April Email Newsletter
The Big Bills
Every year, we must pass the “big bills,” the ones that fund government services and provide for taxes to be raised. Included in this category are the capital and transportation bills, which use federal and bonded dollars for buildings, roads and bridges.
We started the budget process with a gap of $176 million, and we had no more ARRA stimulus funds to help, as we have in the past two years. A portion of this gap was also related to unseen savings from the Challenges for Change legislation last year. Governor Shumlin, prior to taking office, was able to negotiate with VSEA for increased payments on their part for their health care and we actually were able to apply over $25 million of surpluses gained in other ways to the gap. The governor pledged not to raise any broad based taxes, and presented a budget that asked for $45 million in cuts to our human services — our social safety net for children, families, the elderly, the developmentally disabled and those with mental health issues.
It was a difficult budget to swallow, and the Appropriations committee put their heads down and presented a budget that was balanced and, given our fiscal dilemma, which we expect to last at least one more fiscal year, as fair as it could without any federal assistance. Fifty percent of the proposed cuts were “bought back”, we raised the cigarette tax 27¢ and we raised provider taxes on hospitals. We also made severe cuts to programs, but tried to keep them alive, so when our fiscal health improves, we will be able to refund them.
I voted against an amendment on the floor to raise taxes on the top 5% of income tax payers as a way to raise about $25 million because I did not feel it was proper to do so without a longer (and louder) debate. We know that we have to find revenue, and the Ways and Means committee has assured us that they will be working on this for the rest of the session. I also know we face some deep cuts in federal funding for other social safety net programs — food shelves, Head Start, and fuel assistance are all on the chopping block — but we don’t yet know how deep. If these cuts materialize, we will have to mobilize and find revenue quickly. When we have a better idea of what may happen, I think we will be able to address how and where we will find the funds.
The bill now resides in the Senate, and they will undoubtedly make changes to our budget. When they pass it, it will come back to the House and will become subject to further negotiation. We’ll keep you posted.
The Miscellaneous Tax Bill
This is the revenue bill, and it was written to raise the necessary revenue to run the state. It is written close and constant contact with Appropriations. The major changes this year raise cigarette taxes 27¢ — matching the Massachusetts tax rate and still lower than New York — and the provider tax for hospitals. The provider tax will allow us to draw more funds from the government for Medicaid.
I co-sponsored H.401, which proposes to raise taxes on those who have benefitted most from the Bush Era Tax Cuts. This year, these 15,000 individuals will reap $190 million in a federal tax benefit. H.401 is a modest bill, in that it requests only $17 million from these individuals and would be temporary, much like the Snelling Surcharge from 1991. For the reasons listed above, this amount may be too small, and it will be up to the Ways and Means committee to start the process again. We’ll keep you posted as any bill moves its way through the House and Senate.
Health Care Reform
The current discussion about health care reform is driven by the
unsustainable increases in health care costs. We’ve seen a $2 billion
dollar (50%) increase in just over five years. Beyond 2012, the
projected costs just keep increasing.
Without reform, this escalation in cost will be felt by every
Vermonter. We will experience it through increases in our local
municipal and school property taxes, as well as in the increasing
premiums we’ll pay, combined with reductions in health services.
I’ve been a legislator for three years now and have repeatedly heard
concerns about the crisis we face in rising school costs and property
taxes. This growth pales in comparison to the growth of health care
costs. Since 2000, health care costs have increased $3 billion while
education costs have increased by $600 million.
Neither of these numbers can be dismissed, but when we couple the
growth of health care costs with the lingering economic downturn for
the middle and lower classes, we can begin to see why all of our
budget dollars are tight.
I believe the growth in health care costs has reached a crisis and is
unsustainable. Wouldn’t you agree? We must focus on solutions that
can demonstrate serious promise for controlling cost and improving
access, not merely trying to adjust the status quo.
H.202 is the beginning of a 4-7 year process of changing the way we
pay for and deliver health care services. It creates a board that
will start building a new system that adheres to federal law and
provides enough savings to allow for universal health access.
