Category Archives: Budget

Sanders surging, shaping the debate

DES MOINES, Iowa — Sen. Bernie Sanders took the stage at a Drake University auditorium on a recent Friday to wild applause and several standing ovations before he was even introduced. It was the first of several events he held on a weekend swing through Iowa in his quixotic quest for the presidency.

“Whoa, we’ve got a lot of people here tonight!” the 73-year-old told the adoring crowd. “Sometimes our campaign has been referred to as a fringe campaign. Well, if this is fringe I would hate to see mainstream.”

Sanders, Vermont’s junior senator and a self-described democratic socialist, launched his bid for president on the shore of Lake Champlain in Burlington, Vt., in late May in front of thousands of supporters. Since then he has drawn impressive crowds in Iowa, New Hampshire and Minnesota. More large crowds were expected this weekend in Nevada and Colorado.

Sen. Bernie Sanders addresses a crowd at Drake University in Des Moines, Iowa.

Sen. Bernie Sanders addresses a crowd at Drake University in Des Moines, Iowa.

It’s an auspicious start for a long-shot candidate that many expected to serve as a stalking horse for liberal candidates, perhaps for fellow liberal Democratic candidate Martin O’Malley, the polished-looking former Baltimore mayor and Maryland governor who is 20 years his junior.

But Sanders’ star has risen quickly, along with his most recent poll numbers. As he motored around Iowa in his rented white sedan, reporters from CNN, the Washington Post, Politico and other national organizations followed, along with a reporter from Vermont interested in how Iowans would react to the sometimes prickly man with unruly white hair and a Brooklyn accent. Continue reading

Watch: Report From Washington on Vermont PBS

Vermont Press Bureau chief Neal Goswami hosted “Report From Washington” this week with U.S. Sen. Patrick Leahy. Watch the full program below.

Tax deal struck, adjournment looming

MONTPELIER — After a week of veiled veto threats and behind-closed-doors meetings, Gov. Peter Shumlin emerged from his ceremonial office Saturday afternoon with legislative leaders to announced a tax deal — the linchpin paving the way for adjournment.

“I’m really pleased to announce that we’ve reached a deal on the budget that allows us to balance the budget and raise the revenue for the budget in a way that’s not only fiscally responsible but ensures that we can continue to grow this economy for every single Vermont,” Shumlin said, with House Speaker Shap Smith and Senate President Pro Tem John Campbell on either side of him.

unnamedDetails of the $30 million in new taxes raised to balance the 2016 fiscal year budget were to be released later Saturday.

“Everyone has given a little. I think it’s an incredibly sensible plan and most importantly we’re meeting our commitment that we all pledged to keep in this building in January of closing a budget gap by making smart choices for Vermonters and ensuring that our budget is sustainable going forward,” the governor said.

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.

House GOP will support veto of tax bill

MONTPELIER — House Republicans voted in caucus Thursday afternoon to help sustain a veto of a revenue bill — if Gov. Peter Shumlin elects to veto the legislation — as House and Senate negotiators look to finalize how they will raise money to support the state budget.

GOP Leader Don Turner, of Milton, asked his caucus to take a position Thursday as negotiators continued to work.

“It’s my feeling that if the governor is going to step up and help us … then I think that’s a good thing,” Turner said.

Shumlin is opposed to how lawmakers have chosen to raise revenue. The House plan caps income tax deductions at 2.5 times the standard deduction. The Senate plan caps mortgage interest deductions and limits charitable contribution deductions to in-state charities.

Shumlin gathered a group of nonprofit leaders on the steps of the State House Wednesday to decry any tinkering with charitable contributions, saying it would cause less giving by Vermonters.

The House GOP caucus voted unanimously to support sustaining a veto after discussing potential pitfalls.

“Is this going to raise his political capital?” asked one member.

“I believe that the governor is doing what our constituents have asked us to do. If that’s the case, why wouldn’t we support it?” Turner countered.

Rep. Kurt Wright of Burlington cautioned the caucus to remember that Shumlin’s original budget proposal raised significantly more in new revenue than the plans passed by both chambers.

“The only thing to keep in mind — the governor didn’t like this tax package, but remember what he started with?” Wright said. “How do you know he doesn’t make a deal with the other side. … He had a larger tax increase on the table to start with.”

In the end, it was an enthusiastic vote in favor of helping Shumlin.

“We all campaigned last year. We all heard the same thing. Everybody in this building heard the same thing. People want their taxes under control. Therefore, if the governor is coming that way I’m more than willing to help him and us do what people asked us to do,” said Rep. Francis “Topper” McFaun, R-Barre Town.

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.

Capitol Beat 4-27-15

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Vermont Press Bureau chief Neal Goswami and VPB reporter Josh O’Gorman talk about the developments last week in the State House, including education, health care, vaccines and gun legislation.

Capitol Beat with the Governor 4-24-15

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Gov. Peter Shumlin and Vermont Press Bureau chief Neal Goswami discuss competing health care plans, the governor’s intention to sign gun legislation and the merits of lowering the state’s sales tax by expanding it to services.