2023 Legislative Economic Preview

 Legislative Financial Preview

Rep. Anne Donahue

December 20, 2022

Every December, new and returning legislators get the opportunity to hear a preview of the state’s financial status in anticipation of starting work in January. Our state economist and principal economic advisor, Tom Kavet, shares his best estimates of what the economy is looking like, and what we might be facing in the year ahead. That includes the second half of fiscal year 2023 -- which ends in June -- and fiscal year 2024, which starts this July and will be the budget we construct over the months ahead.

I usually try to send out a summary, but this year, his opening bullet points do a far better job than I could in summing up the situation that led him to open by saying, “Two opposing forces are now colliding and shaping the national and state economics – and affecting state revenues.” 

I’ll start with his concluding point, and then go in order from the top:

- A good start to the fiscal year 2023 revenues, but the second half of the year will be more challenging and fy ’24 could be ugly. 

Here’s why:

- Total [state] revenues through November (General, Transportation and partial Education Funds [referencing the non-property tax portions]) are about 6.5% above targets (about $76 million on a base of about $1.2 billion), with revenues particularly strong in the first quarter of the fiscal year and slower in the second. 

- The revenue strength in the first five months of the fiscal year was concentrated in Personal and Corporate income taxes. With asset prices and corporate profits still at elevated levels, demand remaining resilient and prices rising, income tax liabilities have risen accordingly. 

- Almost all other revenue sources were close to or slightly above year-to-date targets, including the large consumption taxes, with rooms and meals 1.8% above target, motor vehicle purchase and use up 2.3% and sales and use, up 3.2%.

- With one foot still on the gas and the other now slamming on the brakes, federal fiscal and monetary policies are generating opposing forces that will both confuse and control the state economy and revenues in coming years.

- While direct pandemic health effects have receded from prominence, their legacy of vast federal spending, shifting consumer preferences, supply chain disruptions and reduced labor force participation continue to resonate loudly.

- With viral mutations continuing and geo-political instability from war in Europe added to the mix, the outlook continues to be extremely volatile and unpredictable.

- Despite all the current risk, fy 22 and fy 23 revenues to date have benefited from the vast federal spending which has been coursing through the Vermont economy in the past 2 years.

So there you have it: we’re in great shape right now. The words “volatile and unpredictable” are scary ones.

What is the basis for the unpredictability? Here are some of Cavet’s other points, abbreviated:

- The extraordinary federal deficit spending to offset the pandemic blunted its impact but was probably more than what was needed.

- Vermont received a disproportionate share, in excess of $10 billion. [This is due to the “small state minimum” formula.]

- The Inflation Reduction Act may reduce inflation in the long run but includes further spending that will delay any immediate effects.

- We are experiencing the highest inflation in 40 years because of a combination of factors: the spike in consumer demand, plus supply constraints caused by lower labor force participation, bottlenecks in China due to its zero-COVID policy, and Russia’s invasion of Ukraine.

- Inflation hasn’t impacted spending significantly because of savings that were retained during the pandemic, but now, many are beginning to increase their debt levels again.

- The Fed is trying to reduce demand through interest rate increases and will continue to do so until it believes the economy has slowed to the goal of 2 to 3%.

- However, interest rate increases can’t affect the supply chain issues, and the Fed may overshoot with a rapid drop in consumption… If it does, a recession will be likely.

Of note in terms of Vermont employment: our losses during the pandemic totaled 65.8 thousand jobs, a decline of nearly 21%. Since then, it has recovered 51.9 thousand jobs, still 4.4% below its pre-pandemic peak. It would still need to add about 14 thousand jobs to return to pre-pandemic levels. Yet, our unemployment levels are a record lows in terms of the ability to fill jobs. Our workforce crisis continues. And I just learned that not a penny of the investments my Health Care Committee put towards healthcare workforce development last spring has gotten out the door yet; it’s still caught up in administrative processes.

Those of us in the last legislative session already were being warned that fy 24 could look bad, from a budget perspective. On top of that, there is the issue of the expectations created while we had massively more federal money coming into the budget. It is much harder to give and then take away, than to give a little bit less from the start. As the surplus COVID money ends, no one will remember it was temporary funding for a temporary program; they will say services are being cut.

In addition, the new Democratic super-majority is seeing its veto-proof position as an opportunity to proceed on a number of new initiatives simultaneously: expanded childcare support, additional housing funding, paid family leave, and climate measures. Many of those don’t require an “in-your-face” tax increase. Paid family leave will be employer-employee funded; fuel consumption for heat will be cut through fuel prices, etc – hidden tax increases. I agree with the social good of many of these initiatives but have yet to see where the money will come from. If the economy is not vigorously expanding (and look back at Tom Kavet’s status report), it can only come from new taxes or added economic burdens on individuals. 

The Vermont League of Cities and Towns has a sobering reminder in its annual preview for the year ahead: “In 2020, Vermont ranked second in terms of total state tax burden per capita, and fifth in terms of state and local property tax burden per capita. Thus, how we fund government at the state and local levels – and how the legislature determines its priorities – affect Vermonters in their pocketbooks every day.”

One thing that has been growing at record levels has been housing prices: in Vermont, the past two quarters reflect a highest-ever year-over-year growth. That puts the legislature in the glorious position of being able to cut the education property tax rates. Don’t be fooled by those headlines. The rates can go down because the value of property is up. You will pay the same or more depending upon how much spending goes up (and school boards have inflation to deal with as well) and whether or how much we return the excess taxes we raised this past year – a surplus that will be tempting to spend. But it also means that our crisis in housing affordability will continue to get more severe despite the massive investments already made via COVID funds. 

Health care sustainability and cost growth is also chomping at our heels, exacerbated by the workforce crisis and long pre-dating COVID, yet it seems to have fallen off the radar as an urgent priority. It remains one of mine. Despite the degree of federal control that limits what we can do, there are things we could be doing to chip away at some of the inequities in access. 

