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Vermont House approves $2.8 million in fee increases

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

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

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

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

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

Administration may cut up to 400 state jobs, official says

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

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

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

Justin Johnson

Justin Johnson

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

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

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

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

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

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

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

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

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

Shelley Martin

Shelley Martin

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

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

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

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

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

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

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

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

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

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

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

Vermont resumes tax refunding

MONTPELIER, Vt. (AP) — The Vermont Department of Taxes is again issuing personal income tax refunds after temporarily halting them while it investigated possible cases of refund fraud.

The state suspended the refunds last week over concerns about an increase in tax refund fraud reported by other states. It says the surge was related to stolen identities elsewhere and not to any security breach of Vermont government systems.

TurboTax, the country’s most popular do-it-yourself tax preparation software, said Friday that it had temporarily stopped processing state tax returns because of an increase in fraudulent filings. But parent company Intuit says it resumed the filing of state returns with increased anti-fraud measures Friday evening.

The Vermont Tax Department says that it has expanded its fraud detection efforts in response to the growth in bogus refunds.

Vermont congressional delegation concerned about war request

MONTPELIER, Vt. (AP) — Vermont’s congressional delegation says it has concerns about President Barack Obama’s request to authorize war against Islamic State militants.

Sen. Patrick Leahy says the country has a responsibility to take action but must do so in a way that does not result in an open-ended authorization that becomes legal justification for future action against unknown enemies.

Sen. Bernie Sanders says he fears U.S. involvement in “an expanding and never-ending quagmire in that region of the world” and says he supports targeted U.S. military efforts to protect Americans.

Congressman Peter Welch says he cannot support the authorization as it is because he says it leaves in place the Bush-era open-ended authorization.

Obama would limit the authorization to three years, with no restriction on where U.S. forces could pursue the threat.

Administration restricts hiring, says union unlikely to help find savings

MONTPELIER — Secretary of Administration Justin Johnson issued an edict to agency and department heads Tuesday that all new hires within the executive branch must be approved by his office.

The move, according to a memo Johnson sent to agency and department heads, is the result of signals from the Vermont State Employees Association that it is not willing to work with the administration on finding $5 million in personnel savings called for in Gov. Peter Shumlin’s budget proposal.

Johnson wrote in his memo that he was “both surprised and disappointed to be approached to sign a VSEA ‘Fight Back’ petition that calls for no cuts in state government spending. The petition indicated that the union will not deal with the administration on labor savings.”

Justin Johnson

Justin Johnson

VSEA spokesman Doug Gibson said members are passing out petitions at work sites and to the public asking for signatures in support of their position against further cuts to the state budget.

“We are united, and we are calling on Vermont lawmakers to join us in seeking alternatives to cutting the vital public services that we all rely on every day. We also ask that you respect our collective bargaining agreements, the terms and conditions of which are mutually negotiated and agreed to by state employees and the State,” the petition reads.

Although the VSEA petition does not explicitly state that the union will not work with the administration, Johnson cited it in his memo as the reason for running all hiring decisions through his office.

“We are concerned that the union is saying “No” before we have even have an opportunity to talk. This approach leaves me very concerned that the administration won’t have an opportunity to take steps, in conjunction with the union, to help minimize any jobs losses while meeting a balanced budget,” Johnson wrote.

For now, all vacant positions must be approved by Johnson’s office. Any request to fill a position must include a justification for how the position “fits into department or agency priorities, is critical to the work of the organization, and why it would likely not be a part of any programmatic or staffing cuts going forward if that is where we end up,” according to the memo.

“The requirement applies to all positions across the executive branch — no exceptions,” Johnson wrote.

The restriction applies to vacant positions that are not already in active recruitment, and to all new vacancies that emerge.

Johnson expressed hope Tuesday that the administration and the union can find a way to find personnel savings in the general fund together.

“I’m still confident that we can sit down and talk things out, but I need their help to do that,” he said. “I can’t just go in there crashing around in the contract on my own.”

