April 24, 2024 Legislative Update

 Legislative Update

Rep. Anne Donahue

April 14, 2024

I was all ready to rant and rave in this week’s update, until I found out that, 

a) the news media had exaggerated the status of a proposed bill and, 

b) major parts of the preliminary draft had already been put on hold. 

We are not going to pop a new education funding system into place with three days of committee review.

It may come as a surprise to know how often legislators must rely on the same news broadcasts the public gets. There are 11 Senate committees and 13 House committees, so keeping track of what they are doing prior to a bill being voted out and reaching the floor is nigh impossible. When a constituent writes to ask about the status of a bill, I can always catch a colleague to find out what’s happening within their committee. I usually also skim the weekly calendar for all committees to get a sense of what they are working on. But that’s a far cry from actually knowing details.

There have been rumors about development of a new education funding formula ever since the catastrophe that struck this year with soaring budgets and voter rejections. But obviously doing that is not a three-day job. Even after much longer work on some revisions last year, one part of the crisis this year came about as a result of unintended/unforeseen consequences of those changes. 

What actually happened in the Ways and Means Committee this past week is that a number of ideas that have been under discussion for weeks were put into a draft in order to see what concrete language would look like. That doesn’t mean that there was an actual bill yet that was proposing those ideas. But the draft certainly lit a firestorm. To clear the air, the committee chair publicly clarified that none of the long-term system changes are on the table for this year. There is not enough time left in the current session to do due diligence on major changes. 

That would have been my rant; now instead I’m letting you know you can ignore the reports. There is now an actual draft bill which, as of Friday, proposes some interim ways to ease this year’s homestead property tax increase by several new taxes and shifts among tax sources. Some of those will be controversial. I’ll mention them without opining at length, since they may or may not remain in the bill by the time it reaches the floor next week:

~Add what is called a “cloud tax,” applying the sales tax to software you purchase and access over the internet. That would raise a projected $20 million annually.

~Add a 1.5 percent surcharge for a “short-term rental impact” tax that would raise about $6.5 million. (A 10% surcharge, raising $24 million, has also been considered.) The majority of those rentals are AirBnBs that homeowners use to raise some added income.

~Increase property tax credits for one year by 15 percent to further reduce the homeowner tax burden for those at $90,000 income or less, who pay in part or fully based upon income rather than house value.

~Increase the higher, separate non-homestead property tax (rental property, business and second homes, most owned by Vermonters and some passed down to renters) to reduce the homeowner rate.

A reminder of where the money comes from currently to pay the $2.3 billion Ed Fund, in rough percentages: 

~non-homestead property tax, 38% (40% minus 2% in current use land exemption); 

~homestead property tax, 27% (34% minus 7% in property tax credits); 

~sales tax, 26%; 

~one quarter of rooms and meals tax, 2.6%; 

~one third of purchase and use tax (vehicles), 2%; 

~lottery, $1.5%; then smaller miscellaneous items.

The long-term proposal that drew such consternation before it was taken off the table for now was to develop a statewide tax that would be used to provide all school districts a base payment per student. The payment would be based on an analysis of what an “adequate education” costs in Vermont. Voters would only consider any added local spending in excess of that base, thus taking most of the local decision-making power away from voters. It would recognize that current local budget votes end up imposing costs on everyone else, and thrifty budgets hardly reduce a local tax burden at all. 

The current draft bill turns that proposal into a task force study for a report back next year.

***

Back to the general fund budget: the Senate is working to finalize its response to the House, and is taking a much more conservative course, pushing back on some of the major new tax and spending bills that the House passed. 

There was an interesting comment by Sen. Jane Kitchel, the Chair of the Senate Appropriation Committee, as reported by VT Digger. She said the budget is where new positions and revenue sources should end up, rather than through individual policy bills, as the House sent over. “We’re going to be building our budget the way we always do — so some of these bills that the House passed will end up being incorporated into the budget,” she was quoted as saying.

It caught my eye because that was what I argued for on the House floor: that we were being deceptive by passing an alleged budget that put some major new expenditures and the taxes to pay for them into separate bills, rather than including them as part of a full budget.

Most other major bills that worked their way through House or Senate are also now being vetted by the opposite body; they will either be accepted, die, or most likely come back with proposed revisions (minor or major.) 

If the changes aren’t acceptable, appointed conference committees of three Senators and three Representatives get to hash it out to seek compromise. This is the end-of-session process that gets highly chaotic. With a May 10 date set for the session’s end, the pressure will be upon us soon.

***

Can the process of compromise and consensus-building work? 

Yes. I give credit to my committee chair for leading us through a Senate bill to reduce exposure to chemicals with significant health risks. It’s a highly important topic, but how to approach it could have been very controversial. Our committee includes seven Democrats, two Republicans, one Progressive, and one Independent, bringing a wide variety of views. We voted the bill out 11-0 because testimony was considered from all sides and incorporated: tackling risks but weighing feasibility of how quickly restrictions could be made effective.

Importantly, we recognized that Vermont is not large enough to be a “market changer.”  If we ban something, our market is not large enough to get manufacturers to change course. We will just lose the ability to get the products and hurt our local manufacturers in the process. Instead, we carefully followed the lead of a few larger states (California, most often) in terms of both the chemicals and the products, as to whether alternatives are available. We also set phase-out timelines based on those factors. 

The intentional addition of a number of chemicals will be banned in 2026 from products with a lot of risky skin contact, namely cosmetics and menstrual products. Cosmetics is very broadly defined: anything “intended to be rubbed, poured, sprinkled, or sprayed” on the body for the purpose of “cleansing, promoting attractiveness, or improving or altering appearance,” with soap as the only exclusion.

Dangerous PFAs (“forever chemicals”) will also be regulated then, from children’s products, clothing and textiles, and cookware. By 2028, the ban will reach artificial turf, which is currently loaded with these chemicals which slough off onto the skin and clothing of those playing on them, as well as into our water tables.

There was one skirmish. On the last day, finishing up the 30-page bill, we were resolving a few final items, including the maximum amount traces of lead that could remain in cosmetics (including in naturally occurring forms.) 

The Senate had sent us the bill saying it had to be under 10 parts per million, the same limit as set by California and others. Washington State alone had recently set the maximum at one part per million, which our local manufacturers said was not feasible. Local environmental groups pushed for that level, and we were split on it.