One of the “gap” groups that we’ve ignored thus far is those who are dropped from Medicaid when they turn 65 because a higher income threshold goes into effect. As much as we hear the call for “Medicare for all,” Medicare has some large holes and some cost burdens. I think our low-income senior citizens should get the same support that we provide our citizens before they turn 65, instead of dropping some of them off the cliff. 

Last year, we asked for a report on how we might achieve that goal and how much it would cost, and I have a bill underway to put this issue directly on the table for the coming year. This would require unexpected improvement in revenues this year. It would also require that it move in front of the new and expensive priorities that have been added to the legislative wish list for 2023. 

The bottom line in all of this is strengthening economic development as the basis for being able to do more of what we want for our citizens. Despite the experience I’ve built in health care systems over the years, I hope that this year I can move into playing a bigger role in building our workforce and economic stability.

So – a challenging year ahead.

Best to you for the holidays and for the new year around the corner.

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Please contact me or district-mate Rep. Ken Goslant anytime with questions or concerns. I can be reached at adonahue@leg.state.vt.us, and Ken is at kgoslant@leg.state.vt.us. We both look forward to serving you in the year ahead.

 

House Floor Speech on Prop 5, Feb 8, 2022

 Madam Speaker,

I rise today with no expectations or intent to change the mind of members on their votes. But I hope to convince every person on either side to leave slightly less certain than when they came in.

Eric Metaxas, author of Seven Women and the Secret of Their Greatness, in 2015, said, 

“Each era has the fatal hubris to believe that it has once and for all climbed to the top of the mountain and can see everything as it is, from the highest and most objective vantage point possible.”

We have been certain in the past: 

It was a norm to take land and kill its people; it was a norm to sell people; it was a norm to sterilize those we believed should not be procreating.

None of those actions were taken in the belief of doing wrong.

But people in power make decisions; the onus is thus on us to carefully examine our assumptions.

Our human race, worldwide and for centuries, has been wrestling with the issues of women’s rights to their bodies and abortion, struggling with the difficulty of achieving any kind of a balance.

Roe v Wade reflects on that, citing the long history of differing and changing perspectives and demonstrating why it is so hard.

It is not random chance that such great division has lasted for so long and to such depths of convictions. It is because the issue is, itself, so very hard.

One way to examine our own assumptions is to look to elsewhere in the world, and the laws of other countries, especially those with similar values of pluralism as our own.

Where does the right to reproductive autonomy protect unlimited access to abortion without any limit on gestational age? 

The only nations allowing unrestricted elective abortions at any time are Canada, China, the Netherlands, North Korea, Singapore, and Vietnam. 

Missing from that list are most of those we think of as among the most progressive nations, and in fact, many of them have some mandatory threshold even for the earliest abortions. 

A few examples: 

In Germany, first trimester abortions are only permitted under a condition of mandatory counseling 3 days in advance; they are permitted later in pregnancy only if the pregnancy is found to pose significant danger to the physical or mental health of the pregnant woman. 

But Germany is perhaps not the best example. We would expect great caution after its Nazi history; abortion was severely punished for Aryan women but permitted where the parents were Jewish -- it sharply distinguished between life that was deemed worthy, and what were called, ‘unworthy lives.’ In 1935 the Nazis introduced a ‘eugenic justification’ for abortion in the criminal code, and in 1943 they supplemented [it] with a clause demanding the death penalty for abortion ‘in cases where the vitality of the German people [was] threatened.’

So let’s look at instead to a few other samples: 

Sweden permits abortion on the request of the pregnant woman only until the 18th week. After the 18th week, it requires an evaluation and permission through the National Board of Health and Welfare which must find an exceptional circumstance. None are permitted after viability.

In England, abortion is allowed during the first 24 weeks of pregnancy but those must be for socio-economic or health reasons-- (that limit was reduced from 28 weeks to 24 in 1991 to reflect advances in technology that enable the very premature to survive.) Beyond that, it is only permitted for significant medical reasons.

In Switzerland, abortion is legal during the first 12 weeks of pregnancy, upon a condition of counseling, for women who state that they are in distress. It is only legal after 12 weeks for threat of severe physical or psychological damage to the woman.

So if we see this as an easy question – as reproductive rights preeminent in all circumstances -- we stand almost alone against views worldwide and, 

We stand against Roe v Wade

Because, for those who look to Roe v Wade as bedrock: 

It struggled with those choices and did not utterly reject any right of society to prioritize the value of a developing life. 

In finding a role for the right of privacy, it also said, 

“The pregnant woman cannot be isolated in her privacy. She carries an embryo and, later, a fetus, if one accepts the medical definitions of the developing young in the human uterus.”

And it then flatly rejected the argument, quote, “that the woman's right is absolute and that she is entitled to terminate her pregnancy at whatever time, in whatever way, and for whatever reason she alone chooses.”

This proposed constitutional amendment denies balancing.

It locks in a restriction on state interference unless there is a “compelling interest.” That still leaves the decision to the courts if the court deems it a situation where constitutional rights are in conflict, but it becomes the only constitutional right which pre-establishes the standard for how the court must balance rights, giving reproductive autonomy pre-eminence in a way not given to any other right. 

The “compelling interest” and “least restrictive means” language is a test that the courts established for how they weigh competing rights. 

By inserting that language, we prescribe how the court must interpret the constitution. Yet at the same time, we also turn over to the courts a completely new, undefined term to interpret – “reproductive autonomy” – requiring multiple, unforeseeable, court interpretations in the future. 

Although abortion is never directly referenced in the language, we know that in current legislative intent, abortion is the core impetus for this proposal. So, I want to turn to 3 issues within that particular debate:

-- Is a developing embryo or fetus a person, who therefore has rights? 

-- Is the choice of abortion a reproductive health care right, a matter of equity, potentially putting two rights into conflict? 

-- And then, is arguing for one perspective forcing the religion of some, over other people?

First, is this embryo, then fetus, a person?

It is obviously living, and human, not turtle – but the question is when “personhood” attaches to it.

If we divide those -- between human life and having personhood – we are saying some human lives are not fully people. 

Not yet fully persons. 

