Category Archives: State House

Proposed health care bill could see cut in funding

MONTPELIER — Lawmakers are considering a scaled-back health care bill that strips out a proposed payroll tax.

The House and Ways Committee is looking to fund a proposed health care bill with $20 million in revenue, a far cry from the $52 million in revenue proposed by the House Health Care Committee.

“I think it’s safe to say that the figure we come up with will be less than the figure the Health Care Committee came up with,” said Ways and Means Chairwoman Janet Ancel, D-Calais. “If that’s true, we’re going to ask the Health Care Committee to reorder its priorities to decide how best to spend it.”

Earlier this month, the House Health Care Committee approved a bill that included a 0.3-percent payroll tax, as well as a 2-cents-an-ounce tax on sugar-sweetened beverages, which, together, would generate $52 million in revenue.

The bill itself was borne out of a proposal from Gov. Peter Shumlin, who proposed implementing a 0.7-percent payroll tax to close the gap between how much Medicaid reimburses doctors for services and how much those doctors charge private insurers. Shumlin argues that boosting the amount paid by Medicaid will result in lower premiums for individuals with private insurance.

Shumlin’s proposal came after his decision in December to — either permanently or for the moment — shelve his single-payer health care plan.

“We’ve been looking at the bill that the House Health Care Committee voted out, both looking at the spending part and looking at how the revenue will be raised, and I think there is, just speaking for myself, there are initiatives in the bill that I would like to be able to accomplish,” Ancel said. “Certainly, the investment in the cost sharing, the increased reimbursement for primary care, are things that the heath care bill attempts to put in place. The challenge, always, is how do we raise revenue for it?”

Wednesday afternoon, House Health Care Committee members discussed proposals that would reduce the amount of money to address the so-called “Medicaid shift” that would close the reimbursement rate gap between Medicaid and private insurers.

Rep. George Till, D-Jericho, proposed amending the bill from House Health Care that would do away with the payroll tax altogether, and would impose a 0.75-cents-an-ounce tax on sugar-sweetened drinks. Till also proposed eliminating the exemption for candy from sales tax.

Rep. James Masland, D-Thetford Center, said that reducing the sugar-sweetened beverage tax to 0.5 cents an ounce could still raise $20 million.

Rep. Alison Clarkson, D-Woodstock, said the direction the committee will take on the bill is still very much up in the air.

“There are three questions before this committee: Do we want to spend money on health care? How much do we want to spend? And, if we want to spend money, how do we want to raise it?” said Clarkson, who later said she supported the $20 million figure.

Ancel said that, should her committee decide to reduce the amount of revenue as proposed, it would be up to the House Health Care Committee to decide how that money should be spent.

The House Ways and Means Committee is expected to take up the health care bill Thursday.

Speaker’s group pitches economic development ideas

MONTPELIER — An ad hoc economic development group created by House Speaker Shap Smith earlier this year presented an economic development plan to lawmakers Tuesday, some of which could be acted upon this year, according to Smith.

The Economic Development Proposal Review Group, comprised of people from across the political spectrum, was created by Smith to help review ideas submitted by the public. Smith called on the public to submit economic development proposals early in the legislative session. The group reviewed about 90 proposals and crafted a report for lawmakers based on those ideas.

Paul Ralston

Paul Ralston

Vermont Coffee founder and former Democratic lawmaker Paul Ralston served as the group’s leader, facilitating meetings over a three week period. He told the House Commerce and Economic Development Committee Tuesday that economic development in the state will require changing the conversation.

“It’s time for our government to stop talking about huge programs that cost a lot of money that don’t work. It’s time for our government to stop talking how old we’re getting in Vermont and how young people don’t want to live here in Vermont. It’s time to change that story and the story can be changed by taking action,” he said.

Ralston said several ideas could be acted on this session, including passing legislation to clarify that the state’s sales tax does not apply to remotely accessed software, commonly referred to as the cloud tax. In addition, lawmakers this year could:

— Enact an employee relocation income tax credit
— Restore a research and development tax credit
— Repeal or “substantially” reform the licensed lender law
— Develop a process to simplify and strengthen the Vermont Economic Growth Incentive program to work for more employers

Other ideas in the report the group believes could be passed this biennium include examining benefit cliffs in the state’s social assistance programs and reforming the Earned Income Tax Credit to “mitigate financial penalties from work.” The group also suggested mapping all workforce development programs across state government and creating a single budget for them.

The group also wants to increase access to capital by creating a regulatory framework that encourages crowd funding. The state could also offer loan guarantees to support private sector funding for “essential business infrastructure” like telecom projects.

The group recommended permit reforms that “constructively reduce cost and time.” Some reforms could also speed up construction of workforce housing through downtown construction tax credits and faster permitting for housing projects.

Long-term ideas the Legislature should consider include revisiting recommendations made by a Blue Ribbon Tax Commission in 2010. The group suggested a carbon-based tax that is revenue neutral by using it to replace the corporate income tax, creating a seed capital fund, targeting tax incentives for young entrepreneurs, creating a “Vermont embassy” in area cities like Montreal, New York and Boston and enhancing the state’s public transportation system.

