare that would provide the elderly with subsidies to purchase private insurance.

Sanders also decried a nearly 100 billion cut to Pell grants for college students, cuts to nutrition programs and the elimination of the estate tax, which he said would provide about $270 billion in relief to the richest 0.2 percent of Americans over the next 10 years.

“It is a budget that is so bad that I think it’s hard for people to believe it’s true, but it is,” Sanders said.

Shumlin released a statement Monday expressing confidence that the state’s congressional delegation will advocate for a budget that serves Vermont well.

“As Senator Sanders outlines, the effects of federal budget decisions on Vermont are real and will have an impact on the services Vermonters rely on,” the governor said. “As we await the final budget from Washington, we do so knowing that we have fighting for us on the Budget Committee one of America’s greatest champions for the middle class in Bernie Sanders. Combined with Senator Patrick Leahy and Congressman Peter Welch, Vermont is well represented in Washington by the best Congressional Delegation in America.”

The budget resolution provides a broad spending plan but does not actually appropriate funds. Its passage would pave the way for spending bills that do appropriate funds to advance.

Sanders said he will look to prevent such spending bills from passing.

“I will certainly do everything I can to urge the president to veto any piece of legislation that comes out that has this framework in it,” he said. “Whether the president vetoes it or not, that’s another story. I certainly hope he will.”

According to Sanders, the impacts he identified are based on an evaluation of House and Senate versions of the budget resolutions by the Office of Management and Budget, the Economic Policy Institute and the Institution of Taxation and Economic Policy. Some data was generated based on projections from the Census Bureau and the Centers for Medicare and Medicaid Services.

neal.goswami@timesargus.com

Read Sanders’ letter to Gov. Peter Shumlin below:

Lawmakers look to retirement bonuses to save the state money

MONTPELIER — The Shumlin administration has proposed a retirement incentive package for state employees that could save the state $2.5 million, providing most of the retirees are not replaced.

Monday morning, the Senate Appropriations Committee reviewed a proposal that would offer financial bonus to as many as 300 employees who are already eligible to retire, with the goal of leaving 75 percent of those positions vacant after the employees retire.

The offer would be open to employees who are at least 62 years old and have put in at least 5 years of service; employees with at least 30 years of service; and employees whose age and years of service totals 87 or more.

The proposal would pay employees who have worked at least 5 years and less than 15 years a bonus of $750 for every year worked. Employees who have 15 or more years would receive $1,000 for every year worked.

Bonuses would be capped at $15,000 per employee and would be paid out either in one lump sum or in two payments, with no additional money for employees who choose to take two payments.

Currently, there are 915 state employees who are eligible for the incentives. The proposal would cap the maximum number of people who could take advantage of the incentives at 300. If more than 300 workers want to take the retirement bonus, the state will hold a lottery.

Committee Chairwoman Jane Kitchel, D-Caledonia, asked why the offer isn’t being made to employees who have been with the state the longest. Sec. of Administration Justin Johnson said the state needs to be very careful not to give the appearance of engaging in any behavior that could be construed as age discrimination.

Sen. Richard McCormack, D-Windsor, questioned the message some people might take from a proposal that ultimately looks to reduce the state’s work force by as many as 225 employees.

“Are we assuming their work was not being done efficiently?” McCormack asked. ““Either we’re saying these people weren’t pulling their weight in the first place, or their work was not essential.”

The retirement proposal is part of a plan by administration to save $10.8 million in state employee costs, one possible step to close the state’s $113 million budget gap. Shumlin has proposed reopening the state employee contract for renegotiation, a move opposed by the employees’ union.

The administration has warned that failing to reopen the contract could result in hundreds of layoffs, but on Monday, Johnson said that is not what the administration wants.

“It’s important that we don’t do across-the-board cookie-cutter cuts,” Johnson said.

Steve Howard, executive director of the Vermont State Employees Association, said the proposal — which could reduce the number of employee layoffs to fewer than 50 — has the support of his organization..

“We brought the issue of voluntary retirement incentives to the table for negotiation with the Shumlin administration,” Howard said. “While were not thrilled that we might see 300 fewer positions, we like the idea that this might result in fewer (layoffs).”

State Treasurer Beth Pearce warned that savings from offering retirement bonuses will only be found with a commitment to leave unfilled the positions vacated by the retiring employees.