We came up with a compromise at five. But that was without taking any new testimony since we were in the final “mark-up” before the vote. Testimony is typically not continued for the committee back-and-forth changes on final parts of a bill. 

The day after our committee vote we – and many of our House colleagues – heard outcrys that five was no more feasible than one. We received an amendment proposing a return to 10 and after stalling on reaching agreement, had a vote and agreed 7-4 to accept 10. 

There were some vigorous voices of opposition on the floor and a roll call vote was requested, ending up with 101-28 favoring the revision. After resolving that, the final vote, also a roll call, was 138-0 in favor of the bill as a whole. 

Now, we watch and await whether the Senate will accept our improvements to its bill!

***

The repaving of Route 12 from Northfield (just past the front of my house and just before Cumberland Farms) through Berlin to the Montpelier line is now underway. It will be starting on the Northfield end, with single lane closures with alternating one-way traffic throughout the length of the project. 

If you would like a weekly email updating where the work will be happening that next week, you can email Bethany Oprendek at bethany@bbo-enterprises.com and request to be added to the email list for “Northfield-Berlin STP PS24(1).” If you want to check the status on your own, go to vtrans.vermont.gov/projects/updates and click on the “Northfield-Berlin” project.

***

Speaking of roads, Anyone else on the roads Monday evening?

My brother came up from Maryland for a visit and wanted maximum totality viewing of the eclipse, so we went up to North Troy to avoid the big-town crowds. The return home was going fine most of the way, since we were going via local roads.

Just a few miles north of Montpelier on Rte. 12 south, we were diverted by GPS via back roads to Bailey Drive and hit total gridlock. It took about an hour to get back on 12 via Dog River Road, then it seemed to be clear sailing continuing south.

Just before Chandler Road, GPS gave a “road stoppage ahead” alert and diverted us onto Chandler. Once again clear sailing, until about a quarter mile before Cox Brook Road: dead stop. We inched forward and realized that Rte 12 and Chandler/Cox Brook would have to merge – and then reached Cox Brook and discovered there was a long line of cars there to merge with first, as well!

It looked like it would take an hour or more for that last mile home, so we went west on Cox Brook instead to cross on Aseltine. The stop-and-go line of cars heading south extended endlessly beyond Aseltine! It appears they were all avoiding the jammed-up I-89 Waterbury entrance and then hitting the backlog of cars that was avoiding the Montpelier entrance, all trying to reach exit 5. My brother was driving his compact 2WD car and we had quite the experience with his crash course in Vermont mud driving, but made it easily home by reaching Rte 12 and doubling back north.

Watching from my house, the traffic on 12 was still stop-and-go at 9 p.m. By 10 p.m., it was moving steadily but still an endless stream of drivers. But even all those out-of-state folks were behaving politely, taking turns with merges and even breaking their flow to allow us to cross the Cox Brook one-lane covered bridges when we were headed counter-direction.

A memorable eclipse, and memorable traffic.

***

Thank you for the honor of serving you. Please be in touch with me (adonahue@leg.state.vt.us) or Rep. Ken Goslant (kgoslant@leg.state.vt.us) at any time for questions or input. 

March 31, 2024 Legislative Update

 This past week’s House session should leave all Vermonters reeling, if they have been following the news.

I usually try to avoid speaking in partisan terms in my updates. It is impossible not to, when discussing the action of the supermajority to plow through with $131 million in new taxes in just a few days, while claiming its “balanced budget” was practically equivalent to the governor’s proposed budget.

By refusing to include major expenditures in three bills that passed separately, which caused the need for the taxes, it created a deceptive budget. 

I tried for public transparency with an amendment to include the extra $26 million in the budget we were passing, because it is, in fact, an additional part of the House budget proposal.

It was rejected 97-41, but I was honored by the fact that four Democrats broke from party lines along with two Progressives and two Independents to support it.

The program expansions belonged in a more thoughtful overall budget that kept them in line with our revenues by balancing among priorities. 

They added new positions in the Judiciary to address court backlogs, Medicaid expansions focused on our older, low-income Vermonters, and housing programs, partly to try to add housing units but also for expansions to the emergency housing (hotel) program.

I was deeply disappointed by Medicaid bill because the Medicare support component came from a bill I introduced and believe to be vital, but it jumped levels too quickly and was combined with other expansions so that it cost much more; plus, it was not included in a balanced budget.

***

Pieces of Tax Burdens

In order to re-balance the actual budget, new taxes were required for the general fund. 

Why $130 million in taxes to pay for $26 million in program expansions? 

Because the budget increase in those bills for this year only gets them started. The new taxes coming in will be raising the funds for much larger full costs next year.

It’s like that with many programs and taxes. It takes them a while to get up and running; the impact hits later.

Last year, motor vehicle fees were increased by 20 percent; those are now being felt as renewals come due. The $100 million payroll tax to increase childcare support that was passed last year will go into effect this July.

The historic property tax increase is also looming and in the next week, it seems probable that another new tax will be created in order to reduce that impact.

This would be “property tax relief” to at least a small degree, but it will not be tax relief, because the statewide education funding will still be paid with taxes; just another type. 

All of this comes in the face of significant increases in tax revenues over the past ten years in all categories – increases that far exceed inflation. It is spending, not inadequate revenue, causing the shortfall.

Outside of direct taxes we are also piling on major new costs in home heating when last year’s “clean heat standard” bill kicks in. That will require more electrical energy use, and we will be paying much higher electricity rates, thanks to the most expensive version of revisions to the Renewable Energy Standard bill, also passed last week.

And finally, we moved forward with a bill that will make it harder and more costly to build new housing in most of the state. In the middle of a housing crisis!

***

Taxing the Rich

The new tax bills were developed mostly behind closed doors: presented to the committee of jurisdiction the prior Thursday morning and voted out that afternoon.

They are being promoted on the premise that they are directed only at the very wealthy and big business. That requires a deeper dive.

The income tax increase is imposed only on those earning more than $500,000 per year. Surely, they should pay their fair share.

Those tax filers represent about 3,500 taxpayers. That represents one percent of all income taxpayers. They currently pay 35 percent of all personal income taxes in the state. They are already supporting the rest of us. 

When we demand more, and become the state with the second highest upper bracket tax rate in the country, some will choose to move away, and others will not move in. 