Where have we heard that before in our history, as a way to dismiss the centrality of equality among human lives, in order to claim the superiority of the rights of one group over the other?

The history of humankind is deeply engrained with the stain of dividing between fit and unfit, those deemed less than fully human.

Our own Supreme Court once allowed Black lives to be counted as less. The Supreme Court also allowed “unfit lives” – Black, poor, indigenous, sexually different, disabled – to be denied the right to procreate, upholding eugenic sterilization laws with the words, 

if I may quote, Madam Speaker, 

“It is better for all the world, if instead of waiting to execute degenerate offspring for crime, or to let them starve for their imbecility, society can prevent those who are manifestly unfit from continuing their kind.”

We have always used different labels to distinguish the wanted and the unwanted, so that we keep the unwanted as not fully one of us, not fully persons. 

When a wanted pregnancy ends in a miscarriage, we say, “she lost her baby.” No one says she lost her embryo or her fetus. Because it was wanted, and that defines its humanity as a baby.

Parents now share pictures of their babies in the womb by ultrasound – “look at our baby,” not “look at our embryo” -- yet many recoil at the thought of requiring someone to look at the same photo before deciding to abort. We don’t want that humanity to be visible if it is unwanted.

Do we really want to use being wanted or not to distinguish between two kinds of life in the womb: one a fetus, not a person, and the other a human baby?

Second, is this an issue of health care and reproductive rights?

People biologically have testicles and ovaries for the sole purpose of reproduction. The womb was biologically designed to nurture and protect the embryo that results from joining of sperm and egg. 

It was biologically designed for that purpose inside and as a part of another person’s body. The fact that biology leads to the start of an embryo does not mean it is being compelled on someone. In most cases there is at least implicit consent to the fact that it might happen, even if not intended. Individuals, inherently, do control their reproductive decisions: that right to choose whether to reproduce and create offspring. But once that biological reproduction has already occurred because conception has occurred, that choice has been made. 

Simply because the embryo’s survival depends upon the protection of the womb does not make it the property of, or merely an appendage of the person bearing it. Removing it – which results in its death – is not reasonably defined as health care.

Third: Am I forcing my religion on others by perceiving and arguing for these rights? Roe v Wade doesn’t assert that. It underscores the right of a society – not a religion -- to have an interest in a developing life.

Who I am, and how my conscience is formed, is about my personal integrity in responding to the world. It is not about isolating religion from the rest of my self. A democratic dialogue is about sharing competing perspectives about our world views in trying to reach social consensus. Those perspectives include the ethics, morals, and yes, religion, of any person engaged in it. 

Demanding that people segment out their religion from their selves as criteria for entering public debate is wrong. A component of a person’s belief system is not being imposed on others any more than any majority imposes its perspective on others when it shares its values in the effort to build the values of a society – values ultimately established as laws.

If there is a risk of imposition of values, it is in the refusal to adopt conscience protection for health professionals who believe that participating in abortion violates their ethics or their religious views, telling them they cannot choose a medical profession if they are not willing to participate. 

Not too many years ago we argued for no smoking laws in bars not on public health grounds, but on the rights of a person to choose a profession as bartender without being subjected to tobacco smoke. 

Yet we have refused to protect the right of a person to choose a profession in health care without being compelled to uphold access to abortion. Adopting Proposal 5 without first adopting conscience protection establishes a legislative intent regarding its priorities. Conscience protection will be argued as an unconstitutionally imposed obstacle for some individuals’ decisions on their reproductive autonomy. Even laws that allow for licensing standards or hospital regulations or ethics standards may be found to violate the constitution as obstacles.

I cannot accept that we are not deeply harming society by disregarding life in the womb, and I see no compelling rationale to draw the line between life and human personhood at birth, any more than at the transition from embryo to fetus, or the transition to full cognitive maturity at what we now recognize as not occurring until the mid 20’s. 

That line defining “maturity and responsibility for behavior” has shifted with science… why would we not see shifts over time in the rational recognition of attachment of personhood? Quickening has long been replaced by ultrasound.

But I also cannot contemplate an image of a person in restraints for 9 months, being forced to carry, unwanted, that other person in their womb. It is painful to think that the liberty and dignity to determine one’s own life course could be radically altered by something as potentially unpredictable as the failure of a contraceptive. 

And I believe no compassionate society would ever criminally punish a person who acts on the desperation of feeling trapped by their own body having betrayed and taken control away from them.

So yes, it does make a difference if that other life is being sustained within someone’s body who does not want it there. 

But that doesn’t turn it into being solely about women’s health care or reproductive freedom.  

Refusing the recognition that this contradiction exists is the wrong way to address this hard, hard issue, because it takes it outside of anyone other than the person who is carrying that baby and denies the validity of society having any interest in the liberty and dignity of that other life. 

I have no solution between these colliding realities.

50 years ago as a college freshman when Roe v Wade was decided, I did think it was simple and clear: the murder of a human life, beginning at conception, could never be acceptable. 

It is not simple and clear.

Our world offers no solutions – world views have been in debate for decades, for centuries; views throughout the world remain torn.

I believe that is the core of what is wrong with Proposal 5.

It takes a deeply ethical dilemma that divides good people – all of them good, caring people – and it chooses the most absolute extreme of one side of a debate that has and continues to divide society so passionately and profoundly.

It is out of step with a world that continues to be conflicted. 

It claims the solution as simple: that it is only about reproductive freedom and nothing else.

And it proposes that view to be engraved in our constitution.

Good people have in the past made grievous mistakes and violated human rights -- whether through imperialism or slavery or eugenics. Perspectives of time make us recognize the evil, but in their time they were in accord with their society’s values.  

In its time, colonialism and the massacre of indigenous people was not recognized as wrong, because conquerors had the right to claim new lands and new property rights and to kill for that purpose.

In its time, many leaders of our country did not recognize slavery as a fundamental wrong, because those lives were not recognized with equivalent value or humanity to their own. Slaves could be hunted down and killed because property rights were at stake, and the right to own property is a fundamental right.

