Sunday, April 17, 2016

Legislative Update April 16, 2016

Legislative Update

Representative Anne Donahue

April 16, 2016


Our target closing date for the session is May 6, which means we are finishing our House committee work on bills sent by the Senate in anticipation of several busy weeks in conference committees with the Senate working out differences. Politics will be at its highest levels in these final works, since it will be the last chance for various priorities to make it across the finish line.

Already, the marijuana legalization bill is taking strange courses on its likely path to a conference committee. It’s anyone’s guess what will emerge for final House and Senate votes.

A bill reforming the labor laws regarding independent contractors will likely fall to a political death. It was the product of extensive bipartisan work in the House Commerce Committee. This has long been a tricky area of law, trying to protect workers from being exploited and losing access to employer-paid worker’s comp and unemployment insurance, without being a barrier to individuals who are truly working for themselves. Emerging new technology fields require evolution of old standards, and the committee worked for many weeks to craft a bill that won unanimous support across its political spectrum. It is the most important economic development work of the House this year.

It was derailed from reaching the House floor for a vote in an almost unprecedented way. After the labor lobby objected to changes from current law, some powerful liberal legislators pushed to get the bill sent back to the Commerce Committee for “more work.” There it sits, well past the deadline for crossing over to the Senate and unlikely to be permitted out of committee despite the committee’s own vote to move it forward.


In my Health Care Committee, we are addressing Senate bills that deal with updating managed care and hospital regulation; creating better prescription cost transparency for health plans; blocking vision care plans from limiting the suppliers that optometrists can access; and requiring notice to patients when their provider practice is bought by a hospital. Each has its own labyrinth of detail to unravel, and presents opportunities to add last-minute new proposals. Late session bills are sometimes called “Christmas trees” because so many add-on “decorations” are placed on the underlying bill. The process keeps lobbyists hopping as they try to track issues for their clients.

A piece I tried to add to the hospital regulation bill this past week gives a good snapshot into the role of lobbyists: a role that, at least in Vermont, usually is not the nefarious one that is often assumed.

I’ve long been more than a little annoyed about the way our non-profit hospitals conduct their business behind closed doors. They receive huge amounts of public money as well as the health care resource dollars that we pay in insurance, but develop their policies in private board meeting. More than a decade ago I led a battle to require that meetings be open unless confidential or proprietary information was being discussed. It a political hot potato – hospitals are powerful political players – and the effort failed.

We did get a requirement through back then that hospitals list on their websites the names of board members and the means for “obtaining a schedule of meetings of the hospital's governing body, including times scheduled for public participation.” Unfortunately with a few notable exceptions – the University of Vermont Medical Center as the shining example – most have no times scheduled for any such public participation.

The Senate bill we were working on includes updating some of the information reporting requirements, creating the opportunity for me to propose an new open board meeting clause. It rapidly gained positive traction among some members of my committee.

And panic from the hospital association’s lobbyist.

Unlike a regular bill that provides for lots of advance notice and discussion, this amendment to an existing bill could be on a fast track, and she had concerns on behalf of her client members. She articulated them rapidly: would this create a chilling effect on recruitment for these volunteer board positions? Block open discussion of tricky policy matters? How would “confidential” be defined? What about emergency meetings?

She proposed an alternative. She offered her commitment to work with her members and in particular to discuss with and learn from how UVMMC has been successfully achieving its open meeting process. She would then come back next year with a concrete proposal for how to create a hospital governing process that is more transparent and welcoming of public participation. In exchange, we would agree to hold off on rushing anything into a bill this year, in favor of it receiving full vetting.

My proposed amendment might, or might not, have made it through the committee process, House floor debate, and Senate approval. The hospitals would have been fighting vigorously. Next year, there will be turnover in the legislature, and the issue may well lay dormant.

But I have worked with this lobbyist for many years now, and I know she is a person of her word. We have collaborated on issues of shared concerns, debated vigorously on others, and agreed to disagree on some, and but always with mutual respect. With my agreement to withdraw my proposal, she has protected her clients from a potentially not-well-thought out and disruptive new mandate. However I have gained a commitment for development of an approach that will have a far greater prospect of consensus, and thus, of actually becoming law next year.

The product will be better. The public will be better served. The process will have worked, through the help of a lobbyist during her job. 


My committee is also continuing its work on trying to craft a bill that will force disclosures from pharmaceutical manufacturers about how they create – and justify – cost structures and cost increases. The concept is simple. Drug companies defend high prices based on the costs of developing and testing new drugs. We want to say, “Prove it. Put up or shut up. Show us the money trail.”

Some drugs that have been on the market for years suddenly spike in price. Why? We can’t try to protect consumers and build cost containment without knowing what actually drives the costs. There are efforts in multiple states to try to push for this information, and it is likely that these very profitable businesses will fight back with lawsuits.

We have long passed the deadline to get this bill to the Senate. It thus has little chance of actually passing this year. It would remain as only an expression of intent of the Vermont House. But I think it’s a conversation worth trying to force, and a public challenge to pharmaceutical companies worth making. It’s a battle that needs to be fought one step at a time.


Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email ( for me; for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.




Anne B. Donahue


Saturday, April 2, 2016

April 2, 2016 Legislative Update

Legislative Update

Representative Anne Donahue

April 2, 2016


What counts as a tax increase? In fact, what counts as a tax?

We grappled at least indirectly with those questions in the past two weeks.

Fees are defined as not being taxes, because they come only from those who use a particular service, and pay only for the cost of that service.