We kill the goose laying golden eggs. At a high tax-revenue-per-person, it only takes a small number leaving to create an overall revenue loss. 

Another of the new tax bills increases the corporate tax rate. The bill would make Vermont the state with the highest corporate tax state in the country. 

We do not live in a vacuum. Businesses choose locations based on costs of doing business. 

And over the past 10 years, the revenues we’ve received from corporate taxes have tripled. If they make more money, they do paying higher taxes.

We are sending a message to businesses: we do not want you, or your jobs, here. 

Some of the new taxes were embedding the program policy bills, even though the revenue goes to the general fund and is not guaranteed to specifically fund them.

I went through procedural gyrations to force a vote on the corporate tax alone before the vote on the full bill. The tax passed, 97-40. 

The housing bill expressed an intent to spend $900 million over the next ten years. The tax on high income, raising $17.5 million in the start-up year, passed 92-43. Of that, only $7 million actually goes towards new housing.

***

The Act 250 Bill

The most contentious bill – one that divided some majority Democrats in the debate from their colleagues – was the “reforms” to Act 250.

Act 250 is our decades-old land planning law that protects the environment through tight oversight of development. 

It has been highly successful in doing that, and the major complaints over time have not questioned that aspect. The complaints have been how unwieldly it is, costing excessive bureaucracy and time, meaning high costs even for good development.

Given the housing crisis, there has been pressure for reform to ensure that we do not have unnecessary barriers for new construction.

But this bill adds them. It creates requirements that most of our smaller communities will not be able to afford as a trade-off for easing the burdens in very small, contained areas in large towns. 

There are no estimates of how much land will be added to the protective class for highly restricted use because the new Environmental Review Board it creates will be setting those higher thresholds.

The most bizarre aspect of the new bill is that the Board that sets the standards is the same body that would hear appeals of permit denials based on those standards. 

That part of the bill drew an amendment from a tri-partisan group of legislators (including me); bill supporters opposed it saying it would “gut the bill” of its intended process.

It failed on an 89-53 vote, splitting the majority party to a virtually unheard-of degree, with 14 Democrats supporting the amendment. Most of them later voted against the bill itself.

*** 

Other Stuff

Those were such major subjects that other bills that would usually make bigger news received less attention – but not necessarily less debate, resulting in several late nights on the floor.

A few key bills included:

A bill expanding emergency housing, replacing past, pre-Covid rules. The changes would go into effect under this year’s budget, then become law next year. 

The former “adverse weather” rule, for example, intended to shelter any person who is homeless in frigid temperatures, would become an automatic entitlement from November 15 through March 15 – five months of the year – under a new “Winter Shelter” part of the bill. 

The policy allowing hotel shelter to be discontinued for criminal activity was not included. Vulnerable individuals would be eligible for more extended time frames. 

Other changes include broader definitions of who is eligible and a requirement that if a shelter is full in one county, the individuals must be given access to a hotel/motel room even if there is available space in another county.

A statewide ethics bill is halfway through the floor debate process. There have been concerns expressed about the new mandates on municipalities, including training costs, all imposed by a state board.

I was very disappointed that a bill that will allow retail cannabis establishments to receive a license endorsement to sell to medical-use patients – which thus includes those under age 21 – did not add language requested by the Human Services Committee (where I serve) to require rules that protects underage buyers in that new environment.

Instead, it added language saying that rulemaking by the Cannabis Control Board must include “rules requiring access for patients who are under 21 years of age.”

***

And Good Stuff

Some broadly supported bills:

A revision of the law on how a person accused of child abuse is placed on the registry, which can be a lifelong impairment to access to many jobs. It maintains the protections for children but improves the fairness of the process.

A new disclosure requirement of flood history for home sales and rentals. I was gratified that the committee included my bill for rentals of lots for mobile homes. 

I will not easily forget the couple I met who were among those who lost everything in the July flooding at the Berlin Mobile Home Park, who had moved in two months earlier with no knowledge of the flooding history. Their home was a wedding gift from their parents.

Finally, after months of Agency of Human Services insistence that no state licensing was required for a new psychiatric residential treatment facility for adolescents that will be funded by the state, I pressed the issue enough so that the agency reversed its position.

Just hours before the House was to adopt bill language to mandate licensing, the agency decided to agree to it. We still included language I drafted prohibiting use of state money to place youth there prior to the licensure. It seemed wise, based on the foot-dragging that had occurred.

***

Thank you for the honor of serving you. Please reach out to Rep. Ken Goslant (kgoslant@leg.state.vt.us) or me (adonahue@leg.state.vt.us) at any time with questions, concerns or input. All of my past updates are available at RepresentativeAnneDonahue.blogspot.com

March 17, 2024 Legislative Update

 In these updates, I typically discuss bills in some depth when they are of particular import or being worked on in my committee. There isn’t nearly space to address every bill throughout the session. But this past week, the crossover deadline, it seems of value to briefly summarize many of them to provide a sense of the breath of subjects being addressed.

Crossover means the last chance for bills to come out from House or Senate committees if they are to be taken up by the other body this year. Many have broad or unanimous support, so they don’t make headlines.

Deadlines are later for the two biggest decisions of the session: what do we spend, and do we raise taxes to do it? There are various tax increase proposals on the table to fund more spending. An example is H.828, which would add a three percent surcharge on existing income taxes for individuals making more than $500,000.

First, a couple of notable bills that passed this week on the House floor: 

A bill on retail theft allows multiple small thefts within the same two weeks to be combined in their value so that if they add up to $900 – the current level to become a felony – they can be treated as a felony. This is a bone being tossed towards being able to claim to be addressing the widespread concerns about public safety and lack of accountability for crimes. On the same day, we passed a bill that allows for expanding the diversion system so that folks can be “diverted” from criminal prosecution multiple times, and have their records expunged. I think diversion is an excellent tool, but not for repeat offenses and not to fully delete records. (Also coming up is a bill that revises the categories for such expungements of records.)

One of the best health care bills of the session passed this week, to address unnecessary administrative burdens that interfere with the time doctors can give to patients. It requires all insurance companies to use uniform categories for prior authorization requirements. My primary care doc once said if we could do this, he’d “dance his happy dance.” Federal law was a barrier in past years, but that was recently solved through a court case.