In its time, many respected citizens did not recognize eugenics as wrong, because people unfit to reproduce did not have equal rights, and society had a right to prevent unwanted children from being born and being a burden on society. 

Planned Parenthood removed the name of Margaret Sanger, a eugenics supporter, from its New York affiliate building in 2020 with an acknowledgement that it was, 

“both a necessary and overdue step to reckon with our legacy and acknowledge Planned Parenthood’s contributions to historical reproductive harm within communities of color.” 

In other words, the planning of parenthood was part of an agenda to curtail the growth of unwanted groups of people, thereby identified as persons of lesser value.

I cannot justify assigning value, and discriminating, based upon age or degree of dependency on the body of another person any more than upon race, sexual orientation, intellectual acumen, disability, the ability to conquer, political power or color of skin.

It is irresponsible of us to propose an all-or-nothing, extreme perspective to the voters of Vermont. Those who perceive a need to protect Roe v Wade will be forced to go far beyond it, to a far more extreme position.

I will vote no on Proposal 5.

But we are all here today with the intent to do the right thing – to protect human rights. 

To protect human rights.

We simply see those rights under very different lenses.

What will time tell us about decisions we make in our era? 

What will we need to apologize for; be forgiven for; be asked to make reparations for? 

We don’t know. We can’t know.

But we should not have that fatal hubris to believe that we have once and for all climbed to the top of the mountain and can see everything as it is, from the highest and most objective vantage point.

The way any of us see things is not necessarily everything there is.

Let us all have the humility to leave today a slight bit less certain that our perspective can stand the test of time.

Thank you, Madam Speaker

May 15, 2022 End-of-Session Update

 The 2021-22 legislative session ended on Thursday with passage of an $8.3 billion budget. Of that, 2.8 is state general fund revenue, 1.9 is the property tax part of the education fund and 3.5 is federal funding. We also passed two tax bills, one with $40 million in tax relief, and the other, the annual education funding bill, with $20 million in a rate reduction from last year’s surplus and another $15 million reduction resulting from anticipated revenues this year. It was a high stakes week, with two efforts at an override of vetoes by the governor that both failed by a single vote as a result of just a few Democrats who did not support their caucus position. 

This is a summary of the major bills, without as much of my usual commentary, because there were so many. That’s typical of the last week, which is a headlong dash to get bills wrapped up before agreement is reached between House and Senate on the tax and budget bills, which mark the end.

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Budget

Huge investments were made using the remainder of the federal COVID rescue funds. These included workforce and economic recovery ($19 million in state general funding and $65.5 in federal COVID funds), housing, broadband, water and sewer, and climate initiatives including weatherization and $45 million in grants for municipalities for energy resilience measures.

It was a balanced budget that still allowed for $40 million in tax refunds or credits but included a number of new state positions – some temporary, but many permanent – as well as program increases in the base budget (those that will continue year-after-year, rather than one-time initiatives like the one from COVID funds.) I agreed with many of those key investments, though not all. The community mental health system has been seriously underfunded for years, for example, and we included a crucial eight percent increase for them, at a cost of $26 million. We have to vote on new spending on a one-bill-at-a-time basis, however, without the ability to see the full picture.

What is scary this year is the degree of uncertainty regarding how much we increased budget areas through blending with federal money, enhancing the ability to maximize the money yet muddying the question of what the base budget will look like next year. We delegate to the Appropriations Committee the job of pulling it all together and deciding on how to balance all those issues. When it comes out on an 11-0 tri-partisan vote of committee members, as it did this year, we have to trust in their judgment. I supported the budget; it passed the House on a 133-3 vote.

I did make one plea to my colleagues. We pass multiple bills every year asking for reports to be written – sometimes by a specific agency and other times through creation of a task force or work group. These cost time and money. They are important. We don’t have the time to delve deeply into complex topics; we need to ask for better information and more input. But all too often, a new session begins, and attention has turned elsewhere. The reports don’t result in action. Sometimes they are not even read. “Read them,” I begged.

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Taxes

I voted against both tax bills, despite the fact that both returned some money to some taxpayers. I don’t think the money was targeted in the right ways.

 The annual yield bill, which sets the property tax rate to fund Vermont's PreK–12 education system, projects an average homestead tax rate of $1.385 which is considerably lower than it was last year. That includes a return of $20 million out of the $95 million that was surplus this year. The surplus was from raising more in taxes than was needed, but we spent $65 million of those surplus taxes instead of returning them.

Most were worthy investments. It creates a new program in our career and technical education centers for building trades. It sets aside $40 million for addressing PCB chemical contaminants in our schools. It also allocates $29 million to expand free school meals to all students regardless of income. Since this is a one-time surplus, we will need new funds to continue it next year. Under review for its future funding is expanding the base for the sales tax. The irony is that the sales tax is our most regressive tax, meaning those with the lowest income use a much higher percent of their total income when they pay this tax on purchases. So lower-income families would be contributing more to pay for meals for higher income kids.

The second tax bill reduced $160 million in surplus revenues by returning some money to some taxpayers. The biggest chunk of that $40 million in tax relief was $32 million for a $1,000 check per child under age six for every family with an income under $125,000 (continuing but with a gradual reduction up to a cap of $175,000.) At the same time, the refundable tax credit for child or dependent care was increased from 50 to 72 percent of the federal level and the earned income tax credit was increased from 36 to 38 percent of the federal. “Refundable” means it is received as a check if the amount is greater than the taxes that were paid in.

Student loan interest will now be deductible for those earning $120,000 or less. The level at which Social Security income will be exempt from taxes was increased from $45,000 to $50,000, followed by partial exemption up until reaching $75,000. A new exemption was created for civil service retirement and military retirement income. Both exempt the first $10,000 of income for those earning $60,000 or less, with a graduated reduction up to an income of $75,000.

Both the Social Security and the military retirement exclusion were considerably less than what many of us had pressed for, and what the governor had asked for, and it continues to place us at a major disadvantage compared to what other states do for older residents and retired military. I voted no, but it passed on a 144-4 based on its many positive aspects.