For example: You want to be licensed in a certain profession. That profession is regulated in order to ensure your qualifications. Since you are the one benefiting by becoming licensed, your fee pays for the state’s cost in oversight of the licensing process.

It could be argued in the opposite direction. The reason for professional oversight is for public protection, so why isn’t the public at large paying for it, through taxes?

That is the policy decision that is made each time we, as a state, decides to pay for services through either a tax or a fee.

Every year, a third of all of the fees charged by the state are reviewed to ensure they are keeping up with inflation and still covering the costs of the service. This year, it was the Department of Motor Vehicles’ turn for increases.

Motor vehicle fees have a broader reach than just paying for the services of the DMV itself. We pay for our entire state portion of the transportation budget through contributions (mandatory ones) from those who use the roads, rather than from taxpayers as a whole.

There are three sources: the gas tax, the motor vehicle purchase and use tax, and motor vehicle fees.

These fee increases are nickel and diming us to death: a lot of items only going up a dollar a two, but all adding up to real money. It totaled about $10 million in fee increases, many of them in the range of a 20 percent increase.

That would be a whopping amount for a one year increase but in fact, most of these fees were last raised in either 2002 or 2012. Spread over the amount of time, they were in the range of two to three percent increases, very much in line with inflation.

For that reason, I voted for the transportation funding bill this past week. The increases made sense, and the DMV money raised goes directly into maintaining the roads we drive on.


I did not look kindly, on the other hand, on this year’s general fee bill. It included one whopping fee increase (by 233 percent) that was not remotely related to the actual cost of regulating the business at issue: mutual funds.

We raised it for one reason only: there was a deficit in the state budget, and someone noticed that our fee was much lower than other states around us.

So how did we get away with calling this tax a “fee”?  We simply changed the law, and passed language that exempted that specific fee from the statutory definition of a fee.

It always sounds easy to raise a tax (or supposedly, a “fee”) on a faceless big business. The fact is, businesses don’t pay taxes. Only individual people pay taxes… because one way or another, the money being raised is going to be passed on down through to the consumer.


Speaking of taxes, after getting through with this year’s big tax bill the week before (including an increase in the tax on your heating fuel), last week we also addressed education and the property tax.

The rate increase will be small this year, but regrettably and unnecessarily, it will still be an increase. Last year, we promised relief by requiring towns to come up with their own local money if they went above a pre-set growth percentage. Earlier this year, the legislature wimped out and mostly repealed it. That drove everyone else’s share of the property tax back up again.

So we will be finishing up yet another legislative session without reforming the education taxation system that has vexed us all for so many years.


There are times when the competing values in a piece of legislation leave one in a no-win situation, and those are the votes that can leave you second-guessing yourself long after the roll call is over and done.

So it was for me on a small amendment to the annual state budget.

Ambulance services around our state are mostly run by local communities, and they don’t break even on the reimbursement from health insurance. Towns often pick up the deficit (meaning, of course, your local property tax.)

The recent increase in the number of Vermonters on Medicaid has had a really negative impact on these services, because Medicaid (that is, the state) reimburses at about 40 percent of the cost of services. In effect, this is a cost shift from a state obligation (general fund taxes) to local property taxes.

Our general fund budget, however, is already outpacing our economic growth rate, and we can’t sustain further increases. While we ought to have stepped back and re-prioritized the state’s overall spending, that wouldn’t solve the immediate problem that was before us as we voted on the budget.

Some creative financing had been done to propose a fix. It’s something that actually is well known by its nickname, Medi-scam, as a way to artificially get federal money to pump up our budget.

It works by increasing the Medicaid rates paid by a medical service, a cost that is shared by the state and the feds. We pull in the federal money, but we don’t actually pay the state share. We create the state share by raising the money through a tax on that medical service provider (called a “provider tax.”)

For example: Say an ambulance ride is currently reimbursed by Medicaid at $100. The state increases the rate to $150. Of the extra $50, $25 comes from the feds and $25 has to come from the state. So we set a service tax of $25 for the ambulance, and use the tax to pay our $25 share.

End result: the ambulance “nets” an increase of $25 thanks to the federal share (minus some administrative overhead, of course.)

We do it for hospitals and nursing homes… why not ambulances?

From a policy perspective, it’s a really bad way to raise money. Sooner or later, the feds are going to cut off this spigot. And even if it is revenue neutral, it does increase the size of the state’s budget as a whole.

Finally, we have to remember that “federal” money is just another source of funds that ultimately comes from our pockets.

On the other hand, as a member of the Health Care Committee, I’ve been getting pleas from ambulance services around the state about the desperate state of their budgets, and the pressure being put on towns.

So I voted in support of the ambulance amendment (despite not supporting the budget as a whole.) But I’m still not sure it was the right decision.


I was pleased and grateful to see the Transportation Committee include a bill I introduced, within its larger annual transportation budget policy bill. It requires the Department of Transportation to develop short and long term measures to address safety at the Quechee Gorge bridge.

The bridge has become a suicide “hot spot.” Contrary to common assumptions, if a suicide is prevented, 90 percent of the time the individual does not simply turn to another means of death. Creating obstacles to suicide literally does mean saving lives.

If we had a particular traffic intersection or stretch of road where 10 deaths had occurred over the past ten years, we wouldn’t question the need to evaluate safety protections. We have lost 10 Vermonters since 2006, mostly young people, to the easy access and “no turning back” risks presented at the Quequee Gorge bridge. There are easy and low cost ways to intervene, and we need to take those steps.


Thanks for the honor of representing you! You can contact me or Rep. Patti Lewis by email ( for me; for Patti) or by leaving a message at the statehouse at 828-2228. We welcome your feedback and input.