The sales ban on flavored nicotine products, including all vapes plus menthol cigarettes, also passed. Though these have been banned for kids, kids are getting them from adult purchasers and use is exploding; the bill’s ban is focused on the effort to enhance youth protection by blocking all sales. In an unusual move, the Democratic caucus permitted its members to vote based on individual decisions, so it was a much closer vote than typical contested topics, at 83-53. The menthol ban was particularly controversial, and an amendment to remove it from the bill only failed by a vote of 54-64.

***

Significant bills pending on the House calendar that came out of committees this week include these:

A bill from my committee to formalize and reshape the emergency shelter program. It sets a long-term policy goal of leaving no one behind to live on the streets; creates a Task Force to work on parameters for the first steps; and sets a July, 2026 start date for the initial new structure. (All good.) But as we worked through the new bill under a tight time frame, more and more was added to the mandates in statute for what the new program has to include. All were things that expand the scope of anything we’ve done before – as well as that will massively expand costs. The administration’s rough estimate is in the $50 million range. Just as with the tobacco bill (which will cost up to $14 million due to lost revenue), that doesn’t need to be addressed in the current budget since it doesn’t take effect until next year’s budget. “Let the next legislature figure the money part out.” I voted no.

The bill that first proposed major expansion groups for Medicaid is now pared down to require development of a cost and feasibility proposal. The one part it retained is the financial support for those who turn 65 or become disabled and lose existing coverage when they go onto Medicare. This is an incorporation of the bill that I introduced to protect low-income seniors who have been abandoned by all prior reforms. How much of that new support survives the budget balancing process is yet to be seen. Many of this bills that came out of committees this week have yet to go through the “money” committees (taxes and spending.)

Another health care bill will add to regulation of pharmacy benefit managers: the companies that serve as go-betweens to set price deals for insurance companies and drug manufacturers.

“Neonics” is the shorthand for a pesticide used to protect seeds but that are believed to harm the environment and in particular, the fragile bee population. Their use for crops would be banned under H.706. There are lots of concerns about access to alternative seeds, given our small state market, but the bill mirrors the ban and the 2027 timeline that New York has passed. Given their market power, I’m good with it.

The annual update of laws for our “tax and regulate” cannabis market includes a problematic expansion to allow the medical-card program to include all cannabis outlets. This could vastly expand the places where those under age 21 who have medical needs can make purchases, with some significant resulting risks. It needs an amendment to require regulation on that issue, or I can’t support it.

The alcohol law update is a major disappointment to me, because despite all the discussion about protecting kids from nicotine, the committee with the jurisdiction over this bill refused a health policy addition requested by my Human Services committee to protect youth. Two years ago, we made it legal for convenience store to sell those single-serve spirits that include the same kind of youth-appealing fruit flavors as nicotine vapes. Now in some places we see them turning up in bins next to the candy bars at the checkout. A peach-mango-vodka drink in a can may be side-by-side with its look-a-like flavored peach-mango iced tea. I had a youthful-looking friend go to a local store and buy one of each, together, and he wasn’t carded. My Human Services committee’s request -- the one that was rejected – would have created a small level of protection: prohibit alcoholic drinks to be displayed mixed in among non-alcohol products.

Expect to hear much more about H.687, a controversial approach to addressing how to balance reform to permit requirements for urgently needed housing construction with maintaining our environmental protections. A proposal supported by a group from all parties and the governor did not move forward; instead, this version came out of committee on a partisan vote despite a claim that it is a compromise.

Another significant controversy will play out when H.289 gets to the floor on revising the state renewable energy standard to expedite achieving 100% renewables in 10 years. The Joint Fiscal Office first estimated it would cost $1 billion over that time to implement. It revised its report this past week to an estimate of between $150 million and $450 million, but added, “due to various unknowns – potential technological advances, changes in demand for electricity, adaptations in the ISO-New England grid, actions of Vermont’s utilities in future years, etc. – considerable uncertainty regarding the overall cost and impact on the State budget remains.”

***

A sample of bills moving forward with broad support:

H.173, making it a crime to manipulate a child for the purpose of sexual conduct; H.614, addressing land improvement fraud and timber trespass; H.657, updating communications taxes and fees;

Also, H.702 on improving government accountability; and H.868 for the annual funding of roads and bridges (yes, including, at last, Route 12 from Cumberland Farms on North Main in Northfield on through Berlin to Montpelier.)

H.871 moves work forward on planning how to address the funding needs for a huge backlog of school construction/rehab, while H.873 attempts a compromise on how to move forward on testing schools for PCBs;

H.875 establishes uniform ethics codes for state and municipal officials; H.121 addresses data privacy; H.707 focuses on workforce expansion and development; and H.622 updates reimbursement fees for Emergency Medical Services.

The agriculture committee apparently has less urgent work to do than others. It took testimony on multiple separate days to establish a state mushroom (in line with our state flower, bird, fish, mineral, pie and so forth.) It was a learning tool for a group of schoolkids. All fine and good if you spend a couple of hours to do it. This was a bit much.

***

Thank you for the honor of serving you. Please reach out to Rep. Ken Goslant (kgoslant@leg.state.vt.us) or me (adonahue@leg.state.vt.us) at any time with questions, concerns or input. 

February 24, 2024 Legislative Update

 

Urgency versus deliberation. Inclusion versus inaction. Complexity versus fairness. Unintended consequences. Some of these real-life conflicts in the process of lawmaking are front-and-center before us in the issues we will debate in the weeks ahead.

A report updating the progress of implementation of last year’s Clean Heat Standard bill makes some of these tensions dramatically clear. That was the bill that requires a financially-forced transition away from fossil fuel heating sources. Some believed it would be unsustainably costly; others that it was essential to address climate change; and others also believed it was being imposed far too rapidly.

The Public Utility Commission, working on the first phase to develop the rules that will be brought to the legislature for approval in 2025, had a message in its “check-in” status report this year. The executive summary is worth directly quoting.