But VSEA Executive Director Steve Howard was clear Tuesday that the union is unlikely to agree to renegotiating labor contracts.

Steve Howard

Steve Howard

“Our members are not interested in opening their contract or seeing state employees be (laid off). It’s not in the interests of the state of Vermont,” he said.

Howard said union members want Shumlin to seek new revenue to help balance the state’s budget and is opposed to additional cuts.

“Our members are united behind the idea that the solution to this problem is to ask the wealthiest Vermonters to pay more,” he said. “If he asks millionaires to pay more, our members are all ears.”

neal.goswami@timesargus.com

Read Johnson’s memo below:

Administration analysis aims to boost payroll tax proposal

MONTPELIER — Gov. Peter Shumlin on Monday continued a media offensive aimed at building support for his proposed payroll tax, releasing data that he says shows the tax will actually be beneficial to school districts and municipalities.

Shumlin said Monday that Vermont schools could see a savings of $3 million per year, and municipalities could see a savings of $900,000, if the proposed 0.7 percent payroll tax is passed by lawmakers.

The payroll tax Shumlin pitched in his budget address last month to reduce the so-called cost shift has garnered little support from Legislative leaders or rank-and-file members. But Shumlin has been pushing his plan to media outlets, and by extension, to the public, arguing it will help boost Medicaid reimbursement rates and pay for the expansion of the Medicaid program under the federal Affordable Care Act.

Shumlin’s plan would use the $90 million generated from Vermont businesses and $100 million in matching federal funds to boost Medicaid reimbursement rates to Medicare levels — about 80 percent of the actual cost of care. Boosting Medicaid rates means providers would not have to charge private insurance plans as much to make up costs, according to the administration.

Most Vermont businesses would pay less than $1,000 per year if the payroll tax is enacted, Shumlin said.

The administration’s proposal calls for using $140 million of the combined state-federal money raised through the payroll tax to boost Medicaid reimbursements. Doing so, according to the administration, “is expected” to reduce private insurance premium costs for businesses and individuals by 5 percent. While those premium are likely to still rise, it would be 5 percent lower.

The administration says most businesses will see a greater return from the premium savings than they will pay out as a result of the payroll tax. Schools and municipalities are among the groups expected to see significant savings, Shumlin said.

“Schools and municipalities spend a lot of money to insure their employees,” he said. “Under our plan, they will be asked to pay a small payroll tax but will see that amount and more returned to them in reduced private insurance costs. That will save schools and municipalities money, helping to ease the burden of rising property taxes on Vermonters and allowing municipal governments to use money they would have spent on health care costs to make their cities and towns even better.”

The administration released data Monday from the Vermont Department of Labor, Tax Department and the Agency of Education, as well as from a private consulting firm, to try and bolster its case.

According to the administration’s analysis, schools in Vermont are expected to pay $931.8 million in salaries next year and spend $190.3 million on health care costs. Under the governor’s proposal, schools would pay out about $6.5 million if the payroll tax is exacted. However, they would save $9.5 million if they reach the 5 percent premium reduction predicted — a net savings of $3 million.

Municipalities, meanwhile, have an expected payroll of $309.4 million. They are expected to spend $61.3 million in health care costs next year, according to the administration’s analysis. The 0.7 percent payroll tax would hit municipalities to the tune of $2.2 million, but a 5 percent reduction in premiums would result in a reduction of $3.1 million — a $900,000 savings.

Shumlin spokesman Scott Coriell said applying $140 million in higher Medicaid payments to providers against the $1.6 billion in private insurance premiums paid, would result in about an 8 percent savings in private insurance premiums. That assumes that each additional dollar paid into Medicaid would result in a corresponding dollar in private premiums, however.

The administration went with a more conservative estimate of 5 percent savings because not every dollar applied to cost shift reduction will result in the lowering of premiums by an equal amount, Coriell said.

