Category Archives: State House

House advances paid sick leave bill

MONTPELIER — A bill to provide workers with paid sick time cleared the House Wednesday after majority Democrats defeated several attempts by Republicans to delay action on the measure.

After hours of debate, the chamber voted 76 to 66 in favor of providing earned sick time to most employees in Vermont. The bill would allow workers to earn a maximum of three days of paid time during the first two years of employment before increasing to five days. Those benefits would be available to workers after they put in 1,400 hours of work or after a year’s time with a company, whichever comes first.

Under the legislation, workers would be able to take paid time off that they have accrued for sickness, to care for a sick person in their care or even to care for children when there is a snow day at school.

Temporary and seasonal workers are exempt from the new mandate.

Rep. Helen Head

Rep. Helen Head

Rep. Helen Head, chairwoman of the House General, Housing and Military Affairs Committee, told her colleagues the bill would impact an estimated 60,000 workers in Vermont who do not currently have the option of earning paid time off. Similar measures have been introduced in the past but until Wednesday had been unable to clear either the House or Senate.

“This bill has been a decade in the making. The need is clear,” Head said.

Wednesday’s floor vote came after the bill was revived by scaling back its contents. Bill sponsor Rep. Tristan Toleno, D-Brattleboro, said he agreed to sponsor a bill that would be easier for businesses to adhere to. But even his original bill was scaled back by adding in longer waiting periods and limiting the amount of earned time that could accumulate.

Toleno said he was adamant about the bill being universal, however — meaning no special exemptions for small businesses. He said there was no logical place to draw such a line.

Rep. Steven Berry, D-Manchester, said he decided to vote for the bill after hearing that many small businesses would already be compliant with the bill’s requirements.

“I’ve come around 180 degrees in my perspective thanks to listening to people … and understanding exactly what it means to be fair in our state,” he said. “It is a standard to which all businesses should seek to aspire. I am very much for this particular bill.”

Rep. Steven Berry

Rep. Steven Berry

Others were firmly opposed.

Rep. Ronald Hubert, R-Milton, who owns a retail business, said between 10 and 12 “mom and pop stores” are closing every year because of state mandates.

“These are stores that can no longer, as a family business, make it anymore,” he said.

Rep. Butch Shaw, R-Florence, said he supports the concept of paid time off “but not by state mandate.” He also called a potential $5,000 for violating the mandate “unconscionable.”

“This bill may be well intended, but unfortunately, places another unfunded mandate on small businesses,” Shaw said.

Meanwhile, Rep. Cynthia Browning, D-Arlington, said businesses should be able to determine which benefits they offer.

“A business should have the right to operate their business as they see fit. They’re the ones with capital at risk,” she said.

Instead of mandating paid sick time, Browning said the state should create some type of insurance program that would allow the cost to businesses to be mitigated.

House Republicans made three motions during the three hour debate to send the bill to various committees for further review. Each motion was defeated. A fourth motion was made by Rep. Patrick Brennan, R-Colchester, to postpone action for one day until it could be determined how the legislation would impact state highway projects. That, too, was defeated.

Democratic Gov. Peter Shumlin announced last week that he supported the bill. He had resisted efforts to pass similar laws in the past but said the bill passed Wednesday eased his concerns about the impact on businesses.

“Most Vermonters agree that if you’re sick you shouldn’t be faced with the decision to either go to work and put others at risk or miss work, sacrifice your paycheck, and potentially lose your job. Many employers already provide fair earned leave policies. But some do not and that puts many Vermonters in a difficult and unfair situation,” Shumlin said in a statement after Wednesday’s vote. “In the past, I have been skeptical of proposals that did not do enough to recognize the costs and burdens to businesses this legislation might create. This bill addresses those concerns in a balanced and thoughtful way to provide this important benefit to Vermonters.”

Advocates said they will now look to the Senate to pass the bill. That seems unlikely, however, since the bill would first have to make it through the Senate Rules Committee because it did clear the House before the Legislature’s mid-way crossover deadline. The Senate committee is stacked with members who opposed such a law.

