Saturday, April 5, 2014

Legislative Update, April 5, 2014

Legislative Update

Rep. Anne Donahue

April 5, 2014


The increase in Northfield’s education property tax rate by more than eight cents may come as a rude surprise to voters who supported a school budget that was half a percent lower than last year’s.

Northfield was one of 43 towns on a list presented on the House floor last week that decreased their budgets and yet will face an increase in the actual homestead rate. It epitomizes the problems with our current financing system.

How could this happen?

The short story is that what we pay comes as a blend of three factors: our local budget, the combined statewide school spending budget, and that “common level of appraisal” factor. If a majority of school districts around the state increase budgets, than the cost for every taxpayer goes up, since the state-raised money is distributed equally. The legislature had no choice but to increase the property tax rates to raise the money voted in by school districts.

That is made more complicated by the estimate of a town’s current property values compared to the length of time since its last reassessment. Northfield’s rate goes up eight cents instead of the statewide increase of four cents because its common level of appraisal has dropped another 3.4 percent since last year. Reassessment is now occurring but not complete, so current figures are considered outdated.

What does the legislature intend to do about the financing system? Once again, nothing this year.

Does a new funding mechanism really matter, if we haven’t gotten a handle on the statewide increases in budgets that occur above the level of inflation and despite fewer students?  The funding bill this year did make a few tweaks that put more pressure on voters to take a hard look at increases, but those won’t bring about any dramatic changes.

A legislature can never force a future legislature to do anything, so in these final weeks of the current biennium, nothing can be put in motion even for next year. The best we could do was in the strength of “intent” language for working on new approaches.

We could vote for the bill as presented, expressing an intent to work next session to create a system that relies more heavily on a progressive income tax. We could have voted for an amendment that expressed an intent to develop a new system, and that repealed the current system in two years.

A repeal itself could be repealed in the future, but would require an affirmative vote to retreat from the intent, thus making it a bit stronger than the language in the bill. I voted for the amendment, but it was defeated in a party line vote.

New School Governance?

A pending House bill would create much larger school districts, thereby reducing local control, to the extent that any remains. A single school board with representation from all of the towns would decide the district-wide budget.

The idea supports both economies of scale and broader opportunities for students.

It would not be fully implemented until 2020, with opportunities initially for towns to present voluntary proposals for expanded districts. It is late in the year for such a major change to get through both House and Senate, so perhaps it is only being floated as a trial balloon.

Nonetheless, Rep. Patti Lewis and I touched base with some of the Northfield and Berlin school board members, and the general sense is that this is ultimately something that needs to happen, so the process should begin.

Minimum Wage

The arguments for a significant increase in the minimum wage are compelling. The value of a hard day’s work should at least merit enough pay to live above the poverty line, and investments in this direction are far superior to state subsidy programs for those who do not.

Were that it was so easy a decision.

The cost in wages to achieve this in Vermont have been estimated by our Joint Fiscal Office at $30 million. To get a sense of this scope, I asked Joint Fiscal what this would equal in terms of the sales tax. It would amount to roughly a half a percent, in other words, a change from six to six-and-a-half percent on the general sales tax, and from nine to nine-and-a-half percent on rooms and meals.

I thought this analogy could be useful (despite being highly imprecise because of many complicating factors) because an actual minimum wage increase will largely be paid for through an increase in the costs of goods and services.

Small businesses are afraid that such a margin of change could tip the scales for some of them. Often their prices are already not competitive with big chains, but they survive because of convenience for those in small towns, better service, specialties, and other intangibles that bring value to customers. Bear in mind that in addition, we just voted to increase the non-homestead property tax rate by seven-and-a-half cents, compared to the four cents for homesteads.

The larger issue is the impact of higher prices on the national and international markets where Vermont products are sold.

We currently have the third highest minimum wage in the country, $8.73 per hour, and even other states that are in the process of increasing minimum wages will increase them to less than ours.

Only wealthy Connecticut will move ahead of us in New England with its increase to $9 per hour in 2015. The next closest, New York, will move from $8 to $8.75 in 2015 and then to $9 in 2016.

I could support a staged increase that would keep in the forefront with our neighbors, but I believe the leap from $8.73 to $10.10 an hour in a single year, as proposed in the House, will do more damage than good.

This is an issue that is similar in some ways to the health care system debate. We are not an island, and we are not very large. We operate within a national economy, and we are a pretty little fish in that sea to think we can turn national currents. (How small a fish? Here’s a little nugget. The largest apartment complexes in the country have – in one apartment complex – about 20 percent of the total population of Vermont.)

Marijuana for Symptom Relief, Again

My committee is voting out the House response to a Senate bill expanding our system for compassionate access to marijuana without threat of criminal charges for those with specific debilitating illnesses.

We’ve expanded it carefully over the years, and it has been described as the best and mostly highly regulated system for “medical marijuana” in the country. (It is explicitly not “medical marijuana” in Vermont, which would imply a finding for a medicinal value that it not yet supported by medical research equivalent to that for other medications. I have clearly lost the battle in communicating this distinction to the media and public at large.)

My committee is supporting many aspects of the Senate bill, except for the most fundamental change it proposes. Last session, we approved creation of four non-profit dispensaries to increase the safety of the marijuana sources for those eligible to access it.

The Senate proposed that given the success of that program thus far, in terms of safety and security, we should increase the allowable number to six. We feel that proclaiming success is a bit premature. Two dispensaries have been open for nine months, one for seven months, and one for two months. We are voting against supporting that expansion.

However we are adding language to ensure that nothing in our law precludes development of a new strain, based upon the hemp variety rather than marijuana, that has been achieving apparent success in relieving a life-threatening multiple seizure disorder in children.

Your input is welcome on these or any other of the many issues that will be coming before us in the weeks ahead. Contact me or Rep. Lewis via message at the Sergeant-at-Arms office at 828-2228 or at home at 485-6431 (me) or 223-6319 (Patti Lewis.) You can also use my home email,, or our legislative addresses, or  For access to all of my legislative updates for the session, go to




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