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Veto Overrides

The House voted 99-51 to override two vetoes, which was one vote less than the two-thirds majority required. There were slight differences in how legislators voted on each. One bill was a Burlington charter change permitting “no cause” rental terminations; I had voted against the original bill and I voted no on the override.

The other was the Clean Heat bill establishing required reduction in the uses of fossil fuels for heating. I voted against this bill when it came through the House, because the program design and implementation was turned over completely to a state agency without us even knowing what it might cost Vermonters in home heating. The Senate amended the bill to require the agency to bring a proposal back to the legislature and require a new vote after we received and reviewed the details, before any implementation could begin. On that basis I voted to support the bill, and therefore also voted for the (unsuccessful) override.

A bit of an ugly scenario developed because the “swing vote” that lost the override came from a Democrat who had changed his mind just a day prior. He was pressured intensely by his caucus to change his vote through a rarely used special procedure that allows someone who voted “yes” to ask for reconsideration the next day. He held to his vote. If there had been a re-vote, I had already decided I would change my own vote on principle based on the coercion that was used on that member. That would have preserved the original 99-51 vote.

The week before, the governor’s veto was rejected unanimously by both House and Senate after he objected to the compromise bill worked out with union support to reform the state pension program. When the legislature adjourned, we did not set a veto session date, meaning there will be no attempt to override any vetoes of bills from this week. That includes one expected to be vetoed, a controversial proposal to restructure the environmental review process for Act 250 development decisions.

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Other Big Bills

Workforce: Looking for a degree? Interested in nursing? Now is the time to check into the major expansion in scholarship and loan repayment opportunities. If it’s in a field that Vermont has a particular shortage, a one-year commitment to work in Vermont can be traded for a year of scholarship funding or repayment.

Environment: A number of bills added attention to the environment, but parts were mixed and matched at the last moment. One that survived was the expansion of the current use tax program to include old growth forests that are being conserved. A controversial bill to change how we recycle bottles and expanding the category was passed by the House last year. The Senate finally took it up last week, was divided on the question, and let it die for lack of time.

Housing: Initiatives include $15 million to support the construction of homes that middle income residents can afford. It also includes $4 million to help people repair and upgrade manufactured homes, including down payment assistance for new energy efficient homes. An additional $20 million is aimed at helping owners fix up homes and apartments so that they can be rented and to renovate properties into accessory dwelling units.

Education: The Senate accepted the major revisions to pupil “weighting” that will shift how much education tax must be raised locally. Northfield and Berlin were among the few who will see little change, up or down. The process for towns which want to withdraw from a school district was also rewritten.

Cannabis: As part of approval of various rules for the market that will open in October, the House held firm to its position that edibles and liquid concentrates of greater that 60 percent THC (indicating potency) cannot be sold to the public. There is medical evidence of significantly higher health risks at this level. The Senate had wanted no restrictions to have the Vermont market on par with other nearby states. 

Hunting: Bills passed in the final week on standards against hunting unless for the use of food or pelt, a plan for development of “best practice” for trapping, and planned regulation of using dogs for hunting coyote. An amendment was attached to one on the House floor to make it legal to use noise suppressors when hunting. Most other states permit this, and our “doctor in the House” (his regular job is as an MD) made a passionate plea for protection against hearing loss.

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Health Care Finale

Two significant bills from my Health Care committee came back from the Senate and were passed in the closing week. One sets limits on the power of prescription benefit managers to control which pharmacies can fill prescriptions (currently they restrict them to pharmacies they own), which will help open up competition and protect independent pharmacies from being shortchanged. 

The other set the parameters for how the Green Mountain Care Board and Agency of Human Services will engage public participation in new efforts to reform health care payment structures. Cost containment seems like a constant uphill battle. Expect major increases in insurance premiums for next year. Insurers are asking the Board for significant rate increase approval, based upon expected hospital rate increases driven by COVID, inflation, and workforce shortages. Also last week: the governor signed our new telehealth bill, setting standards and oversight to allow continued use by out-of-state providers.

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Tidbits

Last minute rushing inevitably results in at least a few poorly crafted bills. A bill to update liquor tax rules added a definition for what most of us would call “hard cider” – but it defines these alcoholic beverages as “cider.” I know that when I am offered a glass of cider, I assume it’s not fermented. I said on the floor that if I am back next year, my first bill will be to amend it to read, “hard cider.” Afterwards, a liquor department administrator came over to me and thanked me, saying that he – as a person with 15 years of sobriety– couldn’t believe he had missed it. The department hopes to use internal rules to ensure that the labelling of “cider” still makes clear when it has alcohol.

Another bill directed police to collect and send data on all law enforcement “encounters” for compilation in a state database to track gender, race and other characteristics. We do this now for roadside stops. Does “encounter” include responding to a tourist looking for directions, I asked? The amount of new data collection could be massive, and expensive. The reporter of the bill acknowledged that it included no definition of what an “encounter” was. With the help of a colleague, I intercepted the bill in the Senate and convinced the bill sponsor there to drop that component in the bill in exchange for our promise to get House rules suspended to expedite the amended version so that the underlying bill would not die. As rewritten, the commissioner will come back with recommended definitions and feasibility for data collections.

I also reported a resolution to amend our House rules to waive our privilege to ignore the Americans with Disabilities Act. This was essentially a decades-long oversight that only came to light this year. Although we come under the ADA, we have immunity from enforcement within our own body, if we don’t comply. The new rules adopt ADA standards for ourselves.

I also reported a resolution for my committee that came from the Senate affirming protection of access to best-practice health care for transgender youth. It was adopted on an 134-5 roll call. Resolutions like this are symbolic only. This one was driven by restrictions popping up in other states. Symbolic statements can have value but shouldn’t take time and energy away from our real work. It got a bit ridiculous on the last day of the session when we debated a resolution “urging the President and Congress to spearhead a global effort to prevent nuclear war.” Huh? This is part of our job? And they are going to listen to us? 