“…[M]ost participants have expressed serious misgivings that the quality of the rule and the success of its implementation will suffer as a result of the aggressive schedule required by Act 18…[It] sets such an untenable pace that it will be extremely challenging for the Commission,

the Equity Advisory Group, and the Technical Advisory Group to carry out their responsibilities

in a manner that allows time for deliberative process, thoughtful input from all stakeholders, and

sufficient public participation to design such a transformative, first-of-its-kind, highly complex,

and technical program. The Commission shares stakeholders’ serious concerns that any draft rule … will suffer from the haste demanded [which] … allots mere months to the creation of an unprecedented, complex program with the potential for unintended consequences that impact the lives of all Vermonters…” The full report can be found at: legislature.vermont.gov/assets/Legislative-Reports/Checkback-report-1-FINAL.pdf

There is no indication that the legislature will agree to any delay. Instead, we are now moving ahead on a new initiative to change our current Renewable Energy Standard to require 100 percent renewable sources by 2035. That, according to some testimony, will cost Vermonters $1 billion over the next 10 years.

It does respond to a criticism over both the Clean Heat Standard and our recent past targets to significantly increase electric vehicle use: the facts that shifts to electricity result in demands that our current electric grid can’t handle, and production of more electricity requires use of more fossil fuels and thus also increases greenhouse gasses. So this next bill would block that impact by shifting electric production to all renewable energy.

We are acting in response to urgent issues but creating significant risks of failure at multiple levels. Prominent in my mind has always been the size of our state relative to the impacts caused by others, and thus the fact that when we act alone – or are first off the block – we take on a disproportionate burden that causes danger to our economic competitiveness and thus sustainability as an affordable place to live.

Across Other Issues

The same goes for a plethora of issues in front of us. We are currently looking at new tax sources to pay for ongoing costs of how we want to sustain the costs of our state responsibilities.

The costs of education have skyrocketed this year, for reasons I’ve discussed previously. News media have referenced an average 20% increase in property taxes, but for Northfield it is 24% and for Berlin it is 26%. The legislature is contemplating reducing that harm by raising new funds from elsewhere. There’s also a lot of talk about reforming the whole funding structure and school spending, but that talk has happened many times before, with only new bandages resulting. The efforts at fairness over the years have led to incredible complexities.

There are other reasons for wanting tax increases.

We locked in new burdens to the state budget and on wage-earners last year with the mega-childcare support package and now are looking at needs for significantly greater expenditures to address homelessness, record drug overdoses, mental health, a juvenile justice system in crisis and health care underinsurance. We suspended school construction contributions by the state in 2014 and the infrastructure is crumbling; we hear regular complaints about conditions of roads. The list goes on. These pressures are, at least, taking two other new initiatives off the table for now: a paid leave program, and salary increases for legislators.

But who pays?

In answer to the momentum to “tax the rich” I would warn that we already have one of the most progressive tax rates in the country. The rich do pay more. At last count, 16 percent of our state’s revenues from income tax were paid by the .17 percent wealthiest Vermonters. A full 25 percent of income tax revenues were paid by the next wealthiest bracket, made up of only 2.7 percent of taxpayers. Ergo, 41 percent is paid by the fewer than three percent of Vermonters who represent the wealthiest wage earners.

If we become radically out-of-step with states around us, economic drivers will move out.

Policy versus Cost

The budget raises another question that legislators face based on different committee assignments. Policy committees are expected to make budget recommendations to help guide the decisions of the Appropriations Committee. The Appropriation Committee then must balance among the competing “asks” and also turn to the Ways and Means Committee, which controls tax policy. What will be included in the budget, and when that exceeds the balanced-budget total recommended by the governor, how will the added money be raised?

As a member of the policy committee which oversees all of human services, I’m told that I should be recommending what would be needed to serve the wellbeing of all Vermonters, regardless of total price. While we do identify by priority levels, we are not expected to look at the bottom-line increases in the budget. That’s because we don’t have the context of the other parts of the budget, nor the decisions about the total taxes that will be raised to be available to pay for it.

If I vote now for ideal policy – regardless of cost – wouldn’t it be duplicative to vote against the future budget, no matter what taxes it requires? Usually, I think not since I can argue the money should have come from other budget lines rather than increased taxes. This year, knowing that we are dealing with revenue downfalls, that doesn’t seem legitimate.

Nicotine

A similar issue has already been through my committee and will be up for a full floor vote this coming week: the clamping down on flavored vapes and menthol cigarettes. As a public health policy, I voted in support of the bill; our committee vote was 10-0-1.

Vape products are getting into the hands of schoolkids because adults are buying them for them. These are incredibly addictive, and we know that the majority of lifetime nicotine addiction occurs if it starts at a young age. Menthol, by blunting the harshness of tobacco, also increases the appeal. If adults are the suppliers, it seems that we need to take these specific products off the adult market in order to protect kids.

But we didn’t look much at the budget consequences. That wasn’t our jurisdiction. The Ways and Means Committee looked at it last week and it will likely end up costing some $14 million to implement in direct lost tax revenue. That committee supported it on a 7-5 vote, and pushed back the implementation date by a year, to January of 2026. That’s a sly move: it means we can ignore it for the upcoming budget year, since the lost revenue won’t begin until halfway through fiscal year 2026’s budget. Clearly, the long-range cost benefits are likely massive in future saved health care costs, but that’s more amorphous.

In the shorter term, that $14 million annually is equal to thousands of nights of emergency shelter stays; hundreds of new recovery beds for those fighting addictions; one major school renovation every year; or more than half the annual cost of the universal school meals program we passed last year.

Feed our schoolchildren, or protect them from nicotine addiction? These may not be good things to present as an example of choices. But one way or another, government needs to make choices.

There are some choices I make on bills every day that I see as decisions that clearly represent my values, and thereby, represent the choices you made in the aggregate by electing me as a person closest to meeting your own values.

They are not all as clear, and that is why your input is so important to me. Please reach out, especially during the coming town meeting break. I’ll be at town meetings in both Berlin and Northfield, so it’s a great time to catch me for direct conversation.

***

Thank you for your support. You can always reach me at adonahue@leg.state.vt.us, and Rep. Ken Goslant at kgoslant@leg.state.vt.us. It is an honor to serve you.

February 10, 2024 Legislative Update

 

Now that the governor’s proposed budget is before the legislature, my committee has pivoted to a deep dive into the Human Services elements of the budget.

We are all facing an average property tax increase of close to 20% on the one part of the state’s overall budget that the legislature has little control over: education spending. This is adding to the pressure on the Democratic majority to hold down increases in the general fund budget, yet additional new taxes are still under consideration to pay for other increases. The governor’s budget holds growth to match existing increases in revenue, but in reality, that will result in some cuts in services because just paying overhead absorbs those revenues.