According to the data provided by the administration, both schools and municipalities see a net savings if the reduction in private premiums is at least 4 percent. However, if the reduction only amounts to 3 percent, schools would see a net loss of $813,000, while municipalities would see a net loss of $327,000.

Speaker of the House Shap Smith was unavailable to comment Monday, according to his aid, Dylan Giambatista. He said Smith would ask the Legislature’s Joint Fiscal Office to review the administration’s data.

“We really haven’t had a chance … to take a look at the numbers,” he said.

Additional analysis is expected to be completed to gauge the impact on the state’s payroll, Coriell said.

neal.goswami@timesargus.com

See the administration’s analysis below:

Shumlin taps former Rhode Island health official for DVHA

MONTPELIER — Gov. Peter Shumlin on Monday announced the appointment of Steven Costantino, former secretary of Rhode Island’s Executive Office of Health and Human Services, as the next commissioner of the Department of Vermont Health Access.

Costantino will replace outgoing Commissioner Mark Larson, who said in January he would be stepping down in March following a tumultuous several hears at the helm of DVHA.

Steven Constantino

Steven Constantino

“We’re excited to welcome Steven to the team and to Vermont,” Shumlin said in a release. “I have known Steven since our days serving in our respective state legislatures and understand him to be a dynamic, hands-on leader. His experience in both the executive and legislative branches of government will serve him and Vermonters well in this position.”

Agency of Human Services Secretary Hal Cohen, whom Costantino will serve under, touted Costantino’s prior experience.

“Steven Costantino’s experience with Medicaid and healthcare reform will be critical as we move toward providing affordable healthcare coverage for all Vermonters,” Cohen said.

Costantino most recently served as secretary of the Rhode Island’s Executive Office of Health and Human Services, the umbrella agency that administers the state’s Medicaid program as well as the state’s main health and human services agencies. According to the Shumlin administration, Costantino was involved in implementing Rhode Island’s Medicaid expansion and health insurance marketplace.

Prior to that, Costantino served eight consecutive terms in the Rhode Island House of Representatives and, including a stint as Finance Committee Chairman.

“Vermont is known nationally for its leadership, innovation and creative approach to Medicaid. I am so excited and honored to serve as the Commissioner of the Department of Vermont Health Access,” Costantino said in a statement released by Shumlin’s office. “I look forward to drawing upon my successful experience in Rhode Island to help Vermont develop its healthcare reform efforts.”

DVHA oversees the state’s Medicaid program, as well as Vermont Health Connect, the state’s online health insurance marketplace.

Larson has had a rocky tenure as commissioner since taking the post in January 2011, which included overseeing the botched rollout of Vermont Health Connect.

The former state representative from Burlington and chairman of the House Health Care Committee, was eventually stripped of his oversight of the exchange in September of last year by Shumlin. The site was taken offline by the state after the federal government raised concerns over its security and threatened to disconnect the state from a federal data hub.

Larson’s oversight role was taken over by Chief of Health Care Reform Lawrence Miller, Shumlin’s former Commerce secretary, who was first brought on in January 2014 to help the Shumlin administration right the ship after the botched exchange rollout in October 2013.

Larson was also chastised last year by Shumlin and legislative leaders after he offered misleading statements concerning an exchange security breach to the House Health Care Committee.

Sanders to skip Netanyahu speech to Congress

WASHINGTON (AP) — Liberal Sen. Bernie Sanders said Monday he will skip Israeli Prime Minister Benjamin Netanyahu’s address to a joint meeting of Congress early next month, arguing that President Barack Obama should have been consulted before the invitation was extended.

The Vermont independent is the first senator to announce he won’t attend the speech. Democratic Reps. John Lewis of Georgia and Jim Clyburn of South Carolina are among a handful in their party who have said they will skip Netanyahu’s speech.

“The president of the United States heads up our foreign policy and the idea that the president wasn’t even consulted — that is wrong,” Sanders said. “I am not going. I may watch it on TV, but I’m not going.”