In 2009, the state offered retirement bonuses to employees under a system that Johnson said “mirrors” the current proposal. A total of 243 people took advantage of the incentives.

However, that proposal was coupled with the plan to leave one-third — or 81 — of the positions unfilled. Instead, during the next four years, the state added 543 positions, according to Pearce.

Sen. Diane Snelling, R-Chittenden, referred to the 2009 round of retirements as “disruptive.”

“Will we ever get to the point when we have the right number of employees in the right places?” Snelling asked.

State workers, supporters rally against cuts

MONTPELIER — Hundreds rallied at the State House Saturday to oppose cuts to the state budget and $10.8 million in labor savings sought by both the Shumlin administration and lawmakers in an event organized by the Vermont State Employees Association.

The state employees’s union was joined by other unions and groups, including the Vermont NEA, AFSCME and the Vermont Workers Center, to protest the the budget plan sought by Gov. Peter Shumlin and lawmakers.

VSEA members and supporters held a rally at the State House Saturday, April 11, 2015.

VSEA members and supporters held a rally at the State House Saturday, April 11, 2015.

The House has passed a budget that uses $33 million in new tax revenue, $53 million in cuts and $25 million in one-time funds to close a $113 million budget gap. The VSEA and others, however, want to see more tax revenue raised and fewer cuts.

The House-passed budget includes $10.8 million in labor savings that Shumlin, a Democrat, proposed. He has asked the VSEA to renegotiate its contract to help achieve the savings. Failing to do so will result in hundreds of layoffs, according to the administration.

About $2 million in labor savings has been identified by the administration, but $8.8 million remains of its target. It wants to delay by six months a 2.5 percent cost of living increase due to state employees in the 2016 fiscal year, and delay by one-year step-increases that average out to an additional 1.7 percent pay increase next year. Those steps would require union approval.

The union has so far refused to renegotiate, and has proposed ways to raise additional revenue instead. The 500 or so people gathered at the State House Saturday heard from Ed Olsen, a snow plow driver for the Agency of Transportation, about why the union is not willing to renegotiate.

“I pay taxes to this great state of Vermont, just like all the other hardworking, middle-class people. As a matter of fact, we, the middle-class Vermonters, pay more than 10 percent of our wages to this beautiful statehouse behind me, unlike the wealthy citizens who pay back 8 percent of their wages to our economy,” Olsen said. “That ain’t right. It pisses me off. That’s the biggest reason why I came here today.”

Olsen said the state’s wealthiest residents “aren’t being asked to give up anything.”

Agency of Transportation worker Ed Olsen speaks at State House rally Saturday, April 11, 2015.

Agency of Transportation worker Ed Olsen speaks at State House rally Saturday, April 11, 2015.

“I’m tired of being asked to give back more and more of my wages and benefits to help rescue Vermont’s economy,” he said. “I need every bit of the cash I earn. Vermont has a budget deficit and they always want to balance the budget on the backs of hardworking, middle-class citizens of Vermont.”

Several speakers compared Shumlin to Wisconsin Republican Gov. Scott Walker, who has sought concessions from union workers to help save money in that state, including Rev. Earl Kooperkamp of Church of the Good Shepherd in Barre.

“Vermont is not Wisconsin. Peter Shumlin is not Scott Walker. But it’s getting pretty damn hard to tell the difference,” he said.

Kooperkamp equated the effort to obtain savings from state workers to the seventh commandment — thou shalt not steal.

“It’s wrong, it’s immoral, and we’re here to say that,” Kooperkamp said.

The Shumlin administration is expected to meet again early next week to continue negotiations.

neal.goswami@timesargus.com

Capitol Beat with the Governor 04-10-15

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Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal Goswami about the ongoing process to find $10.8 million in labor savings from the Vermont State Employees Association. He also discusses a failed effort to ban teacher strikes and lawmakers’ efforts pare down his legislative proposals.

Administration, VSEA find some savings, still far short of $10.8 million target

MONTPELIER — Ongoing talks between the Shumlin administration and the Vermont State Employees Association have resulted in some identified savings, but the union is still not interested in reopening its contract to help secure the remainder of the $10.8 million in labor savings the administration is seeking.