Rep. Rebecca Ellis and I will be hosting informational forums to
provide information on H.202. I hope you can join us for a
conversation on this critical issue and the steps we are taking as a
state to address it.
2011 Town Meeting Report
The Fiscal Crossroads
Once again, Vermont faces a budget gap that is, at first glance, unfathomable. This year we are starting with a $176 million difference between anticipated revenues and expenditures. This year, however, we do not have the luxury of the stimulus funds that cushioned the blow over the past two years. In fact, with the threats of a new austerity coming from the federal government, we may face a 5% drop in revenues we already receive and have budgeted for. Social service agencies – who, only a year ago, were receiving funds to create jobs and strengthen programs for the poor — are threatened with a 50% cut in their resources, meaning immediate closure for some of these resources. Since 2008, we have cut over $300 million from the state budget — and this is after a softened landing with ARRA funds. We have been making incredibly difficult decisions regarding the services we provide, and that difficulty remains due to our daunting financial dilemma.
This dilemma is seen when Governor Shumlin’s budget and agenda is studied. On one hand, he is asking for some extreme cuts in human services as one method to narrow the gap. We have heard repeated concerns about many of these proposals, including cumulative effects for some families. There are valid concerns that some of these proposals will actually result in higher long-term costs, especially after fighting similar cuts in recent years. On another hand, Governor Shumlin has proposed a complete overhaul of our health care system — an overhaul that projects to save over $500 million in its first year of operation. The planning for this reform is underway in the House health care committee and has many miles to go before it can be implemented. Not changing the way we pay for and provide health care will have serious implications to the overall fiscal health of our state, its businesses and its citizens. Based on the report of Dr. Hsaio, we are optimistic that the requisite federal waivers will be secured and this system will be in place by 2015.
We have also welcomed home our neighbors who have served in the National Guard during the recent deployment to Afghanistan. It is a welcome sight to see them at the grocery store, the gas station, the book store.
Once again, the legislature has been experiencing a delicate balance between sharing the burden of the recession throughout our society, create a balanced budget that meets the financial challenges of our state and create new ways of offering services while respecting the needs of Vermonters. The fine line is how to make this gap smaller without raising any new revenue. It is not certain that we can do one without the other.
Abenaki Recognition
The House passed legislation acknowledging the Nulhegan and El Nu Abenaki bands as state-recognized tribes. This historic moment comes a year after enacting a law that set up a process and criteria for recognizing tribes in Vermont, and after decades of political gridlock on the recognition of the Abenaki people. On top of the honor and acknowledgment of their heritage, gaining state recognition will mean Vermont Abenaki artisans can seek federal arts and crafts designation to sell their handmade wares for a fairer price, which presents new economic development opportunities to otherwise struggling Vermonters. It also allows the tribes to apply for federal and private education, cultural preservation, and social services grants to help their people thrive and their way of life survive. What this recognition does not afford is the ability to engage in illegal gambling activities or build casinos.
Wastewater Treatment Plant
Waterbury Village’s wastewater treatment plant is a point-of-source phosphorus discharge for the Winooski watershed, which empties into Lake Champlain. Due to a law passed in 2003, we have been required to replace or upgrade the plant to meet new Total Daily Maximum Load levels for phosphorus. This upgrade for the TMDL was to be paid for by the state. After years of negotiation, the village and the state have agreed to a fix and a price for those upgrades. Funding for the plant is currently scheduled to be in the Capital Bill, which would allow for the work done this year. One hitch: the federal EPA has pulled the TMDL levels established in the early 2000s, calling them insufficient. The state is in discussion with the EPA about how this will affect our project. This is an important upgrade and we hope it can happen this year. All run-off into the lake creates a problem and the village and the state believe the planned fix will be sufficient.
Sales Tax Fairness
Local retailers have been asking for years that we find a way to level the sales tax playing field between online retailers such as Amazon.com and the bricks-and-mortar stores that often make up the heart and soul of our revitalized downtowns. Our local retailers collect a 6% sales tax, but online retailers — if they don’t have a physical presence in the state — do not. A study by the University of Tennessee estimates that Vermont will lose $28 million in uncollected internet sales tax revenue in 2012.