House Speaker John Boehner, an Ohio Republican, extended the invitation — which comes two weeks before Israel’s elections — without discussing it beforehand with the White House.

Sen. Bernie Sanders

Sen. Bernie Sanders

Added Sanders in a statement: “I think it is very unfortunate that the Speaker of the House invited Prime Minister Netanyahu to address the Congress without consulting President Obama. Further, Netanyahu’s speech is slated to take place just two weeks before the Israeli elections. The U.S. should avoid even the implication of influencing a democratic election of a foreign country.”

Netanyahu is a sharp critic of administration negotiations with Iran over its nuclear program, and Democrats fear he’ll use the opportunity to embarrass Obama and further his own re-election prospects.

Guns, school governance and tax refund halt – Capitol Beat, Feb. 9, 2015

Play

Vermont Press Bureau chief Neal Goswami and VPB reporter Josh O’Gorman discuss a public hearing coming up on Tuesday about gun legislation, a House Education Committee bill to reform school governance and why the state has temporarily halted issued tax refunds.

Shumlin decries VITL media campaign

MONTPELIER — Gov. Peter Shumlin is criticizing a decision by Vermont Information Technology Leaders to purchase advertising time during this year’s Super Bowl, saying the money could be better spent on improving care for Vermonters.

VITL, a nonprofit organization that looks to advance health care reform through information technology, has been designated by the state to operate the Vermont Health Information Exchange. It is not, however, a part of state government, and has its own board of directors and staff. The group is largely funded through grants.

VITL helps health care providers adopt and use IT systems, with the goal of improving the quality of care delivered and boosting patient safety while reducing costs.

According to VITL, allowing providers to exchange health information means they have the ability to see a more comprehensive, accurate and current medical histories of patients. That means better care by avoiding duplicate tests and errors in prescribing medicines.

“Many Vermonters joined me in being disappointed that state and federal funds were being used for an advertising buy during the Super Bowl. This should highlight the need for the Green Mountain Care Board to regulated VITL’s expenditures,” Shumlin said Sunday.

Gov. Peter Shumlin proposed in his budget address last month that VITL and the health information exchange it operates be put under the authority of the Green Mountain Care Board, which regulates health care in Vermont. That would mean the GMCB would have oversight of VITL’s budget.

Gov. Peter Shumlin

Gov. Peter Shumlin

The organization recently announced an awareness campaign to boost its exposure. A public survey the group conducted revealed that Vermonters have a high level of awareness of electronic medical records but a much lower awareness of VITL.

VTDigger reported last week that VITL spent $13,000 of a $30,000 ad buy for a commercial to air on local affiliates during the Super Bowl. According to the VTDigger report, that is part of the $195,000 marketing campaign the group has planned.

Shumlin said VITL should be working with health care providers to boost participation in the Vermont Health Information Exchange, not appealing directly to patients.

“VITL’s doing great work and they’re helping electronic records contain health care costs, but the providers using the service should be educated to encourage their patients to sign consent forms. The notion that you go direct to the patients seems misguided. It just seems like an inappropriate expenditure of $200,000,” he said.

The governor said he believes his feelings have been conveyed to VITL officials, who could not be reached for comment on Sunday. And he hopes lawmakers will also see this as a reason to bring VITL under the GMCB’s authority.

“I’m sure that they’ve heard about my disappointment. I think that the answer is that the Green Mountain Care Board does a great job of regulating costs and asking tough questions about debatable expenditures. Let’s make sure that the Green Mountain Care Board has the same authority over VITL,” Shumlin said.

neal.goswami@timesargus.com

Video: Vermont This Week on Vermont PBS

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

Vermont delegation heads to Colorado for pot fact-finding

MONTPELIER, Vt. (AP) — Senior Vermont law enforcement officials and others are planning a fact-finding trip to Colorado next week to look at that state’s experience with marijuana legalization.