The administration says it needs to cut $10.8 million in labor costs in order to close a $113 million budget gap. The union, meanwhile, has proposed ways to raise revenue instead. The administration has shrugged off those proposals, however, and says it will seek as many as 300 layoffs to achieve the requisite savings if the union does not renegotiate some terms.

The House has passed a passed a budget that incorporates a generic $10.8 million in labor savings.

Justin Johnson

Justin Johnson

Secretary of Administration Justin Johnson, following another meeting with the union Thursday, said his team has found about $2 million in savings by freezing salaries for exempt employees earning more than $100,000 a year, reducing the use of temporary employees and rescinding some benefits to designated managers.

The administration is also considering encouraging employee retirements.

“We have had a long conversation about the idea of retirement incentives,” Johnson said.

But the full benefit of offering retirement incentives is unclear. Johnson said the state treasurer’s office has some concerns because savings to the general fund would be offset elsewhere because of the need to begin paying out benefits. He said the expected savings is between $500,000 and $1 million.

“That would require us not to fill any of the positions that retired. That’s problematic,” Johnson said.

If all of the proposed savings were realized, that would leave about $7.3 million that still needs to be achieved.

With the union’s blessing, Johnson said the administration would look to institute a six-month delay in the 2.5 percent cost of living salary increase the contract calls for in the 2016 fiscal year. That would save about $2.5 million.

“It wouldn’t cost anyone anything because no one’s pay would go down,” he said.

Eliminating one year of “step increases” would save $3.9 million. State workers are grouped into various pay grades, each containing 15 steps. The first five step increases occur in successive years. The next few step increases come every two years, and the remaining step increases come every three years. The pay raises average out to 1.7 percent annually.

Those ideas would require approval from the union.

“There are some big chunks of money that you could save by doing things, but they are contractual,” Johnson said.

The administration is also considering instituting five furlough days to save $3.5 million.

“That in some ways is worse than delaying the cost of living because it means people would actually get a cut in pay,” Johnson said.

Finally, a 50 percent reduction in mileage reimbursements would save more than $800,000.

All of those ideas were outlined in a memo to VSEA President Shelley Martin following a meeting between the two sides on Thursday.

“We’re just making the point that you could get to the numbers by doing some of these things. But, we can get to the numbers anyway,” Johnson said.

VSEA Executive Director Steve Howard said the union is willing to work with the administration on savings “right up to the last hour of the legislative session, but we’re not opening our contract.”

Steve Howard

Steve Howard

“We have been consistent throughout the whole effort … that state employees cannot be asked to dip into their paychecks to balance the state budget before wealthy Vermonters are asked to pay more,” he said.

Union members have been “actively engaged” in the process are not interested in renegotiating the terms of their contract.

The two sides are expected to meet early next week to continue discussions.

neal.goswami@timesargus.com

Read the memo to VSEA President Shelley Martin:

 

Read the Response from VSEA:

Lawmakers to discuss guns, education and health care

MONTPELIER — Lawmakers this week will tackle issues related to health care, economic development, gun control, education and advanced directives for the terminally ill.

Tuesday, the Senate is expected to give final approval to a bill that would expand the circle of people who are authorized to make end-of-life decisions for a patient who lacks the capacity to do so for himself or herself.

Current law allows for family members — spouse, parent, adult child, sibling, or grandchild — members of the clergy to make decisions regarding do-not-resuscitate (DNR) orders or an order to continue life-sustaining treatment.

The proposed bill would allow for the designation of one or more “surrogates” who are capable of acting “in accordance with the patient’s known wishes and values,” the bill states.

Also on Tuesday, the Senate will take up an economic development bill that would lower the wage threshold for employers to qualify for the Vermont Economic Growth Initiative, a state program that provides financial incentives for employers in a number of fields — including manufacturing and technology — who offer their employees a “livable wage.”

The bill before the Senate would lower that wage amount from $14.64 an hour to $13 an hour. Critics of the bill say the reduction in the salary threshold could end up costing the state money as more workers qualify for public assistance.

Still on the Senate side, this week, the Senate Education Committee will discuss a school-district merger bill approved last week by the House. The bill calls for school districts to study and come up with proposals on how they will merge into districts with at least 1,100 students.

In a nod to the narrative coming out of the November elections that voters are fed up with rising property taxes, the bill includes a provision to cap education spending if it exceeds this year’s rate of growth of 2.95 percent.