Still, Lindsay DesLauriers of the Main Street Alliance, who has lobbied for years for paid sick leave, said she and others will “try everything we can to pass it this year.”

“That would be an incredible turn of events. We see that. We know that. We acknowledge the challenges and we understand them. But, there is momentum around this bill right now. The governor came out for it. The president came out for it. We just had a pretty strong vote in the House,” she said.

The bill is up for final passage in the House on Thursday.

neal.goswami@timesargus.com

Dem leaders look to kill ban on teacher strikes

MONTPELIER — Democratic leaders are maneuvering to amend a bill slated to hit the House floor Wednesday by replacing language that calls for a ban on teacher strikes and the imposition of labor contracts by school boards with a study.

That would significantly weaken the legislation, H.76, that has been pushed heavily by Republican Rep. Kurt Wright of Burlington. Although he has secured a vote on the bill from Democratic leaders, they are now looking to kill off key parts.

In addition to the ban on strikes and contract impositions, it would institute a 1-cent tax rate increase on districts that cannot reach a contract agreement within one year.

Rep. Tim Jerman

Rep. Tim Jerman

House Deputy Assistant Majority Leader Tim Jerman, D- Essex, said Democrats are considering an amendment to be offered on the House floor that would institute a study on whether teacher strikes should be banned.

“We anticipate having an amendment tomorrow that will change that somewhat substantially and be a study looking at the whole issue,” he said. “As of right now that’s what’s on the table.”

Jerman said he believes the Democratic leadership team will secure enough votes to pass an amended bill that will provide “an unfettered study that isn’t biased one way or the other.”

“I think so,” Jerman said. “It’s been a difficult count because the bill keeps changing.”

The bill is getting a floor vote because of commitments made by the leadership team in order to move a larger education bill through the chamber. Wright and others are now working to secure enough votes to maintain the strike ban.

Wright, who plans to hold a news conference about the bill Tuesday morning, said he expects some independents and about 12 to 15 Democrats will join the Republican caucus. It’s unclear whether that coalition can fend off the Democratic leadership’s efforts, though.

“I think that it’s time for us to act. This bill has been around for a long time,” Wright said. “We either want to ban strikes and the imposition of contracts or not.”

Rep. Kurt Wright

Rep. Kurt Wright

House Minority Leader Don Turner said House Republicans will stand together in support of the ban.

“We feel that it’s time to implement the ban on strikes. I think there’s been enough harm over the years, the most recent in South Burlington. It’s time to stop that. Police officers, fire fighters, they’re essential. They can’t strike. I think it’s time in Vermont to put teachers under that same category,” he said.

But he, too, said it is unclear how the House will vote on Wednesday.

“I am very hopeful. I am confident in our caucus and where we’re going to be. The problem is I don’t know what the (Democrats) will be offering up to their members to not vote for it. All we can do is stick together to support this.”

The bill cleared the House Education Committee on a 8 to 3 vote. However, the General, Housing and Military Affairs Committee, which oversees labor issues, rejected the bill on a 5 to 3 vote.

The bill puts the Vermont NEA, which opposes the bill, at odds with the Vermont School Boards Association, which supports it. Gov. Peter Shumlin angered the union last fall when he declared during an ongoing teacher strike in South Burlington that such strikes should be banned.

neal.goswami@timesargus.com

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.

Capitol Beat with the Governor 4-3-15

Play

Gov. Peter Shumlin chats with Vermont Press Bureau chief Neal Goswami about the House’s health care bill. He’s not a fan.

House gives final approval to school district consolidation bill

MONTPELIER — A bill that proposes to merge school districts and potentially cap education spending is on its way to the Senate.

House lawmakers approved a bill Thursday that would create larger school districts — voluntarily or involuntarily — and cap future education spending if it increase more than it did when voters approved their school budgets in March.

The spending cap component of the bill — created through an amendment from Rep. Sarah Buxton, D-Tunbridge, and approved by House lawmakers Wednesday — would trigger a 2-percent spending cap in 2017 and 2018 if the statewide average education spending increase in 2016 exceeds 2.95 percent, the average rate of growth for budgets approved by voters last month.