That’s the dilemma our school boards have faced, and their response has been to increase budgets to meet perceived actual needs. The tally from around the state is a proposed $240 million increase in budgets, compared to a usual average increase of about $30 million. While local voters approve their own budgets, each district also bears a big part of the costs of what every district does in combination.

***

How Did We Get Here?

There are multiple factors, ranging from inflation to the desire to backfill lost federal bonus dollars. One of them, however, was directly tied to the change in “pupil weights” the legislature made last year. One student does not equal one student, when it comes to counting them for the purpose of the state’s contribution to a local budget. They are “weighted” based on the fact that some students cost more to educate in order to spread the statewide funds equitably based on actual costs.

Towns such as Berlin and Northfield did not see any significant change, but some wealthier districts lost pupil counts. They were protected from mega-one year tax increases by a cap set on how much would be attributed to them, so that the increase would be spread over five years. There was an unexpected result of that 5% cap. Other school districts took advantage of the cap to bolster their own budgets, knowing that they could go above 5% without increasing the local share. That was a big contributor to the $240 million statewide increase.

It’s important to note that neither the Northfield nor Berlin districts did this and as a result, will not be harmed by the current legislation that is attempting to fix it. That bill is now moving through the legislature, and towns that made larger budget increases will have to pay more on their own; the hope is that they will whittle some of that down, with the result of reducing that 20% statewide increase at least by a bit.

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The State Budget

While the education budget is in the hands of the cumulative votes of school districts, the rest of the state’s spending falls in the lap of the legislature, which faces all the same cost pressures. Do we cut services to balance the budget? Do we increase taxes to keep all else level? Do we meet new needs by greater tax increases? Which are needs, and which are merely desires? How do we choose among these priorities? 

This is the time when I truly despair in facing my own committee’s work. The fact is, we do have real needs that are not being addressed. Our committee has the job of identifying the amount of money needed to address them, and then leaving the Appropriations Committee to choose from what can or cannot be down. Approps must weigh those against all the other components of the budget: funding to address climate change, the judiciary (which still has a major COVID backlog), all of health care, investments to improve the economy, just to name a few. Next week, we face a bill that will add major costs to electric generation in the important interest of achieving cleaner energy production. Where does that fall on the difficult priority item list?

Homelessness, with increases that have come about primarily because of decades of lack of maintaining adequate housing stock, is high on our agenda. Virtually everyone agrees that the top priority is increasing the backlog in housing unit construction. But that takes time, and it is how to bridge the gap in the interim that is in dispute.

The governor’s budget proposes to eliminate open access under the “cold weather exception.” It would keep the exemption only for households with children, adults over age 65, third trimester pregnancy, and those on disability income. The proposal goes further than just a return to pre-COVID criteria, because the 28-day per year limit would be reinstated, but the special 84-day limit that applies in certain catastrophic situations would be eliminated.

These limits only apply to the “emergency housing” criteria, meaning receiving a voucher to stay in a hotel. There are no such exclusions for staying in an emergency shelter. A major problem, however, in that we do not have enough shelter beds to accommodate everyone who could otherwise be left on the streets.

The governor’s budget adds millions to increase these shelter capacities, but even those take time to open. By next winter – even under the assumption that some folks can find housing on a friend or relative’s couch – we would likely be seeing more people with no access to shelter at all. There are some being turned away on the coldest days even this winter, for lack of capacity. Experts do agree that mental health needs, addiction disorders and the like contribute to the challenge of stable housing but are not the primary reason for our crisis, which is simply not having enough housing.

If this was our only state need, we could probably find a way forward. By holding the budget at a level of growth that is below inflation growth factors, numerous agencies funded by the state are effectively facing cuts. These include our skilled nursing and home health agencies, the agencies which provide mental health and development disability supports, and support to children through such as our parent-child centers.

As with schools, we have some staggering and critical “deferred maintenance” costs. The IT systems supporting child welfare, for example, are the very oldest and most antiquated in the country! A worker addressing a child taken from a home for abuse can’t open just one computer file to check on history or even the child’s current status. It puts kids in danger, and there is almost certainly a tie to the fact that we have a rate of removing children from families that is high above the national average.

Our juvenile justice system is scrambling without the capacity to provide secure places for children in major crises with high levels or risks of violence. That is driving plans to build new institutional beds for them in a way that I seriously fear is a pendulum going out of control in the opposite direction. In the next two years, plans are rolling out that will add 42 locked institutional beds to hold or treat those ages 19 and younger, contrasted to about 24 currently.

I am not trying to make a case for major increases in spending. We can’t achieve that. But it does means assessing every expenditure carefully and identifying the truly highest needs. One item that has laid our budget so thin this year has been decisions made over the past several years, such as the massive investments in making childcare more affordable. It was an important investment that had wide support, but that I voted against because of the weight of contrasting needs.

And every citizen and each legislator representing their constituents sees the priorities differently. Democracy is about coming to sometimes unhappy outcomes. The weight of statewide voter opinion right now – based on elections – is to spend more to achieve a greater number of priorities. I believe we need to be far more discriminating in how we spend tax dollars, but I have my own priorities that cost money, and if each of everyone’s were fully met, we’d collapse financially as a state.

Based on strong constituent input, one of mine is to reduce taxation of military retiree benefits, which comes at a very small loss to the state’s tax revenue. In the latest survey data, Vermont ranked a dismal 50 out of 50 among states with financial stability for military retirees. These folks are often still in prime wage-earning years and can fill critically needed occupation gaps and contribute to the tax base if we don’t chase them away.

My other is the Medicare cliff: the way Vermont drops health care support like a hot potato when someone with low income turns 65. There was an excellent news piece describing this last week in VPR, which you can read at: https://www.vermontpublic.org/local-news/2024-02-02/capitol-recap-some-low-income-vermonters-face-sudden-spike-in-health-care-costs-when-they-turn-65

***

Thank you for the honor of representing you. Please reach out anytime to me (adomahue@leg.state.vt.us) or Rep. Ken Goslant (kgoslant@leg.state.vt.gov) with questions or input. You can receive my biweekly reports by email request.

January 28, 2024 Legislative Update

 

An old adage says, “a good compromise is when both parties are dissatisfied.” My Human Services Committee voted 10-0-1 this past week to pass a ban on all flavored vape products, which are getting kids rapidly hooked on nicotine. The ban is effective next January.