Over on the House side, the Judiciary Committee will discuss and take testimony on a gun-control bill approved by the Senate in March. The bill would require the state to report individuals who have been adjudicated by a court as a danger to himself or others to the National Instant Criminal Background Check Registry.

The committee will take testimony from advocates of the bill — such as Ann Braden, co-founder of Gun Sense Vermont — and opponents, including Ed Cutler, president of Gun Owners of Vermont, who will likely rehash the arguments heard throughout the session in the Senate Judiciary Committee and during a public hearing in February.

Barring any surprises in the House Judiciary Committee, the real debate will likely occur when and if the bill comes up for a vote in the House.

On the health care front, the House Appropriations Committee will discuss a bill approved by a narrow margin last week by House Ways and Means that would raise taxes on cigarettes by 25 cents a pack and would impose an excise tax of 0.5 cents an ounce on sweetened beverages, which is projected to raise approximately $18 million.

The money is intended to leverage federal dollars to raise reimbursement rates for Medicare and Medicaid, but is less than the $52 million in revenue proposed by the House Health Care Committee.

The Appropriations Committee is expected to take recommendations from the Health Care Committee as to how the money should be used.

Beverage tax advances to support health care spending

MONTPELIER — The House Ways and Means Committee on Thursday advanced a sweetened beverage tax and a hike in the state’s cigarette tax to cover the cost of proposed health care initiatives after weeks of wrangling.

Thursday’s vote came after a number of potential revenue sources were laboriously explored. Committee Chairwoman Janet Ancel, D-Calais, and Democratic House leaders considered myriad options before piecing together a plan that raises about $18 million and could also garner enough votes.

In the end, the committee found just enough votes to pass the bill out on a 6 to 5 vote.

Rep. Janet Ancel

Rep. Janet Ancel

“I would like to have a stronger vote coming out of the committee than we’re going to have, but I really appreciate the work that people have done to get to where we are,” Ancel said before the vote.

The committee-passed revenue plan includes a half-penny excise tax on sweetened beverages, including diet drinks and any beverage with artificial sweeteners. It also includes a 25-cent increase in the cigarette tax with a proportional increase in the tax on other related products like chewing tobacco. In addition, the plan eliminates the current sales tax exemption on dietary supplements.

Competing revenue plans sought to eliminate sales tax exemptions on soda, candy, bottled water and other products, but never found enough support on the committee, which features centrist Democrat Jim Condon of Colchester and independent Adam Greshin of Warren.

“Anytime you have an array of taxes and you’re looking at sales tax exemptions, which is kind of the alternative funding sources that we looked at, you have issues because of folks who live on the New Hampshire border,” Ancel said. “I think the retailers have been successful lobbyists against any sales tax on candy and soda for years. It was a whole variety of things. I think if you talk to any member of the committee they would have their own reasons for having trouble getting to yes.”

Democrats waited patiently for days for all committee members to be present. With Rep. Johanna Donovan, D-Burlington, back at the State House Thursday after several days away, Democrats finally had enough votes in place to advance the revenue package.

The bill that arrived from the House Health Care Committee was a non-starter for many members of Ways and Means. That plan sought to spend about $52 million on health care and used a 0.3 percent payroll tax and a 2-cent per ounce excise tax on sugar-sweetened beverages.

Through its weeks-long deliberations, Ways and Means killed off the payroll tax — first proposed by Democratic Gov. Peter Shumlin in January at 0.7 percent — and lowered the beverage tax significantly. Ways and Means also extended the beverage tax to diet drinks and anything that is sweetened with either natural or artificial sweeteners. Maple syrup, the state’s hallmark product, is exempt.

For Reps. Sam Young, D-Glover, and Jim Masland, D-Thetford, the two-cent tax was just too high. But eliminating it altogether was not an option for Rep. George Till, D-Jericho, a medical doctor, who sought an increase in the cigarette tax.

The final Ways and Means revenue plan nearly hit another roadblock Thursday when Young made a motion to reduce to the increase in the cigarette tax. Young agreed to withdraw the amendment after Till threatened to drop his support for the entire measure.

Opponents of the excise tax vowed to continue fighting against. Jim Harrison, president of the Vermont Retailers and Grocers Association, said the Ways and Means plan “is totally going in the wrong direction.”