As they did Wednesday, lawmakers offered a host of amendments to the bill. Rep. Christopher Pearson, P-Burlington, made a motion to reconsider the Buxton amendment.

“Yesterday, we discussed what kind of cap we should have. Today, I want to discuss if we should have a cap,” Pearson said.

Rep. Ann Donahue, R-Northfield, said she supported repealing the spending cap provision because she did not believe its structure would curb education spending.

However, House lawmakers declined to take up the discussion, defeating Pearson’s motion by a vote of 114 to 22.

Rep Curtis McCormack, D-Burlington, made a motion to amend the bill to address the repayment of money to the state following the sale of a school.

Currently, when a school district sells a school for which they received construction aid from the state, the district must reimburse the state for 30 percent of the sale price.

The district merger bill calls for a suspension of that rule, allowing the school district to keep all of the money following the sale of a school. McCormack, whose amendment called for the preservation of the current law regarding repayment to the state, argued that such a provision could motivate districts to close and sell off their schools.

“I would suggest that this amendment does not unravel this bill, but rather, restores the integrity of this bill,” McCormack said. “This way, you will not have an incentive to close small schools.”

Rep, David Sharpe, D-Bristol, who chairs the House Education Committee, argued that exempting a school district from having to repay the state for construction aid will benefit the community where the school is located.

“If this small piece allows a school to become an economic driver … then we shouldn’t take away that piece,” Sharpe said.

Lawmakers defeated McCormack’s amendment.

The most radical amendment of the day came from Rep. Heidi Scheuermann, R-Stowe, who called on lawmakers to scrap the entire bill and study the feasibility of her long-offered plan to overhaul education governance.

For the past seven years, Scheuermann has proposed a plan that would create 15 regional tax districts based around the state’s technical centers. Her plan would preserve local school boards, who would create individual school budgets and forward them to a central board, which would create a single budget to be voted on by residents within the district.

Students would have school choice for any school within the tax district, and parents within the district would share a common property tax rate.

“The elimination of local school districts and local school boards, the elimination of local community voice in providing educational services to the students they know best, is not, in my view, the direction we should go,” Scheuermann said.

Sharpe’s committee voted unanimously to not support the amendment.

“This eviscerates the bill that we supported yesterday,” Sharpe said. “It sets us back in our effort to create better education for students at a price Vermonters can afford.”

Sheuermann’s amendment was defeated by a vote of 83 to 37.

The Senate will have the next month to choose to take up the bill, longer than they had last year when a school district merger bill was approved by the House in mid-April.

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

House gives preliminary approval to school district merger bill

MONTPELIER — House lawmakers have given preliminary approval to a bill that would merge the state’s school districts and potentially cap education spending.

By a vote that was not divided by party lines so much by the size of the towns and cities they represent, House members Wednesday approved a bill that would overhaul school governance in the state by a vote of 88 to 55.

“This bill will provide for valuable improvements to education for our students and do it within a cost structure affordable to Vermont residents,” said Rep. David Sharpe, D- Bristol, who chairs the House Education Committee.

The bill, which has been in the works since January and which follows a district merger bill that received House approval last session before dying in the Senate, calls for the merger of the state’s nearly 300 school districts into districts that provide Pre-K-12 education with at least 1,100 students by the year 2019.

The bill would compel districts to conduct studies on the feasibility of merging with their neighbors — or any other district — and present merger plans to voters for approval by 2017. Following voter approval, the merger plan would be presented to the State Board of Education for final approval.

Districts that do not act by 2017 would have their merger plans made for them by the Agency of Education.

Rep. Cynthia Browning, D-Arlington, offered an amendment to the bill that would have removed the mandatory district consolidation component of the bill.

“I don’t think school districts that are performing satisfactorily in the eyes of a community should be forced to reorganize,” Browning said, expressing opposition to the idea that merger plans would be subject to the approval of the unelected members of the State Board of Education.

“How would Vermont feel if Congress in DC said to Rhode Island and Vermont, ‘You know, your states are small. You need to merge’?” Browning said.