Public Safety Commissioner Keith Flynn, Chitttenden County State’s Attorney T.J. Donovan and pro- and anti-legalization advocates will be among those traveling to the Rocky Mountains.

“Colorado was the first state to legalize marijuana, and we want to see the impacts of that law.” Flynn said Friday. “Legalization is being discussed in Vermont and we believe that an on the ground look at how it has been implemented will give us a unique insight into the issue. It is important to learn as much as we can about the regulation, the effects on communities, and any other information that will provide policymakers with as much information as possible when considering decision points around this issue.”

The nine-member delegation, which also will include the Rutland County sheriff, Bennington’s police chief and an assistant U.S. attorney, plans to meet with a range of people in Colorado to talk about that state’s experience with legalization.

The list includes law enforcement officials, members of the Colorado governor’s staff, school personnel and the U.S. attorney in Denver. They’ll also tour a marijuana growing operation and a store selling marijuana products.

Killington calls for education reform and more money for tourism

The Killington Select Board has sent a letter to House Speaker Shap Smith calling for reforms to the state’s education funding formula and for the state to spend more money to promote Vermont as a tourist destination.

Below is the letter in full:

 

Vermont Tax Department halts refunds

MONTPELIER — Vermont’s Tax Department has put a temporary hold on issuing income tax refunds to taxpayers who have already filed returns because of suspicious activity with a third-party tax filing program.

Returns sent electronically to the Tax Department through TurboTax, filing software made by Intuit, have had an unusually high amount of alerts, Gov. Peter Shumlin said Friday. As a result, the state decided to halt issuing returns on Wednesday night, he said.

“This is the new, ‘How do you rob a bank?’ It kind of used to be Bonnie and Clyde, now you figure out a way to exploit a technology, TurboTax, to get somebody else’s refund. This is not just a Vermont problem, it’s happening nationally and the IRS is all over this,” Shumlin said in an interview.

Intuit said Friday it is working with states that have seen “an increase in suspicious filings and attempts by criminals to use stolen identity information to file fraudulent state tax returns and claim tax refunds.” Intuit stopped transmission of electronic tax returns to states on Thursday.

The company said it is working with a third-party security firm on a preliminary investigation of recent fraud activities. So far, instances of fraud do not appear to be the result of a security breach of its systems. Rather, the information used to file fraudulent returns was obtained from other sources outside the tax preparation process, according to the company. The investigation is ongoing, however.

“We understand the role we play in this important industry issue and continuously monitor our systems in search of suspicious activity,” Brad Smith, Intuit president and chief executive officer, said in a statement. “We’ve identified specific patterns of behavior where fraud is more likely to occur. We’re working with the states to share that information and remedy the situation quickly. We will continue to engage them on an ongoing basis in an effort to stop fraud before it gets started.”

Shumlin said no state systems have been compromised, but Tax Commissioner Mary Peterson chose to halt refunds until the problem could be solved. Other states have also suspended tax refunds.

“What the commissioner has wisely said is, ‘Let’s just put a hold on refunds for a few days and work through these red flags, individual, one-by-one, to make sure that no one’s ripping off Vermont’s taxpayers,” the governor said.

Shumlin said the delay in refunds is likely to last a few days.

“What I’m trying to protect Vermonters from is having their money ripped off by people who don’t deserve it,” he said. “This isn’t going to be a long pause, but we really do want to work through why we’re getting so many red flags. The other states, I think, are doing the same thing, taking a brief pause on refunds so we can get to the bottom of this.”

Intuit has set up a toll-free number for customers who believe they could be victims of fraud. The number will provide direct access to specially trained agents who can assist. The company is also providing identify protection services and free credit monitoring.

“We understand the pain and frustration identity thieves cause taxpayers,” Smith said. “We know how important tax time is and our number-one priority is making sure peoples’ returns are filed timely, accurately, and safely.”

This story was updated online at 1:45 p.m. on Friday, Feb. 6.