***

Big changes are afoot for next year. More than half of the chairs of House committees are retiring, including Northfield’s former representative Maxine Grad (from prior to the last redistricting in 2012.) She has served 22 years. Of the six statewide offices, there have been four departures so far. Along with the open US Senate and House seats, it will be an active campaign season. There will also be the two constitutional amendments on the ballot. One eliminates reference to slavery and involuntary servitude. The other protects “reproductive liberty,” aka protects our current abortion law, which allows abortion for any reason up until the moment of birth.

***

All my past updates are available on my blog at representativeannedonahue.blogspot.com. Please contact me or Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.

END OF UPDATE *** END OF UPDATE *** END OF UPDATE

DISCLOSURE: CANDIDATE ADVERTISEMENT

I have made the decision to run for re-election; I think I am still contributing to helping make our state a better place for all of us. Thank you to those who signed my petition to be placed on the ballot. It is not extremely expensive to run for a House seat, but it does cost some money for brochures, advertising and the like. My funds are pretty much depleted after several years of not doing active fundraising. I would welcome support sent to: Donahue for House, 633 North Main Street, Northfield, VT 05663. Just a small contribution -- $10 or $20 -- means a lot!

All campaign finance reports (including contribution levels and expenditures) are available to the public on the Secretary of State’s wen site at: campaignfinance.vermont.gov/

May 8, 2022 Legislative Update

 

Lots to celebrate last week!

We welcomed Tony and Gail Mariano to the statehouse for a resolution honoring Tony’s amazing record of accomplishments at Norwich. Then Saturday was Green-Up Day, great work, everyone! And Happy Mother’s Day, Sunday.

Unfortunately, it did not also mark the end of our legislative session. We are carrying on finishing the budget and other key bills into at least mid-week.

***

Tough Decisions

We passed a bill in the House last week – I reported it for my committee, which had voted for it unanimously – that may very well hurt some Vermonters with a new price spike in health insurance. We were faced with a choice: how do we place fewer people at risk? Which is the lesser of two evils? Our hands were tied by the failure of the federal government to make a clear decision in one direction or the other about extending the extra subsidies for people who buy their insurance on the health exchange, created as part of the COVID rescue package.

Though I’d be happy to talk directly with anyone interested in an hour-long primer on the difference between merged or unmerged individual and small group markets, I won’t attempt to explain the hows and whys of it all, here. The best I could tell my colleagues on the House floor was that if we guessed wrong, we could still attempt to make up for it next year by finding a way to get a credit to those who were hit with extra costs. We cannot legally bind a future legislature, but those of us who may return can make good on a commitment, I told them.

In the meantime, a vignette on behind-the-scenes-type statehouse action: Our committee agreed with my suggestion that we ask our state insurance regulators to study options for next year to resolve the “merged versus unmerged” dilemma on a more permanent basis. Adding that to the bill with only a few days left in the session would place it at risk of not making deadlines to get it passed, since it would need to go back to the Senate to be taken up there, be accepted and voted on. Procedurally, that can add multiple days.

So, I had 24 hours to get pre-agreement by the members of the Senate Committee of jurisdiction that if we sent it back, they would immediately accept the proposed amendment. I also needed to get agreement from House leaders to use rules suspensions to expedite its journey to the Senate. I dashed around to gather votes and commitments, and 24 hours later we passed the bill, with amendment, in the House and rushed it down the hall; it was ready for Senate action on Monday, with the skids pre-greased for approval.

Suspending our own rules to expedite bills gets common in the crush of the final days, since bills that do not pass will die and have to start from ground zero next year, no matter how much time and how many witnesses were invested in the process. About a decade ago I objected forcefully about rule suspensions that required to vote on long, complex bills without even time to read them, and that drove a new, informal rule (the “24-hour rule,” or sometimes, “the Donahue rule”) that we would not vote to suspend rules with less than 24 hours unless everyone agreed they were comfortable with moving forward. Since a suspension of rules requires a ¾ vote, a minority party can enforce this agreement, but that has never been necessary. It has been respected.

***

In Conference

The mega-economic development and workforce bill is very slowly grinding through the process of a conference committee between Senate and House to resolve differences. One subcomponent is a series of healthcare workforce initiatives that originated from my Health Care Committee, so I was assigned as the representative to an unofficial sub-conference committee to hash out those differences with the Senate Health and Welfare Committee. We bartered among our priorities.

From the House side, it was all about addressing the nursing shortage through significantly increasing nursing scholarship and loan repayment funding and providing funds for nurse faculty short-term bonuses. We also designed a “pipeline” program modeled after an initiative at Central Vermont Medical Center that provides funding to backfill staff positions while other staff are paid for classroom hours while advancing their careers – a nursing assistant becoming a registered nurse, for example. All of these include the exchange of a student commitment to work for a year in Vermont in exchange for each year of financial support.

The Senate wanted to add other programs and reduce funding for ours, but we were both held to the same total investment of $11.9 million. As one example of compromises, we agreed to cut our pipeline program from $3 million to $2.5m (they had cut it to $2m) to move money to a Senate program. Although we achieved an agreement, it remains only a recommendation to the conferees on the main bill, so we will have to watch and wait for the outcome.

I did ensure that Norwich was included in access to the faculty funding, along with a capital construction share of $200,000 of the $1 million allocated for nursing simulation lab expansion among nursing programs in Vermont.

***

Being Contrary

The timing wasn’t planned, but I ended up on a minority side of my own party on several important votes last week. One of the strengths I have always seen in the Republican caucus in the Vermont House is that no one is castigated for voting based upon one’s own judgement and principles.

I had voted against the Clean Heat bill last month, and I made my objection clear: while it established a program to transition away from fossil fuels, it turned the actual decision-making over to the Public Utility Commission to implement it. We were voting without even a clue as to what it might cost for Vermonters. It was the same reason I voted against the Climate Solutions Act two years ago. We were delegating our authority – and our responsibility for consequences – to others.

The Senate got the Clean Heat bill and added a requirement that before a single rule for the start of any implementation could be adopted, the rules would have to be provided to the legislature, which would have to authorize action by a new vote. When this bill returned to the House last week, I voted for it. We will be able to fully review the program that is developed and proposed before anything can go into effect. That was not enough reassurance for the Governor, who vetoed it a few days later. So, it will be back before us in the week ahead for another override vote. With a House roll call vote of 87-38, the outcome since not yet clear, since 25 members were not present. An override requires a 2/3^rd majority, meaning 100 votes of the full 150.