Sharpe noted that Act 153 of 2010 provides financial incentives for districts to merge voluntarily, and in the intervening five years, very few districts have actually merged.

“The voluntary process might work in 100 years, but we don’t have 100 years,” Sharpe said.

Browning’s amendment was defeated by a vote of 80 to 62.

House lawmakers did approve an amendment offered by Rep. Patricia Komline, R-Dorset, to require any future bills dealing with education that cost money to be paid for with a transfer from the General Fund to the Education Fund.

The amendment, which received broad support by a vote of 129 to 19, would not apply to expenses incurred from mandates within the bill itself.

Lawmakers also approved an amendment from Rep. Sarah Buxton, D-Tunbridge, that would implement a school district spending cap if districts do not curb their spending increases voluntarily.

Under the Buxton amendment, if the average increase of school budgets in the state exceeds 2.95 percent in 2016 — the average rate of growth for school budgets approved at town meeting in March — then districts would face a spending cap of 2 percent the following year.

As she did for most of the day, Browning expressed opposition to the idea of a spending cap, saying that requiring school boards to cap their budgets while lawmakers do not cap their own spending smacks of hypocrisy.

“This is, ‘Do as we say, not as we do,’” Browning said.

The bill is expected come before the House for final approval Thursday. But, even if approved, the bill will be sent to the Senate Rules Committee, where last year’s school district merger bill languished until the end of the session.

New report finds savings in school district consolidation

BARRE — On the eve of a legislative debate on a bill to consolidate the state’s school districts, the Agency of Education released a joint report showing small school districts spend more to educate students than their larger counterparts, and offer fewer educational opportunities.

Tuesday, the Agency of Education and Rutgers University released a report titled “When is Small Too Small? Efficiency, Equity & the Organization of Vermont Public Schools,” which is intended, in part, to refute previous study claiming school district consolidation would not save money or improve students’ education experiences.

In January, Daniella Hall and Ian Burfoot-Rochford, researchers at Penn State University, released a study asserting district consolidation in Vermont would not save money, and argued for the preservation of small schools and the state aid that allows them to be financially viable.

However, the new report — from Wendy Geller, data administration director for the Agency of Education, and Bruce Baker, a professor at Rutgers Graduate School of Education — asserts that Hall and Burfoot-Rochford’s study presents a “selective, inaccurate, and imbalanced characterization” of their source materials by “conflating” studies on school consolidation with studies on school district consolidation.

“What this report does is document the fact Vermont’s numbers are so much smaller than most people’s that it’s not the same conversation and so the previously cited information from Penn State was not really pertinent to Vermont’s situation,” said Stephen Dale, executive director of the Vermont School Boards Association.

Hall and Burfoot-Rochford did not return a call seeking comment Tuesday.
The new report cites a 2007 study of school district consolidation in rural upstate New York from authors William Duncombe and John Yinger — who Geller called “seminal thinkers in the field” — that looked at 12 school district mergers from 1985 to 1997.

The study concluded that a school district that doubled in size, from 300 students to 600 students, saw an average decrease in its per-pupil spending of 61.7 percent.

The study notes that many district mergers necessitated the school construction. However, even when taking into account capital construction costs, a district that doubled in size from 300 students to 600 students still saw its per-pupil costs decrease by an average of 31.5 percent.

The study also looked at course work and non-academic activities and determined that high schools with fewer than 400 students offered students substantially less than larger high schools.

The AOE-Rutgers report also looked at data in Vermont, finding that at the elementary level, on average, smaller school districts spend $1,000 more per pupil than larger districts.

“What we are hearing increasingly is that our smaller schools, or the smallest schools, are challenged with regard to breadth of opportunity for students, impressions of sustainability in their own communities and the fact that they’re making investments, in some cases, at fairly substantial rates, just to hang on to what they have and not to expand in any manner,” said Jeff Francis, executive director of the Vermont Superintendents Association.

The report comes as House lawmakers prepare to debate the merits of a bill that would consolidate the state’s school districts into units with at least 1,100 students that offer pre-K-12 education.

Lawmakers are expected to take up the bill today.

Read the report:

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