Check in at any school. Marketers even sell hoodies that have tubes in the hood strings so that they can vape surreptitiously. Why ban an “adult-only” product when it’s already illegal to sell to those under 21? The data says kids aren’t buying nicotine products from stores. They are getting them, overwhelmingly, from adults.

The bill came to us from the Senate, and it banned many more products from sales in Vermont. It included all menthol cigarettes (they reduce the harshness of the tobacco and make it easier to take up) and all other flavored tobacco products (pipe tobacco, etc.) We removed the adult-use ban on the “all other” tobacco products, where there was no evidence it has drawn kids in. We did also increase the penalty on those who give access to those under 21.

We were split on the issue of menthol cigarettes. (The federal government already bans other flavored cigarettes.) The evidence wasn’t as strong on whether it has special appeal to youth. In addition, adults in minority groups prefer menthol. Were we discriminating against them for their particular flavor of choice in contrast to other adults? Yet some in those groups urged the ban, saying their members were targeted by tobacco companies to get them addicted in the first place. The compromise was to defer that ban for an added six months, until July of 2025, and to ask the Health Equity Advisory Council to weigh in. We can repeal it next year, before it takes effect, if that is the recommendation.

The bill has to go through the House tax committee before it gets to the floor. My committee makes public health policy; they make tax policy. The estimate is that we will lose about $4 or $5 million in tax revenue with the vape ban, and perhaps double that when the menthol ban goes into effect.

A big struggle for me was the question of consistency. We have two other “adult-only” substances: cannabis and alcohol.  We only recently legalized cannabis, saying “prohibition doesn’t work.” Two years ago, we allowed convenience stores to start selling fruit-juice-flavored spirits. Alcohol companies have jumped on board, and you can now see products like “Sunny D” spiked with alcohol on the same shelves. Surely, this, too, is particularly appealing to youth, and alcohol misuse is a major social problem, scooping up kids at even earlier ages than vapes. Why target one substance for a new prohibition. I had an “aha” moment from one person’s testimony, who pointed out that we do ban some of those other products when they are higher risk, such as limiting the percentages of alcohol or THC. In the same way, we are further regulating nicotine, not banning it, regarding the highest risk types.

However, I argued to tighten up regulations to protect youth on the other products as well. The other committee members strongly supported this in principle, but not under our House rules, which carve out “jurisdiction” of subjects. The outcome is that we are sending a strong Chair-to-Chair memo urging that the correct committee looks closely at these issues as they take up related bills this year.

Our committee was flooded with hundreds of emails urging us to pass the Senate bill, and almost an equal number opposing it. Almost all were the identical message written by lobbying organizations. Each of us did the same thing: sorted through to find the ones from our own constituents and deleted the rest. (Some were even from out-of-state.)

I received some from my district on each side of the issue, and a few that were written personally, along with several phone messages. Getting views from residents of Berlin and Northfield is really important to me, and I appreciate everyone who contacted me, even if I didn’t end up fully sharing your perspective. I tried to answer each individually, but some phone messages came to the statehouse without return numbers and some emails with only the lobby group’s return address. Alas, with cell phones, the days of help from the phone book are gone.

***

This week’s biggest floor action was the budget adjustment act, which increased the current year’s budget by $31 million. Supporters argued that the budget was still balanced, since state revenues had increased slightly over the projections from last May. The problem is that the coming year’s budget will be much tighter: less revenue as related to ongoing needs plus inflation. The governor presented the fiscal year 2025 budget this week with a mere 3.5% increase, keeping it balanced without new taxes.

The budget adjustment is a tool to shift money midway through the year if less was spent in one account and more is needed in another. But if anything is added to the base it limits our opportunity to identify the greatest needs as we work through next year’s full budget, because we have added $31 million that is locked into the “adjustment” lines items.

There was a lot of pollical posturing on the floor saying those voting “no” would be denying help to their neighbors for flood relief funds. Voting “no” actually was only to send the bill back to remove some increases, not necessarily flood aid.

Most in contention was the extension and major increase in funding for the motel program for homeless individuals. There was a hue and cry about throwing children and the elderly on the streets on April 30. That was the extension we voted on last spring for the phase-out of the COVID program. About half of those 1,600 or so households have not found housing yet.

That wasn’t the key issue, however. What the bill does is to reverse the decision last spring to end the open-door COVID policy for those who were NOT in those vulnerable groups and to return to pre-existing criteria. It reverses the phase-out and returns to the COVID emergency standards.

For example, until the COVID exemption, those who were not in emergency circumstances had time limits on emergency housing. The exception was for “adverse weather,” providing shelter for anyone in need during the winter months regardless of the reason for having lost housing.

Time limits are now gone, through June 30, and the adverse weather policy applies at any temperature.

This topic is in my committee’s jurisdiction, and I supported extending the existing protection for those more vulnerable folks that we were housing based on COVID. However, we heard nothing about the proposed policy change to re-open to all groups coming in, without limits, until we were asked to vote on it half an hour before it was proposed to the Appropriations Committee, which then itself had only a half an hour to review it. It was all vetted in private leadership conversation, not within the committees. The scope of the housing change was not fully explained on the floor, and by House protocols, I could not get up to speak against a decision of my own committee. Both Rep. Ken Goslant and I voted against the budget adjustment as presented, but it passed on a 112-24 vote. It now goes to the Senate.

***

The updated bottle bill – vetoed last spring by the governor – only received 17 of the required 20 votes needed for an override in the Senate. Almost as many Democrats as Republicans voted against the override. Many of us would like to expand our very successful deposit policy to include more glass and plastics but the bill also completely changed our current system. I voted for the bill and the override in the House, but with a great deal of trepidation over the changes. I am somewhat relieved that the override failed in the Senate. It clears the path to expanding the bottle bill more in line with the existing system.

January 14, 2024 Legislative Update

 

Legislative Update

Rep. Anne Donahue

Jan. 14, 2024

 The major action on the House floor last week was passage of the “safe injection” site bill.

It legalizes the operation of facilities where people can bring illegal drugs to be used under the supervision of health professionals. The purpose is for the ability to have an overdose addressed rapidly.