***

Overrides

It is proving to be a very busy month for override votes. The Governor vetoed the pension bill, which had been brokered by a negotiating team established last year. The new plan does little to solve structural problems for the long term, probably making some overly optimistic assumptions. But it is still an important step towards addressing a fiscal crisis, so I supported it. In fact, it received unanimous support. The Governor said he vetoed it on principal despite knowing the override was inevitable. And it was, indeed. Not a single person changed their vote based solely on the veto, so the override was also unanimous. Still pending are override votes on the Burlington charter change banning no fault lease terminations and the housing bill that includes a rental housing registry, both of which I voted against.

Another vetoed bill is still drifting on the calendar, where it will remain: a construction contractor registry. Instead of facing the prospect of failing to achieve an override, the majority party embedded the rejected bill into a much-wanted housing bill. But it came with an olive branch. The threshold for requiring registration was moved from projects costing $3,000 to $10,000. I think that is a reasonable consumer protection effort, so I voted yes on it this past week. It will be on the Governor’s desk shortly.

***

Tacking Bills On Bills

Near the end of a session, it’s often said that in the disputes between House and Senate versions every bill becomes either a hostage or a Christmas tree. A hostage is a bill the other side wants that is held back until they produce the one you are waiting for. A Christmas tree is a bill that keeps gaining “ornaments” – other bills tacked on that otherwise would be long past deadline, or that the other side has refused to take up.

One environmental bill I supported that came from the Senate had a separate bill attached to it by a House committee last week. That bill had already passed the House, but the Senate had chosen to not take it up. I had opposed that other bill at the time. I think it does damage to our environmental court process and will add considerable cost. I asked for the bill to be divided, but when both parts still passed and were re-combined, I voted against the final version. We have yet to see how the Senate will respond.

***

All my past updates are available on my blog at representativeannedonahue.blogspot.com. Please contact me or Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.

April 23, 2022 Legislative Update

If we are truly going to finish the session by May 6 – a week ahead of what we are budgeted for – everyone’s heads will be spinning in the last few days. Most major bills have not even reached the point of a conference committee to resolve competing House and Senate versions. The budget just went to conference on Friday.

What is the big rush? Three members of the Senate are running for U.S. Congress member Peter Welch’s open seat, and they want to get onto the campaign trail. Hopefully we will not succumb to pressure by voting bills through without even time to read them. I’ve fought that in the past and certainly would again.

***

Health Care Example

My committee just voted out a significantly changed version of the major health care bill of the session, which was initiated in the Senate. It still has to clear our Appropriations Committee, so it won’t be voted on by the House until near the end of the week. That would only leave a week for the Senate to assess our changes, push back, negotiate, and then move an agreement through both House and Senate, which would not be possible without suspending our ordinary rules and expediting the process.

The hospital association opposes the bill, fearing that cost-containment efforts will force cuts in services, but they testified that our version is better than the Senate’s. The real focus of the bill is how to ensure the sustainability of our rural hospitals. According to media accounts, the Senate does not like our version, which takes a more thoughtful and inclusive route to the next phase of health care payment reform and the negotiations with the federal government necessary to achieve them.

***

Intra-House Disputes

When one party has control, disputes between committees never reach the surface publicly as a debate on the House floor would; the House Speaker will resolve it in advance. I can’t predict what will happen with my committee’s bill protecting patient genetic information.

The issue is whether life insurance companies can access patient tests for genetic markers which do not result in a diagnosis but may indicate an increase in risk for a disease. We placed health care as the priority to encourage testing and preventive measures, passing a bill that blocks life insurer access. The Commerce Committee, however, is worried about an impact on the health of life insurance companies. Right now, it doesn’t look as though there is a compromise available, so whether our bill makes the light of day may well be decided in the Speaker’s office.

***

A Brilliant Opportunity

Amidst all the angst over ways to help reduce carbon emissions, there is one easy place where we could all step up. According to an estimate cited in a bill we passed this week, “if every motor vehicle in Vermont reduced unnecessary idling by just one minute per day, over the course of a year Vermonters would save over 1,000,000 gallons of fuel and over $2 million in fuel costs, and Vermont would reduce CO2 emissions by more than 10,000 metric tons.”

Don’t panic; we didn’t just pass a bill to ban idling… it’s already the law! This is a section of a routine motor vehicle law update bill that simply directs the state to increase public awareness. If you see more public service announcements reminding you that in Vermont, “A person shall not cause or permit operation of the primary propulsion engine of a motor vehicle for more than five minutes in any 60-minute period while the vehicle is stationary,” that will be why.

***

Legislators Are Special?

We passed two new bills that are problematic, at least in part, for me. One creates a new crime for making threats to an elected official – separate from what the law already says about threating. I think we are flirting with free speech and the right to “petition for redress of grievances.”

Serious threats against anyone are covered under existing law. Yes, I’ve had constituents who may use some hyperbole in expressing anger over legislative actions. But I don’t want to see a chilling effect on political debate based upon some folks who may cross the line and need to act with greater civility.

I think we also really insulted our state’s physicians in our new legislative ethics law. I absolutely agree we needed to set ethics standards; we’re one of the few states without any. But some years back we banned physicians from even accepting a free cup of coffee at conferences being hosted by pharmaceutical companies, lest they be “bought off” by it. We legislators, however, can accept up to $100 without fear that our motives will be impugned.

***

Removing an Exemption

A question has arisen about the federal Americans with Disabilities Act and its applicability to our House proceedings. There have been federal court cases that establish that the independence of the process means that state legislatures are exempt from laws that we have not placed on ourselves. I believe strongly in the importance of this kind of separation of powers, but I also believe strongly in the importance of equality in access to our government for all. I am pushing a proposal in our House Rules Committee to adopt an affirmation that we assert our exemption – followed by setting our own rule that we choose to be governed by the standards of the ADA.

