I attended a day-long fiscal briefing at the Statehouse on November 20th, where the budget challenges that face the legislature upon our return were made clear. The gap left by declining Federal funding and the absence of “one-time money” is projected to be around $72 million just to maintain current programs and services.
In addition, Treasurer Beth Pearce explained the urgency in correcting a structural deficit in the retired teachers’ healthcare fund, which is currently paid out of the retirement fund. The full presentation is available online. Treasurer Pearce summed it up in plain language by asking legislators if they had two credit cards with balances, one with a high interest rate and one with a low rate, which one would we pay first? Ignoring this unfunded liability is only kicking the problem down the road, but fixing it will cost around $20 million, and increase with inflation each year. The timing is difficult, but Treasurer Pearce succeed in impressing upon me that ignoring this issue will only make it worse.
The news wasn’t all bad, thankfully. State Economist Tom Kavet shared that revenues were coming in slightly higher than anticipated. The long foliage season and great weather this fall helped to boost tourism and related tax revenues, among other factors. This is by far the slowest recovery from a recession the country and Vermont have experienced in at least a century. But we are recovering, and Vermont is doing better on several economic indicators than other New England states and New York.
Signals from leadership indicate little political will for increasing revenues, but it’s nearly impossible to imagine how $70k-$90k can be cut from existing programs and services without causing extreme hardship for Vermont’s most vulnerable citizens. The budget process promises to be an even harder negotiation than last year. I will do my best to communicate the current thinking of the money committees so St. Johnsbury voters can weigh in on the options.
The Joint Fiscal Office reports and presentations are all available on the Legislature’s website: http://www.leg.state.vt.us/JFO/reports.aspx#LegBrief112013
Last week the Vermont House completed our toughest assignment of the session: passing a budget and raising the revenue needed to fund our collective priorities. Budget-building is the ultimate exercise in compromise, and seasoned law-makers are calling this the most challenging budget they’ve ever worked on. Continue reading
It’s been a while since my last update – as we approached crossover the pace picked up at the Statehouse. Here are some highlights of key legislation passed by the House:
Last week the Transportation bill was presented on the floor and passed on a vote of 105-37. During floor discussion members discussed the difficulty of asking Vermonters to pay more at the pump. The Transportation Committee had clearly invested a great deal of time and thought into a solution that would help us maintain our roads and bridges with the least amount of fiscal pain possible. The bill represented a blend of cuts and revenue generation – enough to ensure that VT could draw down substantial Federal funding that would have been left on the table. Overall, the bill represents an $800,000 cut in spending over last year. We elected to change the way we collect gas tax revenue. Beginning in May 2013, we will transition to a “half-and-half” system that taxes gasoline sales with a percentage of cost and a cent-per-gallon formula. We established a floor and ceiling for these amounts, but roughly it translates to a 6.9 cent increase in 2014, 7.7 cent in 2015, and 8.8 cent in 2016. One final note, 1/3 of our gas tax is collected from out-of-state drivers. By way of comparison, NH looks to be on track to pass a $.15/gallon gas tax increase. Continue reading
Are you filing a Homestead Declaration, Property Tax Adjustment Claim, or a Renter’s Rebate? Those are all due when your taxes are due on April 15th. It’s crucial to file so you pay the right amount of tax or a receive a rebate if you qualify. Find forms, instructions, and ways to contact the VT Tax Department with questions right on their website: www.tax.vermont.gov.
This week in the House Judiciary Committee we voted out two bills. The first, S.2 was a bill that originated in the Senate and was guided by input by the Department of Corrections, the Judiciary, the Defender General and State’s Attorneys to clarify policy and create uniformity regarding sentence calculations.This legislation was prompted by the discovery of an offender who served a significantly longer sentence than he should have due to confusion on how to calculate minimums and maximums when concurrent or consecutive sentences are in effect. We also voted out H.41, the pension forfeiture bill. This bill passed the full House on Friday with a voice vote. Continue reading
This week the Judiciary Committee continued exploring policy considerations in H.41 (public employee pension forfeiture) and H.65 (good Samaritan – drug overdose). At first glance, the pension forfeiture bill seemed straightforward: if a public official “steals” (larceny, fraud, embezzlement, false pretenses, etc.) in connection to their employment they stand to lose some or all of their publicly-funded pension. But as we took testimony and considered the nuances of the bill, some serious complexity emerged. Should financial crimes be held to a higher standard than other egregious breaches of public trust, for example teachers or corrections officers who abuse those entrusted to their care? Should forfeiture be limited to felony crimes or include “course of conduct” crimes that might be misdemeanors? Should the bill be prospective or retroactive? Judiciary Committee members generally agree that only felonies should be included, and that the law should be prospective. This means the law will only start to have teeth several years down the road when pensions have accrued value from the law’s effective date. Continue reading
Last week the House convened briefly on Tuesday and Friday, allowing more time for committees to delve into the issues facing us this session. In the Judiciary Committee we took more testimony on H.65, the “Good Samaritan” bill that would grant limited immunity to people who seek emergency medical help for someone experiencing a drug overdose (illegal substances or underage drinking). We heard from a substance abuse counselor from the Howard Center in Burlington, and two people in recovery who had both survived overdose. Their candid testimony helped the committee understand the grip that addiction has over decision-making. We also heard the concerns of the law enforcement community and a handful of State’s Attorneys. The emphasis of the bill is the preservation of life, but we also considered the possibility that along with emergency medical care the hospital might provide an additional chance for treatment and support to be offered to addicts.
We also continued our exploration of the pension forfeiture bill. There are a number of complex policy questions to answer, including: which crimes should be subject to possible forfeiture? What mitigating factors should be considered when deciding whether to order pension forfeiture? In this discussion – as in all to date – the committee is diligent in pursuing policy solutions that balance compassion, fairness and accountability. It has been an incredible learning experience so far.
The second full week of the legislative session was defined by two major budget events. First, the House passed the Budget Adjustment Act, to align the budget with updated projections for revenue and expenses. These adjustments were more or less balanced, or “revenue neutral.” It was clear that the Appropriations Committee had invested considerable time and attention in weighing the changes requested by various departments of government – even starting before the rest of the legislature to get it done. Details can be found here: Joint Fiscal Office – Budget Adjustment Summary.
Then on Thursday the Governor outlined his 2014 budget in the annual budget address . Governor Shumlin repeated themes from his inaugural address, with a strong emphasis on education and job readiness. The legislature now gets to work identifying our priorities and looking for places where we align with the Governor and where we might propose alternative policy approaches.