Only one other state has passed such a law, and its own center has not yet opened. Several are operating in Canada. Our Health Commissioner testified in my committee that the research was insufficient to establish that they are a benefit: we’re putting passengers on a plane that is still under construction.

My greatest fear is that it will cost us more lives than it will save. The public messaging is that there are “safe” (and legal) ways to use drugs. After all, the state is creating the funding for them.  How many more people will feel less afraid to try highly addictive substances? We don’t know. Both Rep. Ken Goslant and I voted “no.”

There was a bright side to the 2-day debate. Those who opposed the bill identified some serious gaps. Those who supported the bill could have passed it “as is” because they represent a (veto-proof) super-majority, but were willing to listen and accept amendments to strengthen protections. One of our Independent members commented on the floor the next day about how refreshing it was to see collaboration, despite disagreement.

As a result, the bill added the requirement that local community leaders must vote to allow a center before it opens there, and that strengthen requirements for the staffing of such sites. The bill did require development of operating guidelines that a center must meet to receive approval to open. But once approved, there was nothing that required ongoing compliance with the guidelines. I drafted an amendment that would terminate the legal immunity of a center if it fails to meet good faith compliance, and that was also accepted.

Left unresolved was the concern about the lack of any age restrictions or special guardrails when a minor comes to a center to use drugs. The bill now goes to the Senate.

***

In what feels like a radically inconsistent direction, my committee is working on a Senate bill that would make all flavored tobacco products (cigarettes and vapes, and including menthol flavors) illegal to sell in Vermont. The purpose is to protect youth, who have latched on to the appealing vape products despite the fact that it is already illegal to sell to minors.

We would, in effect, shift from a “tax and regulate” system for the products into a prohibition: an exact opposite of the successful lobbying just a few years ago to change from prohibition to “tax and regulate” to permit adult choices to use cannabis. The slogan then was, “prohibition doesn’t work.”

While alcohol is highly regulated, we also recently began permitting single-serving products to be sold at any store. Ergo, the new market in convenience stores for appealing, flavored alcoholic beverages right by the check-out… while tobacco must be inaccessible except by a clerk.

Tobacco kills in huge numbers, over time. Drugs are taking lives all over the state through immediate overdoses. But alcohol misuse has never changed in its level of serious harm. There is a strong parallel to the issue of prohibition versus regulated adult use versus protection against youth addiction for all of these mind-altering substances.

I agree on how crucial it is to prevent the targeting of youth for these enticingly flavored tobacco products (“cotton candy,” is one), likely resulting in lifelong nicotine addictions. But given existing gaps in protection regarding cannabis and alcohol targeted to enticing young users, I will be struggling with whether I can get on board with this bill unless we also address some of those gaps in other adult use substances.

***

It was great to see Rep. Ken Goslant’s bill to address one of the (many) unintended consequences of our efforts to remove adult criminal processes for those teens who need stronger guidance rather than punitive measures. Our state’s attorney has told us that high-level drug dealers are now focusing on recruiting help from teens, since they will be sanctioned less severely if caught dealing. Ken’s bill would make it a specific crime to “employ, hire, use, persuade, induce, entice, or coerce a minor” to sell drugs. It’s one of many efforts this year to respond to a plethora of unintended consequences being seen from a variety of laws passed over the past several years that are helping to drive increases in crime rates.

***

The legislature and the administration continue to struggle with addressing how to restructure the ways we help protect Vermonters who lose housing during this time of a severe housing shortage. Increased efforts over the past six months have reduced by almost half the number of existing households living in state-funded emergency hotel rooms, but new needs have continued to grow.

We know some of the hotels exploited the COVID crisis since the state had its back against a wall, but our committee heard one budget figure last week that was shocking. Many of them have been charging the state a rate that is much higher than the standard rate for anyone else walking in the door, an average of $132 per night. At the same time, they don’t include the amenities you or I would get if we were paying a lower rate: room cleaning, breakfast buffets, etc. – and the higher cost includes none of the social service supports these folks need to stabilize their lives.

By aggressively clamping down on this, funds can be freed up to transition to shelter programs that offer direct assistance to people in moving out of the emergency system more rapidly. My committee will also be beginning work on a bill to reform the entire “general assistance” program for housing.

***

I was thrilled to hear a new report from our off-session Government Accountability Committee, because its recommendations tackle some issues that have frustrated me for years. A few examples:

Every year, with complicated issues that we can’t address in the short time available, we direct that the administration to prepare an in-depth report, or we create a study committee of legislators to work off-session to take testimony and recommend next steps. (Or some combination of those.) All too many times, these reports never even get read, let alone acted upon. New issues take over a committee’s time, and the level of interest in last year’s issues has dropped.

Another example: We pass laws that the administration is supposed to implement. But does it always actually happen? We don’t follow up to find out; there is no tracking mechanism in place (unless we asked for another of those reports that take resources to write and that don’t get read…) And when we draft new laws, do we actually look into the history of what was done before? Often, not.

Then, there is the budget. Every year, instead of discussing all of the funding of all of the state’s programs, the focus is almost exclusively on what are termed the “ups and downs.” Where is the governor proposing increases, and where is the governor proposing cuts; do we agree or do we want different priorities funded? The big picture is simply too big to review… but we need to create a better overview mechanism if we are going to be accountable to Vermonters for how their taxes are spent.

You can see the full report online at legislature.vermont.gov/assets/Legislative-Reports/SGAC-Report-Final-2023.12.13.pdf. Hopefully, we as the legislature will also pay attention to reading and implementing items in this report.

***

My bill requiring prominent notice to those renting a lot for a mobile home if it has a known flooding risk has been reviewed by the Housing Committee and will likely be addressed as part of a package of flood-related bills. The bill I introduced about businesses maintaining cash options for customers will be reviewed in the Commerce Committee next week.

What I am most pleased about, however, is that the issue of seniors who go onto Medicare and lose significant financial support for their health care as a result (the opposite of what we assume and would want!) has become a priority in the Health Care Committee, with testimony beginning next week. I introduced a bill on this last year, co-sponsored by a Democratic colleague to show bipartisan support, and it has gained significant momentum.

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Thank you for the honor of representing you. Please be in touch with me (adonahue@leg.state.vt.us) or Rep. Goslant (kgoslant@leg.state.vt.us) at any time. You can access all of my legislative updates at representativeannedonahue.blogspot.com.