Ralston said the group’s recommendations “disproportionately landed on tax credits” because members were concerned that lawmakers would not be willing to appropriate funds in a tough budget year.

Smith made a rare appearance before a legislative committee Tuesday to tout the report and encourage lawmakers to act.

House Speaker Shap Smith speaks to the House Commerce and Economic Development Committee Tuesday.

House Speaker Shap Smith speaks to the House Commerce and Economic Development Committee Tuesday.

“Not surprisingly, a number of them cost money and involve tax credits and direct investments. But there are a number of them that don’t cost money and I think we could move forward with them this year,” Smith told the Commerce and Economic Development Committee.

The speaker cited the employee relocation tax credit as a way to attract younger workers to the state for jobs that employers have had difficulty filling.

“I’ve never been a huge fan of tax credits, but I think the employee relocation tax credit that they’ve identified is a very intriguing idea and could be a tool that could be used by businesses,” he said.

Smith said he believes Vermont is an attractive place for business, but the recommendations in the group’s report could improve the business climate.

“I think that we can make it an even better place,” he said. “I’m hopeful that there will be some ideas here that you can work with and will be put into law by the end of the year.”

neal.goswami@timesargus.com

Read the group’s report below:

Read the economic development ideas submitted by the public to House Speaker Shap Smith below:

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

House budget plan becoming more clear

MONTPELIER — The House’s path to closing the state’s $113 million budget gap is becoming more clear after a new framework was revealed Friday by House Appropriations Committee Chairwoman Mitzi Johnson.

Johnson, D-South Hero, in her first year leading Appropriations, unveiled her own budget proposal the committee will use to finalize its 2016 fiscal year spending plan. It incorporates many of Gov. Peter Shumlin’s ideas to close the original $94 million hole the state faced in January, and incorporates new ideas for the additional $18.6 million needed after a revenue downgrade in late January.

Rep. Mitzi Johnson

Rep. Mitzi Johnson

Some of Johnson’s ideas are taken from a list of potential cuts totaling $29 million that lawmakers crafted with the Shumlin administration. House Speaker Shap Smith, D-Morrisville, said Monday that list of potential cuts “is appropriate to use” to close the gap.

Among the cuts used by Johnson in her budget proposal are:

— $5 million reduction for Vermont Health Connect, including subsidies
— Eliminating a $6 million state contribution to the Low Income Home Energy Assistance Program
— Closing the Southeast State Correctional Facility in Windsor, for a $820,000 savings in both the 2016 and 2017 fiscal years
— A $1 million reduction in funding for the Vermont Veterans Home
— A $1 million reduction in funding for the Department of Information and Innovation
— A $560,000 reduction in funding for Vermont PBS split over the next two years

In total, Johnson’s proposal makes about $57 million in general fund cuts. It would incorporate $10.8 million labor savings the administration is seeking from state employees and also consolidate four emergency dispatch centers down to two.

Johnson’s proposal would utilize more than $20 million one-time or short-term funding sources. About $5 million in reserve funds would be tapped to help close the gap. It also would shift $4.8 million in spending for the Vermont Housing and Conservation Board to the capital bill to be raised through bonds. Another $1.7 million would be generated by leasing prison beds to the U.S. Marshal Service.

Whatever proposal the Appropriations Committee settles on will be paired with a revenue package fine-tuned by the House Ways and Means Committee. Smith, D-Morrisville, said the House will likely move forward with a revenue package of $35 million.

It will include, Smith said, a Shumlin proposal to eliminate the ability to deduct the previous year’s state and local taxes for taxpayers who itemize deductions. That will generate an additional $15 million tax revenue.

House Speaker Shap Smith

House Speaker Shap Smith

The House will look to also cap the amount of all itemized deductions at 2.5 times the standard deduction, according to Smith. That will raise about $18 million in additional revenue. Another $2 million in a separate fee bill will generate the remaining revenue to help balance the general fund.

Smith said he supports the framework of Johnson’s proposal which will help the committee finalize its plan this week, including the use of reserve funds.

“I do think that the framework that she’s put forward, it works. I think we both have been trying to figure out ways to bring down the amount of one-time money that is used, recognizing that next year could be difficult as well. At this point in time, I think she’s done about as good of a job as she can limiting the use one-time money,” he said. “I think it is appropriate to use (reserve funds) given the challenge that we face as long as we’re thinking strategically how we might replace it … in outgoing years.”

Smith and other House leaders are still planning to finalize a budget plan this week, but additional time will be taken if needed, he said.

“My view is that if something comes up I’d rather get it right than get it done fast. I think that we’re on target right now for the completion of the budget by the end of the week with consideration of the full House next week,” Smith said.

neal.goswami@timesargus.com

Read Johnson’s budget outline below:

Tax code changes eyed to balance budget

MONTPELIER — The 2016 fiscal year state budget the House considers is likely to include $35 million in new revenue raised through changes in the tax code, according to House Speaker Shap Smith.