“The excise tax is absolutely a nonstarter for us. This is a very regressive tax on food products that’s going to do nothing except hurt Vermonters in their pocketbook and send more retail business out of state because products in Vermont will be more expensive,” Harrison said.

And Andrew MacLean, a lobbyist for the beverage industry, said the original “health care aspects of the bill have dissipated” as lawmakers have moved beyond just sugar-sweetened beverages. It is now “strictly a revenue generator,” he said.

Andrew MacLean

Andrew MacLean

“I think the problem with the excise tax is it puts a stigma on a particular business and a particular product and its something that can be raised over time,” MacLean said.

The bill passed Thursday by Ways and Means discarded the House Health Care Committee’s previous policies and spending. The Health Care Committee’s revised plan that takes into account the available revenue will be finalized by the House Appropriations Committee.

That plan, outlined this week will provide about $3.3 million in state funding during the 2016 fiscal year to boost Medicaid reimbursement rates for primary care providers. That would draw down $3.7 million in federal funds.

The health care proposal would also provide $2.45 million for a Medicaid rate increase for professional services, drawing down $2.77 million. No additional state funds will be applied to hospital outpatient rate increases.

The House Health Care Committee’s plan provides just a fraction of the Medicaid rate increases that Shumlin proposed in his January budget address.

neal.goswami@timesargus.com

Dispatch centers get temporary reprieve

MONTPELIER — Emergency dispatch centers in Rutland and Derby will get a temporary reprieve from the chopping block in the state budget approved Monday by the House Appropriations Committee.

Gov. Peter Shumlin proposed in his recommended budget that two of the state’s four public safety answering points be closed and operations consolidated with the remaining two in Williston and Rockingham. The plan, according to the administration, saves $1.7 million annually and would eliminate about 15 of the state’s 71 full-time and 33 temporary emergency dispatchers.

Facing a $113 million gap in the 2016 fiscal year budget, the administration has insisted the consolidation is necessary to help reduce spending in the budget.

But the House Appropriations Committee sought a way to keep all four dispatch centers open, even temporarily, following strong push back from the Vermont State Employees Association and first responders from around the state. Chairwoman Mitzi Johnson, D-South Hero, said the the committee’s plan will keep the PSAPs in Rutland and Derby open until at least Sept. 15.

Rep. Mitzi Johnson

Rep. Mitzi Johnson

The House plan uses $425,000 from the state’s Universal Service Fund, which assesses a 2 percent fee on telecommunications services to supports Vermont’s Enhanced E-911 program. It was approved by the committee unanimously.

“Although it is not our preference to use that money for anything other than, specifically, 911 call taking, this was closely related enough,” Johnson said Tuesday. “It is strictly one-time, USF money that keeps the four PSAPs running as is until Sept. 15.”

Johnson said the committee heard from many people, particularly in the Rutland and Derby areas, who are concerned that emergency dispatch services will suffer under the administration’s consolidation plan. Johnson said her committee deferred to the Government Operations Committee on safety concerns, but heeded requests to allow those communities time to explore options to maintain local dispatch services.

“It gives time for local entities to try to come up with an alternative or a transition plan,” she said. “They asked for some time to come up with a local alternative, so that’s what we’re offering.”

The committee included legislative language in its budget plan calling for Public Safety Commissioner Keith Flynn to meet with first responders in the Rutland and Derby areas about how dispatch services could be funded.

“I think there were enough questions raised, and there were enough possible alternatives raised, the fact that there are potentially viable, home-grown alternatives out there, is reason enough to say, ‘Is there a different way to do things?’” Johnson said. “There are places all over government where we’re asking for a different way to do things.”

Shumlin spokesman Scott Coriell said the administration is reviewing the Appropriations Committee plan and would not be commenting on each component. Shumlin issued a statement Monday after the House approved its plan on a bipartisan, 11 to 0 vote.

“My budget team will take a close look at the specifics in the bill passed this afternoon, and will continue to work closely with the Legislature as the budget makes its way through the next steps in the House and on to the Senate later this session,” Shumlin said in the statement. “I remain committed to making sure this budget responsibly spends our limited resources to advance our economy and protect our most vulnerable.”

neal.goswami@timesargus.com