The House Ways & Means Committee has been taking testimony on a bill aimed at correcting this inequity. Modeled on a successful New York statute, our bill seeks to compel online retailers to collect the Vermont sales tax if the web-based business relies on in-state “affiliates” to facilitate a sale. It will create the necessary connection between the online retailer and the state, and will treat all retailers, cyber or traditional, in the same manner. Ways & Means will continue work on this legislation in the weeks to come.
Expanding Telecom Coverage
Vermont has set an ambitious goal: to extend Internet broadband and cell phone coverage throughout Vermont by the end of 2013. This is a big, complex project with many interconnected parts. We have met on several occasions with representatives from FairPoint and the Vermont Telecommunications Authority since last summer in an attempt to keep both Duxbury and Huntington on the radar in this effort. Each community needs a different level of service, and each community will be connected in different ways. FairPoint has stated numerous times that its plans for build-out to Duxbury for DSL will happen by the end of June. Huntington seeks cell coverage, and conversations about how to accomplish this have ranged in many different directions. The VTA feels if we can solve Huntington, it will be a model for solving issues in other towns. It is an arduous process and full of landmines — cost, density of customers, incentives, partnerships. We expect VTA to be able to address Huntington’s needs this spring and early summer — but that timeframe has no guarantee of success. If it does, Huntington will at long last be fully involved in the world of modern communications.
Renewable Energy
The House Natural Resources and Energy Committee is working on a renewable energy bill, H.56, which will continue to move Vermont to a clean energy future, reduce our dependence on fossil fuels, and protect ratepayers from volatile price swings in future energy costs. This is an ongoing effort, and there are several major studies due later this year which will guide future legislation. The Department of Public Service is working on a state energy plan, which will serve as a roadmap for what kinds of energy sources Vermont should have, and roughly how much of each. The Department is also working on a study of implementing a Renewable Portfolio Standard (“RPS”) which mandates inclusion of a fixed percentage of renewable energy generation by a certain date in the near future.
In advance of these reports, H.56 will expand net metering, which allows homes and businesses to install solar or small wind generation to offset their electric bills; this also helps the power companies to have extra energy available when it is needed, usually on hot days in summer. The bill also seeks to allow current hydro and biomass (wood chip) projects to continue operation after federal price contracts expire. Another provision moves the administration of the Clean Energy Development Fund to the Department of Public Service and seeks to address the long-term viability of the fund, which provides support for innovative energy projects and new technologies. With the closing of Vermont Yankee scheduled in 2012, the state has moved aggressively to secure reliable, renewable power from Hydro-Quebec. The goal is to provide a diversified energy portfolio, with as much in-state generation as possible, at affordable rates that support Vermont’s continued business and residential growth.
Waterbury Record, September 23, 2010
Did you know that September is Hunger Action Month? Across the state and the nation people are raising funds and donating food to their local foodbanks to help alleviate hunger in their communities. Each year, the Vermont Foodbank and its partners, such as our local food shelves, provide food to over 86,000 Vermonters — and the number is rising during this recession by nearly 40%. This month a focus is being paid across the state to this issue, and you can see the breadth of participation everywhere, from apple orchards asking customers to pick an extra bag to donate, to local companies, churches and youth groups playing kickball to raise funds this past weekend in Waterbury, to food drives and bake sales and car washes.
Hunger affects us all. Food insecurity can cause problems that may look normal on the surface but, when traced back to hunger or worrying about where the next meal will come, are anything but, as they are avoidable. For students, lack of food and energy can cause grades to falter and physical skills to decline. For adults, stress about being able to make ends meet can affect physical and mental health. For seniors, lack of food can affect energy and efficacy of medication. These outcomes can then spread across the spectrum — an increased need for special services, increased expenditures in our health care system, and increased crime.
These aren’t theories — they are facts. And no matter how hard we work or how much we give, we see no end in sight for hunger or food insecurity. As a community, we do our best and give what we can.