That amount is consistent with what Gov. Peter Shumlin recommended in his budget, which was presented to lawmakers in January, the Democratic speaker said in an interview Thursday. But the House plan will likely also look to cap itemized tax deductions to raise additional tax revenue from wealthier Vermonters, he said.

“The governor’s original budget relied on $35 million of new revenue and we are looking at that amount of revenue to balance the budget that the governor presented, as well as the additional … $18 million that was necessitated by the revenue downgrade. We’re continuing to rely on the need to raise $35 million in new revenue,” Smith said.

The 2016 fiscal year budget has a current hole of about $113 million. After raising $35 million revenue, lawmakers will need to make about $78 million in cuts.

House Speaker Shap Smith

House Speaker Shap Smith

The House, Smith said, will use the governor’s proposal to eliminate a current policy that allows taxpayers who itemize deductions to deduct their previous year’s state and local tax liability from their taxable income. But the House will look to go even further and cap all itemized deductions at two-and-a-half times the standard deduction. For a couple filing jointly that would be about $31,000.

Those two measures would raise $32.4 million, Sara Teachout, a fiscal analyst with the Joint Fiscal Office, told the House Ways and Means Committee Thursday. Revenue included in a fee bill makes up the additional general fund revenue needed to hit the $35 million target.

Smith said he did not want to commit to that plan before the committee fully considers it, but said he supports it.

“I think that given the reductions that we’re making in the budget and the fact that it largely impacts people at the lower end of the income ladder that it’s fair to ask those at the upper end of the income ladder to pitch in to solve the problem, and through capping the itemized deductions I think we could do that,” he said.

According to Teachout, Vermonters earning $75,000 or less would chip in an additional $3.91 million under the proposal. Vermonters earning $75,000 or more would contribute an additional $28.48 million in tax revenue.

According to data Teachout provided the Ways and Means Committee Thursday, about 84,000 of Vermont’s 310,389 tax filers would see a tax increase. But the increases would be minimal for low- and middle-income Vermonters. People earning $75,000 or less would see their tax bills rise by $144 or less, on average. The state’s 355 filers earning $1 million or more would see an average tax increase of $18,603.

Smith said limiting deductions will put Vermont more in line with tax policy in most states.

“They often times don’t allow the itemized deductions that we do. I think it moves us closer to what other states do,” he said.

Exactly where the House will look to make budget cuts is still evolving, Smith said. However, some of Shumlin’s recommendations are likely to be used, including cuts to the state’s assistance program known as Reach Up and to the Low Income Home Energy Assistance Program and through the consolidation of emergency dispatch centers.

The House will also look to include $10.8 million in labor savings from the state’s work force, according to Smith.

“Under any circumstance in balancing this budget it’s going to require some labor savings,” he said.

The administration ratcheted up pressure on the Vermont State Employees Association this week in its effort to obtain the labor savings by requesting that agencies and departments identify up to 325 positions to be cut. The administration has asked the union to reopen its contract to negotiate the savings without job cuts, but the union has so far refused to do so.

Meanwhile, the House Appropriations Committee held a public hearing Thursday on a list of potential cuts totaling $29 million. The list features a range of ideas, but most would not provide immediate savings for the 2016 fiscal year, Smith said. Many of those ideas could be used to address future budget gaps, including in 2017, which faces a shortfall of about $45 million.

Smith said the Appropriations Committee, led by Chairwoman Mitzi Johnson, D-South Hero, will use the list as needed.

“I really do have confidence that that committee will make the right recommendations that need to be done to balance the budget. I really rely heavily … on that committee to make the right decisions,” he said.

The final House plan must pass muster with both the administration and the Senate. Smith said there are ongoing conversations with both, but areas of disagreement will be addressed when the Senate considers the House version.

“I don’t think that we have identified, sort of, the areas of tension yet. I don’t think we’ll have a good sense of that until it gets over to the Senate,” he said.

neal.goswami@timesargus.com

Agency of Education questions consolidation proposal

MONTPELIER — The Agency of Education does not support portions of a bill that seeks to consolidate the state’s school districts.

The House Ways and Means Committee took testimony Tuesday afternoon from Education Secretary Rebecca Holcombe on a bill that seeks to create school districts with at least 1,100 students that offer pre-kindergarten through 12th grade education by the year 2020.

Holcombe, who says studies show the optimal size for a school district is 1,500 students, is a supporter of creating larger districts, with the goals of reducing costs through efficiency and improving student access to educational opportunities by sharing staff across a larger district.

“You are asking people to think of their communities as bigger than their town borders,” Holcombe told the committee. “The bill encourages districts to sit down and look around locally and see who you might want to partner with.”

The 51-page bill includes tax incentives to encourage districts to consolidate on their own, while giving authority to the Agency of Education to consolidate districts that do not do so. But Holcombe said the final authority to consolidate districts that are unwilling or unable to do so on their own should rest elsewhere.

“The authority to assign districts should not rest with one person,” said Holcombe, who suggested the authority should be given to the State Board of Education or another body and should include an appeal process.

The bill also contains a provision to cap the annual increase in education spending for a district at 2 percent. Any budget that comes in with an increase higher than 2 percent would be considered a failed budget.

Holcombe noted that the average increase among education budgets up for vote at town meetings last week was 2.89 percent. Of the 255 budgets, only 106 would have made it under the cap, while 149 would have been considered failed before they ever went to a vote of the people.

Holcombe said the bill would also prevent a school district from seeking a short-term line of credit, even in the event of emergency or disaster.
“If something happens in the middle of the year, a roof collapses or they have a flood in the basement, they need the discretion to be able to address those issues,” she told the lawmakers.

Holcombe said her agency would not support a provision in the bill that would require the agency to review and evaluate the laws surrounding collective bargaining agreements between teachers and school districts.

“Neither the secretary nor any staff at the agency is involved with or equipped to evaluate collective bargaining laws,” said Holcombe in written testimony submitted to the committee. “This is not an aspect of school operations that falls under the purview of the agency, and would be better suited to be dealt with by labor law experts, not education experts. This is an employment issue.”

The bill also proposes to restrict — with exceptions — tuition payments to schools outside Vermont, which would reduce out-of-state tuition payments from $5.7 million to $1.7 million.

Holcombe called the issue a red herring, saying Vermont benefits from receiving students from other states and that such a move might invite retaliatory action from those states, which might decide not to tuition their students to schools in Vermont.

 

Paid sick leave bill languishes in committee

MONTPELIER — With two weeks to go before the Legislature’s crossover deadline, a House bill that would mandate paid sick leave for employers remains on the back burner without any immediate plan to consider it.

Rep. Tristan Toleno, D-Brattleboro, introduced legislation that would require employers to allow workers to accrue paid sick time. It was touted by Toleno and advocates as a compromise compared to a Senate version that did not include some of the transition measures in the House bill.

Toleno’s bill establishes a standard of paid leave workers can earn, but includes a 500-hour waiting period for employees before the benefit kicks in. That amounts to about three months of full-time work. It also phases in the benefit at a slower rate than previous legislative efforts, allowing employees to earn up to three days of sick time in the first two years, increasing to five days after that.

The idea of mandating that businesses allow workers to accrue paid sick time has had trouble gaining traction with lawmakers in recent years. Many have been reluctant to foist a new burden on Vermont’s small businesses. Advocates were hopeful that Toleno’s bill would ease opposition from the business community.

Rep. Helen Head

Rep. Helen Head

But it continues to languish in the House General, Housing and Military Affairs Committee. It’s chairwoman, Rep. Helen Head, D-South Burlington, said it’s unclear if it will be taken up.

“There’s been no decision made about that,” she said.

In order for the bill to advance this year it will need to clear the House by the March 13 crossover deadline. With lawmakers on a week-long break next week for Town Meeting day, time is rapidly ticking away. And at the moment, there is no plan to take it up after the break.

“It’s not on our schedule for the week after break,” Head said. “I know that there are a lot of people that have interest in it in the building that are talking to me and various other committee members.”

Head said she will poll members of her committee before deciding what to do.

“I get input from each of the members both individually and sometimes as a group as well, and I also hear from members outside the committee as well,” she said. “I think that the stakeholders that are in favor of it appear to be broader and stronger than they have been in previous years.”

Toleno said he remains hopeful that the committee will consider the legislation. So far, he said legislative leaders and Head have made a “pragmatic choice” to focus on big picture issues like the budget.

“I think that people who’ve been here for a while are thinking that the particular challenges that are involved in trying to shift a structural deficit in the budget are forcing some pretty deep work and some deep rethinking and it’s just taking up the bandwidth,” he said. “We’re sort of in a phase now where that work is coming to a head and maybe there will be some space in the near term for people to really look out and see what else is on the landscape.”

Rep. Tristan Toleno

Rep. Tristan Toleno

Toleno said he and advocates who support the bill are still working to advance the bill.

“Whether it will move forward is out of may hands,” he said. “I am actively encouraging my party’s leadership and the committee’s leadership to find a path forward for the bill. I think there is strong interest in the building and outside the building for a conversation about what a pragmatic middle ground looks like.”

Still, Toleno said he acknowledges the challenges.

“Making crossover seems hard at this point considering they haven’t had the testimony, so I wouldn’t expect … that to suddenly materialize. I would welcome it if it did, but we’ll see what happens,” he said.

neal.goswami@timesargus.com

House committees compete for gas tax revenue

MONTPELIER — The House Transportation Committee is in a holding pattern as it tries to figure out how to deal with declining revenues in a gas tax based on the price of the fuel.

Members discussed various ways to deal with a $6.6 million gap facing the transportation fund Wednesday, including adjusting the Transportation Infrastructure Bond Fund, or TIB, to help bring in more revenue. Committee Chairman Rep. Patrick Brennan, R-Colchester, said the fund, launched in 2009, is bringing in less revenue as prices at the pump fall.