Added to this now is the news that the 3SquaresVT benefits (formerly food stamps) will be lower for some households starting October 1, 2010. This lower benefit results from a federally-required change to the standard deduction that households can claim for fuel and utilities ($744 to $614 per month). This change in the deduction will affect nearly 16,000 of the approximately 43,000 households who currently receive 3SquaresVT and will lower their benefits between $7 and $40 per month, according to the Vermont Department for Children and Families (DCF).
This deduction, which is determined by federal requirement, had risen from $572 to $744 in 2008, when the average cost of a gallon of fuel oil reached $4.00. The average cost for fuel oil in 2010 dropped to $2.66. This change has triggered the change in benefits — at a time when other benefits have been frozen or may drop as well. It is a difficult proposition for some families, for $500 may represent groceries for a month.
If you have been affected by this cut, DCF invites you to visit their website at www.mybenefits.vt.gov or to call their Benefits Service Center at (800) 479-6151 to find out about other programs that can help, including phone and fuel assistance. DCF also suggests calling the Vermont Foodbank at (800) 214-4648 to find out if you can secure more food through the Commodity Supplemental Food Program.
If anyone in the Waterbury and Duxbury community is having difficulty receiving these benefits, please call me or Rep. Minter and we will do our best to help you get them.
But here’s an easy thing to remember: With a $10 of donated money, the Vermont Foodbank can buy 25 pounds of food. There is a power when a community takes care of their own, so please keep in mind those who go without food when they most need it, and if you are to give this month, make the Vermont Foodbank and your local Community Action Service Team here in Waterbury the beneficiaries of your generosity.
Waterbury Record, May 27, 2010
The 2009-2010 biennium finished with a rush late on Wednesday, May 12 — the big bills were negotiated between the House, Senate and the Douglas Administration in a way to avoid vetoes. The bills — the budget, the tax bill and Challenges for Change — represented compromises that held plusses and minuses for all of us. There are many things in each that were positive and many things that were difficult to give. But compromise we did, and in a way we were certain will bring both the best and “not the worst” to fruition.
What we did not compromise on, however, was our commitment to the values that make Vermont a special place to live — our work will provide the tools people need to create new jobs, our work created and/or strengthened policies that will bring our state back to fiscal health sooner than other states in the union, and our work avoided the devastating cuts to programs that are helping our neighbors survive this economic downturn.
We did not do this alone, of course. The Challenges for Change program was jointly developed between the Douglas administration and the General Assembly. Inherent differences about how the proposed savings will occur still remain, but by dealing with some of the more highly charged issues that bog down the budget discussions annually in this separate bill, and in a way that proposes real change rather than simply offering budget cuts, we feel this was a step forward and a great improvement over last year’s contentious session. Neither the administration nor the General Assembly wanted to see this session end on a negative note.
Other people helped, too. The school teacher’s union, Vermont NEA, responded to the governor’s desire to increase the property tax by shifting the state’s share of our teachers’ retirement pensions — a promise made to our teachers in the 1940’s — from the General Fund to the Education Fund. The union collaborated with their members and the state treasurer and fashioned a compromise that returned $15 million to the General Fund this year alone — nearly 10% of the projected budget gap. State employees signed a two-year contract that reduces their pay by 3% over the next several years, and your legislators took a 5% cut in pay for the same duration. Local school boards did their best in holding costs steady, and succeeded in such a way that the state was able to set the statewide property tax at $0.86 and $1.35, two cents lower than planned.
We also closed that $155 million gap without threatening the lives and well-being of our neighbors who have seen the darkest underside of this recession: our elderly, our children with special needs, our disabled and our unemployed. It was hard enough to close this gap without an increase in broad-based taxes, but we felt it incumbent to protect the programs that are seeing unprecedented demand — not only because it was the right thing to do, but to acknowledge that the short term gains would be wiped away in the very near future with the larger costs of dealing with these issues in the most inefficient ways possible. In-home care or nursing home care? Community health care services or emergency room services? I think we made the right calls.