The fund is filled with a 2 percent assessment on the retail price of gasoline and a 3 cent per gallon assessment on diesel fuel. Brennan said those rates worked well when the fund was launched and gasoline was more than $3.80 per gallon. The average price of gasoline per gallon in Vermont is now $2.40.

Rep. Patrick Brennan

Rep. Patrick Brennan

“We’re not doing that well,” Brennan said. “The whole hole we’re facing right here, $6.6 million, is from the TIB.”

The $6.6 million projected shortfall was based on a gasoline price of $2.80 per gallon, however, so the gap is expected to grow.

“I would guess we’ll be up to ($8 million) by the time the next revenue forecast comes out,” Brennan said.

Adjusting the TIB would close the gap, but Brennan said the committee is essentially paralyzed until it is determined how a water quality bill out of the House Fish and Wildlife Committee will be funded. If it is partially funded by a 2 cent per gallon increase in the state’s regular gasoline tax, which typically only funds transportation costs, then the House Transportation Committee will likely scrap any plan to raise revenue through the TIB.

“They’ve got a big water quality bill that the governor has touted and now they’re implementing it and trying to find funding for it to the tune of $14 million,” he said. “They put the 2 cents in there.”

The 2 cent per gallon increase Fish and Wildlife may seek would raise $6.3 million. But that would effectively kill any political will to raise additional funds through the TIB, according to Brennan.

“I’m not raising two gas taxes in the same year,” he said. “There’s no appetite.”

In that case, the Transportation Committee will look to make cuts to transportation projects.

“If that flies, there’s no way we’re even going to talk about it in here,” Brennan told the committee. “These cuts will be real. It will be a fact of life at that point.”

Committee Vice Chairman Rep. David Potter, D-North Clarendon, said the committee will eventually need to address a long-term problem if gas prices remain low.

“The way I see it it’s a festering sore that doesn’t go away. We’re going to do this exercise into the future,” Potter said. “It’s not a popular thing but it’s the right thing to do to maintain our infrastructure.”

Rep. Herb Russell, D-Rutland, said the committee, if it seeks more revenue through the TIB, would be asking Vermonters to pay back a small amount of the savings they’ve seen at the pump.

“Perfect time to sell it. I don’t have any problem with it,” he said.

For now, however, the committee plans to wait and see if the water quality bill will seek funding through the gas tax.

“I think we’re in a wait and see mode,” said Rep. Timothy Corcoran II, D-Bennington, the committees ranking member. “We’ve got to see how it plays out.”

neal.goswami@timesargus.com

Capitol Beat: Press Bureau talks education with Jill Remick

Capitol Beat

Neal Goswami and Josh O’Gorman talk education with Jill Remick of the Agency Education. The legislature is considering several aspects of education reform, primarily changes to educational districts, and Remick, the agency’s  director of communications and legislative affairs, speaks about existing local consolidation efforts, potential changes to the law, and the goals of the Agency of Education.

 

House advances annual budget adjustment

MONTPELIER — The Vermont House gave preliminary approval by voice vote Thursday to the annual budget adjustment bill, which will lower state spending in the current fiscal year by $12 million.

The reduction in spending is needed following a revenue forecast delivered by state economists last week that projects lower revenues than initially thought. In fact, the current, 2015 fiscal year budget is has seen a downgrade of more than $41 million since January 2014 — a 2.8 percent reduction in funds available to support government operations.

The budget adjustment, unanimously approved by the House Appropriations Committee Monday, uses $10 million in spending reductions to cover the downgrade and sets aside $2 million for use in balancing the 2016 fiscal year budget. It brings available revenue in line with spending, and sets 2015 fiscal year spending less than 1.5 percent more than the previous year, said House Appropriations Committee Chairwoman Mitzi Johnson, D-South Hero.

“This budget brings general fund growth to under what average growth in the economy is,” she said.

Rep. Mitzi Johnson

Rep. Mitzi Johnson

The plan approved by the Appropriations Committee covers increased costs for Vermont Health Connect, the state’s online health insurance marketplace. Overall spending on the exchange is rising by $28.3 million, including $14.6 million in state funds, according to Finance Commissioner James Reardon. It is the first time state funds are being used for operations related to the exchange.

The budget adjustment also includes $2.15 million in additional funds for the Vermont Veterans Home in Bennington. And, it funds 110 new opiate treatment slots in Bennington County, which will free up space in Rutland County.

“Though overall spending is down, we were able to make some investments,” Johnson said.

There are several large reductions, too, including $ 1 million in the Low-Income Home Energy Assistance Program, $437,000 in mental health housing vouchers and $224,000 in cuts to the Judiciary, which is expected to decrease the availability of judges.

Johnson said a plan to cut $500,000 from the Judiciary presented by Gov. Peter Shumlin was scaled back. Instead, the committee sent a letter to the Judiciary asking officials to find ways to cut costs without diminishing services or slowing justice.

Floor action on the bill came to a grinding halt Thursday afternoon when Rep, Mary Morrissey, R-Bennington, sought to introduce an amendment seeking greater transparency in exchange spending. Republicans said the amendment was triggered because of new state spending on the exchange.

House Speaker Shap Smith called for a recess to allow the Appropriations and Health Care Committees to review the amendment and provide time for the parties to caucus.

Rep. Mary Morrissey

Rep. Mary Morrissey

Morrissey’s amendment called for halting the expenditure of funds included in the budget adjustment for VHC unless Lawrence Miller, the governor’s chief of health care reform, provides lawmakers with:

— A full accounting of the state and federal expenditures through 2014 for development and implementation of the exchange
— Projected remaining development and implementation of the exchange through 2015
— Remaining balance of any federal grants awarded to the state for development and implementation of the exchange
— Projected expenditures for fiscal years 2015 and 2016 for the operation of the exchange by funding source and department

House Minority Leader Don Turner, R-Milton, said the amendment will force the administration to become more transparent and will provide information to lawmakers that so far has not been forthcoming.

“I think it’s a very good one if you believe in transparent government,” he said.

The Appropriations Committee substituted its own version of the amendment, essentially stripping Morrissey’s fingerprints from the process. The Democratic version, which was approved by the House on a voice vote, removed the threat of halting spending.

“We’re prepared to take action should we not receive satisfactory information,” Johnson said in an effort to placate discontent among Republicans.

The House later agreed to add the amendment to the budget adjustment on a 135 to 0 roll call vote. Democrats said they have already asked the administration for the data sought in the amendment and have already received most of it.

Morrissey said she is “appreciative” that the Democratic majority choice “to copy” her amendment.

neal.goswami@timesargus.com

House advances microbead ban

MONTPELIER — The Vermont House passed a bill Tuesday to ban microbeads in beauty products that have been found to cause harm to fish and other wildlife.

The House gave preliminary approval to H.4 with a unanimous voice vote. It was passed unanimously by the House Fish and Wildlife Committee on Friday.

The legislation, first brought to the attention of the House Fish and Wildlife Committee by Rep. Patti Komline, R-Dorset, has broad support across the political spectrum.

The small, plastic beads typically end up in the state’s waterways because they are too small to be filtered out at water treatment plants. The beads, which are found in thousands of personal care products, absorb toxic chemicals and can cause harm to fish and other animals that consume them.

Rep. David Deen speaks at a news conference Tuesday in support of banning microbeads in personal care products.

Rep. David Deen speaks at a news conference Tuesday in support of banning microbeads in personal care products.

“Vermonters do not need these tiny, plastic beads in their soap. They especially don’t need them if they are harming our aquatic life and threatening our waterways,” Taylor Johnson, an environmental advocate with VPIRG, said in a news conference ahead of Tuesday’s vote.

The bill would ban the manufacturing of the microbeads in Vermont on Jan. 1, 2017, and ban the sale of them on Jan. 1, 2018.

Advocates of the bill say there are several natural and biodegradable alternatives to plastic microbes on the market. Some major companies have already begun switching to those natural alternatives.

House Fish and Wildlife Committee Chairman Rep. David Deen, D-Putney, said banning microbeads is the first of many water quality bills the committee will advance this year.

“This is the first step in what’s going to be the year of water,” he said.

Browning files public records request bill

MONTPELIER — A lawmaker who sued Gov. Peter Shumlin for documents related to his now-shelved single payer health care proposal has introduced legislation that would require the documents to be revealed in the future in similar situations.

Rep. Cynthia Browning, D-Arlington, plans to introduce a bill to require greater access to public records under certain conditions and require judicial rulings on appeals of denials of access within a certain period of time. Browning said the legislation is needed based on her own legal case against the governor.

Browning, though she lost her case in superior court, maintains the administration inappropriately used executive privilege to prevent the release of information prior to his announcement on Dec. 17 that he was no longer pursuing a universal, publicly financed health care system because of its cost.

Rep. Cynthia Browning

Rep. Cynthia Browning

“My understanding is that executive privilege is intended to serve the public by ensuring that government officials can have thorough and confidential discussions of policy alternatives. It is not intended to protect those officials from inconvenience or embarrassment. If a person
claims to believe in the principles of transparency and accountability they must uphold them when it is hard as well as when it is easy,” Browning said in a release Friday. “I think that in this case executive privilege was used to conceal the politically difficult facts related to how much the single payer plan might cost and how much taxes might have to increase to
finance it. Ironically, this concealment did not serve the Governor well politically with either supporters or skeptics of the plan.”

Browning’s bill contains several provisions, including:

— If reports or documents have been shared by executive branch staff with people who are not part of that branch or working for it outside of the presence of the governor, executive privilege would be waived.

— If an official or public agency is required by law to produce a report on a date certain and it is not produced it and the law is not amended to extend the date, any records related to that report cannot be covered by executive privilege.

— If a public records request is denied by the government a Vermonter can appeal that denial to Superior Court. The current statute requires that such an appeal receive a judicial ruling “expeditiously,” and that such dockets should be handled before other cases, but the word
“expeditious” is not given a time definition. The bill would define “expeditious” as 45 calendar days after the last brief filed by the complainant.