But there were difficult decisions to make as well. An example of this was the Unemployment Insurance bill. How do we fix a problem that was thirty years in the making without hurting business or the unemployed? We can’t — and so the compromise made between the General Assembly and the administration shares the pain. Businesses will begin to see their premiums corrected to levels closer to today’s median income level, and the unemployed will begin to experience a one week delay in receiving benefits in 2011.
The Legislature also restructured and unified our judicial system in a way that will guarantee our right to justice for years to come. The Capital Bill, which funds state projects, will provide jobs throughout the state and the Transportation Bill, still the recipient of ARRA money, will fund more roads and bridges improvements. We see it here in Waterbury with the ARRA-funded sewer project in the Village, and we will see improvements to the railroad crossing on Demerritt Place that will enable Green Mountain Coffee Roasters to expand again in our downtown.
And, finally, we banned texting while driving for all and cell phone use for junior operators. We expect this law to improve the safety of our highways and roads. We also created a process and criteria for the recognition of our Abenaki citizens in a way that we expect to provide them with the dignity they deserve after these many years of fighting.
While it is a relief to have finished our work for the session, it is clear that we will have as much if not more to do next year, no matter who sits in our seats. This is an unprecedented era of recession and lowered revenues, at least in most of our lifetimes. There will be more restructuring of our government, and we will need your input more than ever. Please remain in touch and feel free to share your ideas.
Richmond Times Ink, June 2010
The 2009-2010 biennium finished with a rush late on Wednesday, May 12 — the big bills were negotiated between the House, Senate and the Douglas Administration in a way to avoid vetoes. The bills — the budget, the tax bill and Challenges for Change — represented compromises that held plusses and minuses for all of us. There are many things in each that were positive and many things that were difficult to give. But compromise we did, and in a way we were certain will bring both the best and “not the worst” to fruition.
An example of this was the Unemployment Insurance bill. The UI trust fund has run out of money and in order to bring it into balance, we are borrowing money from the federal government. We are not alone in this — nearly every state is doing so. In fact, we are among the last to have to borrow. As nice as that sounds, however, we are still in a position of need. The fundamental problem with the UI fund, coming into the session, was that the “median” salary used to compute the insurance premium had not risen since the early 1980’s. The original intent was to have this median rise as salaries rose, which makes sense when benefits paid out have to match present day costs. This lack of indexing, however, was a flaw that was exposed during this economic meltdown: we had not collected enough premiums to cover a period of major job loss. With 20-20 hindsight, requiring the median to rise to today’s level of $21,000 would have provided every single penny to see us through. But no one foresaw the devastating effects of such a serious downturn on the UI Fund until it was far too late.
What to do? A sudden rise in UI premiums would be damaging to businesses, and asking the unemployed to pay a part of the difference was like adding salt to the wound of job loss. The federal government offered loans at no or low cost, but the state still needed to come up with a solution that would bring the fund back into the black as soon as possible. This fix, for which we were talking about hundreds of millions of dollars, would not be easy to find, not when health insurance costs are rising well over the rate of inflation or when businesses have seen their profits and sometimes equity disappear or when we are experiencing high unemployment.
By the end of the session, the negotiations between the House of Representatives, Senate and Douglas administration had formed a compromise that had something for all of us to dislike, but planned to bring our UI Fund out of the red within a reasonable period of time with fixes that will not take effect for a year or two. Compromise has allowed changes that are far less onerous than proposed and are far enough out so that any unexpected upturn in the economy will allow the most difficult fixes to be mitigated.
The UI conundrum was just one of many this session. The fiscal situation remains daunting for the next several years, and in an year like this, we worked hard to simply hold the line as best we could. If Challenges for Change is given an opportunity to allow cultural changes in how services are provided, it will be more than just a budget cutting exercise. If we can continue to raise revenues in a way that pay for our human services thoughtfully and professionally, we will make it through. And if we can trust our communities to fund their schools in a prudent and positive way, we will retain our excellent educational system.
While it is a relief to have finished our work for the session, it is clear that we will have as much if not more to do next year, no matter who sits in our seats. This is an unprecedented era of recession and lowered revenues, at least in most of our lifetimes. There will be more restructuring of our government, and we will need your input more than ever. Please remain in touch and feel free to share your ideas.