Browning said the Shumlin administration shared documents and reports with some legislators, including House Speaker Shap Smith when the governor was not present and still claimed executive privilege. She argues that executive privilege should not be extended to a separate branch of government.

Shumlin, according to Act 48, was originally supposed to release a financing plan for his health care plan in January 2013 but did not. Browning said the Legislature did nothing to enforce that deadline and the administration was allowed to withhold information. Browning filed a public records request to the administration in March 2014 seeking documents and reports. The Legislature did not act to extend the governor’s deadline in law until May 2014, she said.

Browning said Vermonters should be able to obtain materials when a report is overdue, even when the Legislature does not try to enforce the law.

The 45-day timeline for judicial rulings is needed to speed up the process of records request, Browning said. She filed her case on Sept. 4, 2014, but the judge did not issue a ruling until Dec. 10 — a span of 14 weeks. Browning said the length “does not meet a common sense definition of expeditious.”

Read the proposed legislation below:

New law proposed to aid investigations of gasoline price fixing

MONTPELIER — Lawmakers will consider a bill to collect data to see if drivers are facing price fixing at the gas pump.

Rep. Christopher Pearson, P-Burlington, will introduce a bill that would require gas distributors to disclose how much fuel they deliver to a filling station.
The effort comes as his region continues to see some of the highest gas prices in the state, and provides some of the highest profit margins of any region in the United States.

“This is not an outlier phenomenon,” Pearson said. “When you start digging into it, you see something is going on.”

Pearson’s remarks came Thursday evening during a joint session of the House Transportation and Commerce Committees.

According to Pearson, his bill would provide the Attorney General’s Office with data that could be used to investigate accusations of price collusion. The bill also includes a whistle-blower provision that would allow a person who reports price fixing to have a share of any fines and financial penalties collected.

Assistant Attorney General Ryan Kriger noted there is a big difference between price fixing — which is illegal — and “price following,” which is legal and is common in many industries.

“What’s happening in Burlington alone might not be enough to go forward with a charge of conspiracy,” Kriger said. “Looking at a competitor’s sign is legal, but talking with them about prices is not.”

The hearing comes on the heels of a massive drop in the price of gasoline in Vermont and across the country. According to Gas Buddy, a website that tracks gas prices, during the past six months, the average price for a gallon of gas in Vermont has fallen from $3.70 to $2.41.

Vermont is host to a wide gulf in gas prices, which range from $2.10 a gallon in Bellows Falls to $2.79 in Bridgewater Corners. Looking around the state, geographical trends emerge.

When looking at the 15 locations with the cheapest gas, 12 are in towns along the Vermont-New Hampshire border. When looking at the top-15 most-expensive locations, eight are located in Chittenden County, three are in Washington County — in Moretown, Waitsfield and Warren — and one location, in Killington, is in Rutland County.

Pearson said the recent drop in gas prices have distracted people from the fact they are still paying too much. Vermont’s average price is 37 cents higher than the national average, and is the highest in New England.

Only four states — Alaska, California, Hawaii and New York — have average prices per gallon that are higher than Vermont.

“Gas prices across the country have come way down around the country, but the fall in Vermont has been relative. Don’t be fooled by the low prices at the pump right now,” Pearson said.

Ben Brockwell is the director of data and pricing for Oil Price Information Service. According to Brockwell, at 66 percent, “the Burlington market has been among the most profitable in the nation.”

Jim Harrison, president of the Vermont Retailers and Grocers Association, noted that, per capita, Vermont convenience stores see a volume of customers that is much lower than the national average.

“Our stores have less volume, on average, to spread out their fixed costs,” Harrison said. “Property taxes don’t change because you’re selling fewer gallons per customer.”

Harrison noted existing laws on the books that allow for the prosecution of price fixing and protect whistle-blowers, and opposed the notion of offering whistle-blowers financial rewards.

Some lawmakers suggested that the wide range in gas prices in the state is a result of several factors. Rep. Timothy Corcoran, D-Bennington, suggested higher prices in and around Burlington might be a function of real estate prices in the area.

Rep. Loren Shaw, R-Derby, suggested filling station owners in the Burlington area pay higher taxes than those in other parts of the state. He also expressed his skepticism of a bill that would add more business regulations.

“The free enterprise system is what built this country and built this state,” Shaw said. “If there’s price fixing going on, that’s a different story.”

josh.ogorman@rutlandherald.com

House members pitch new exchange proposal

MONTPELIER — A bipartisan group of House members are pushing a new proposal to move the state away from Vermont Health Connect, but the consequences remain unclear if the state were to adopt the proposal.

On Thursday, Reps. Patti Komline, R-Dorset, Heidi Scheuermann, R-Stowe, Jim Condon D-Colchester, and Adam Greshin, I-Warren, called for the state to transition from Vermont Health Connect to a Supported State-Based Marketplace Exchange. Oregon and Nevada have adopted the hybrid state-federal model after their state-based exchanges faced significant problems.

Vermont’s exchange, which also experienced significant tech challenges and is still not fully functional, allows some individuals to sign up for insurance plans through the website. But other individuals and all small businesses are enrolling through a paper process. And users cannot currently make changes to their information online in an automated way.

Rep. Patti Komline

Rep. Patti Komline

Komline said by adopting the model used by other states the state could shed its IT woes while maintaining control of the plans offered, and without losing the ability to provide federal and state subsidies to help make insurance more affordable to Vermont residents.

“We can control the plans that we’re offering, but when it comes to handling the IT, we can call on healthcare.gov to do that,” she said. “The transition costs for Oregon was $7 million. They were able to use the grant money from the feds. It took them six months to make that transition and so far it’s gone very smoothly for them.”

“It’s a viable alternative. We’re not just playing political games with it, but it’s something that we can really do,” Komline added.

Condon said his goal is to provide Vermonters with a fully functioning insurance marketplace.

“Vermonters deserve a functioning insurance portal. They don’t have that yet, but citizens deserve the ability to be able to go online and get their business done and take care of this. It’s just not happening as well as it should be,” he said. “My own personal opinion is that we should have gone the fed way to begin with. I think it would have saved a lot of hassles.”

The federal government is not charging Oregon and Nevada, at least for 2015, for the use of the federal site. But, it could begin charging them 3.5 percent of the cost of premiums as it does for other states that fully use the federal exchange. With Vermont’s $200 million in premium spending, that would mean a $7 million tax for Vermonters in total.

Previous opposition to moving to the federal exchange included the likely scenario that Vermont would not longer be able to provide state-level subsidies, among other reasons. Massachusetts is the only other state to do so, and it is not clear if CMS would allow that to continue.

“A key point is that we keep our subsidies with this,” Komline told reporters Thursday. “The officials in Oregon and New Mexico and in Nevada are all saying that they’re covered. That they’re subsidies are fully covered.

But the Centers for Medicaid and Medicare, which oversees state and federal exchanges, has never before considered whether a state could continue to provide state-level subsidies through the hybrid model.

The state expects to spend about $8 million this year on operating the portion of Vermont Health Connect that deals with exchange plans. That cost would be gone under the proposal released Thursday, according to Komline.

But their plan does not address Medicaid, which also flows through the state exchange. Komline said the state’s Medicaid program would continue to be run by the state. Lawrence Miller, Gov. Peter Shumlin’s chief of health care reform, said Vermont Health Connect would continue to be needed and built out in order for the state to effectively manage the Medicaid program.

There would still be a savings to the state, Komline insisted.

And Scheuermann said state officials would work with the federal government to answer questions that remain unknown.

“These are the questions that we do want answered and we want to work with. But this is relatively new,” Scheuermann said. “We want to work with the feds to do that, both with regard to Medicaid and with regard to the state subsidies.”

Lawrence Miller

Lawrence Miller

Miller acknowledged Thursday that Vermont Health Connect’s “current operations are unacceptable.” But he said many of the functions needed for the state’s Medicaid program are also needed for the part of the exchange the proposal revealed Thursday would jettison to the federal site.

“It’s a viable alternative to the qualified health plan component. The concern, of course, is that Vermont Health Connect is also the Medicaid eligibility and enrollment engine,” Miller said. “It’s a question of how to accomplish multiple goals most effectively. It certainly address the qualified health plan issue, but the exchange is primarily, by volume and users, Medicaid eligibility and enrollment.”

Miller said the administration has already engaged with CMS in discussions of several options and will continue to explore the best path forward for the state.

“We’ve discussed everything with CMS. Nobody’s particular happy with where we are,” he said.

The legislation proposed Thursday calls for the administration to have a transition plan ready by March 31. Miller said the administration will be prepared to offer a formal response if the bill advances.

“We’re not waiting for the Legislature to make a decision about this. If this is passed we would have begun our groundwork well before,” he said.

The so-called change of circumstance function that is still not part of the exchange, which would allow automated changes to be made by users, is on track to be completed in April, according to Miller. He said the state will continue to ask its contractor, Optum, to complete that work. Other recent deadlines have been met by the company, he said.

“I would support continuing to complete the change of circumstance functionality because we need that for the Medicaid … eligibility, anyway. It’s not something we can just stop doing. We don’t have another way of doing Medicaid enrollment or redetermination. That is the path,” Miller said.

neal.goswami@timesargus.com

Read the proposed legislation below:

Family of Vermont hazing, suicide victim backs hazing bill

MONTPELIER, Vt. (AP) — The family of a 17-year old Milton football player who killed himself after being a victim of hazing and sexual assault on the team is pushing for tougher reporting requirements for school officials.

Jordan Preavy’s parents and stepmother traveled to Montpelier on Thursday, more than two years after his death, to watch as the bill was introduced by Rep. Ron Hubert, R-Milton.

Preavy was one of the victims in a hazing scandal that authorities said involved victims being sexually assaulted with a broomstick. The Associated Press generally doesn’t identify sexual assault victims, but Preavy’s parents have spoken about him openly.

His family says school officials weren’t quick enough to report the abuse to law enforcement officials. The bill introduced Thursday would make such notification more automatic.