***

The Housing Registry

We seem to be explosively increasing areas of government bureaucracy and the number of state-funded positions this year. That includes six and a half new positions to enforce a new statewide rental safety oversight process that would replace local oversight. One Appropriations Committee member who acknowledged being part of the problem in terms of earlier bills this session voted against this one in his committee saying, “enough is enough.”

It was vetoed last year and once again enough Democrats joined Republicans in opposition that although it did pass, it would not survive a governor’s veto. This year, it was embedded within a bill with major federal funds for grants to help improve rental housing conditions, and those are funds everyone wants to see move forward. So, it will be brinksmanship on the legislature banking on the governor caving in, versus moving the funding to a separate bill and letting the registry bill die.

***

Tough Decisions

One difficult part of voting on bills that require budget investments is our inability to have a big picture in front of us. If we know we cannot have it all – and there is certainly no way government can pay for everything that everyone would like to see it do – how do we identify the priorities? It comes down to the big budget in the end, but that is made up of many of the components we vote on separately as the initiatives come before us. If you vote for each of the individual bills as being good, legitimate initiatives, it wouldn’t be fair to turn around in the end and say, “That has added too much and I’m voting against the budget.”

And thus, the dilemma of the proposal for universal school meals. Despite the appearance of simply “helping the rich” since poor kids already get free meals, there are legitimate reasons for it. A large number of eligible (hungry) kids don’t get meals for a myriad of reasons, including the fact that some struggling families are overwhelmed even just in trying to fill out complex paperwork.

The feds have paid for universal meals for two years under COVID. The current proposal would extend that for a year at a cost of $30 million paid for with “extra” money in the state’s Education Fund, for further review for a funding (tax) source next year. “Extra” money actually means that there is a surplus ($90 million) because last year the tax rate raised more money than we predicted to be needed for school budgets. It’s your money being proposed for various uses over and above last year’s education costs.

There are other demands for it. Most proposals include returning some to taxpayers. There are also school needs to address chemical contaminants and deferred maintenance. Which take priority? Where do we get the biggest bang for the buck in helping those most in need?

A big concern I have regarding the current bill as it heads to the floor for Tuesday is that it includes five permanent positions in the Agency of Education for implementation, including for creating a universal income declaration form. Permanent positions don’t sound like a one-year extension. And a universal declaration form? Will that require every family to make this disclosure – even if they didn’t ask for or want free meals?

So, I’m still hesitant and waiting to hear the full floor debate.

***

Your Voices

I’ve heard from constituents on the school meals issue. How does that impact a decision on a bill? It does, in part – and by different degrees. Individual, thoughtful letters that add insights matter a lot. Petition-type communications, less so. All of these reflect serious interest by a few people but not a public referendum. We have a representative democracy, not a direct one. That means you elect your representative based on what they stand for in a broad context; hopefully I act in ways that are consistent with that and if I don’t, you do not re-elect me. 

Ultimately, I need to vote based on the values I’ve expressed, not based upon limited specific constituent input on individual bills. I do listen. The impact is greater when I am more on the fence. That’s the case here – so you still have until Tuesday to share more thoughts.

***

All my past updates are available on my blog at representativeannedonahue.blogspot.com. Please contact me or Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.

April 10, 2022

 When you do surveys or polling, expertise and how questions are asked can heavily influence its accuracy. But if you ask the exact same questions over time, even if the questions are not hitting on the exactly right point, the ways the responses change can still provide valuable insights.

That’s how I look at the newly released results of Vermont’s Household Health Insurance Survey, something we have been conducting every three years or so since 2005. My House Health Care Committee heard a presentation on the new numbers this past week. It is based on in-depth interviews with more than 3,000 Vermonters. If you’d like to look at it directly, it’s at www.healthvermont.gov/stats/surveys/household-health-insurance-survey

So what does it tell us, and what does it fail to tell us? Some of the key “good news” components are that we have continued to maintain the level of 97% insurance coverage in the state. In addition, of the 70,000 or so Vermonters who lost jobs during COVID, 84% were able to maintain health coverage.

On the not-so-good news front, the number of Vermonters under age 65 who are underinsured has risen from 36 to 40 percent in the past seven years, despite all the increases in financial supports. In addition, the number of those who are on Medicare without having any coverage beyond the basic Parts A and B is 64%. Those are both important numbers but require a much deeper dive. I’ll try at least sharing a shallow dive.

What does “underinsured” mean? Broadly defined it means that based upon one’s income, a person cannot get the level of health care they need because their insurance does not cover enough of the costs to protect them. A simple example would be a plan that has a $10,000 deductible for someone making $40,000 a year. They would have to pay one fourth of their income in health costs before their insurance would start paying. If almost all Vermonters have insurance but a significant percentage of them still can’t access health care, the high level of insurance coverage is not exactly comforting.

The flaw is in trying to define underinsured, so that it isn’t just based on subjective perception. The survey uses a formula. Underinsured means that either the deductible is more than 5% of household income, or current medical expenses (co-pays and deductibles paid) are greater than 10% of income for those at 200% of poverty or more or 5% of income for those below 200% of poverty. (For a single person in 2021, 200% was $25,760; for a family of four, it was $53,000.) Even though it is considered the best available definition, it’s flawed for several reasons. 

First, it does not include the amount you are paying for your insurance premiums. If you are paying a staggering amount for coverage and as a result your out-of-pocket co-pays and deductibles are lower, that doesn’t get considered in the overall cost-burden of your health care. It also includes costs for health care that are not routinely covered by insurance at all which can skew the comparison of out-of-pocket costs. Finally, it doesn’t capture health savings accounts that are funded (fully or partially) by employers. If your insurance has really high co-pays but you have an HSA that covers most of them, you might still be counted as underinsured.

However, since we are using the same flawed formula every time, the relative change over the years still gives us important information. If under any definition those who fit under it are growing as a percentage, it is not good news in assessing whether our health care system is accessible and affordable.

Better Definitions?

It seems to me that in order to tackle a problem, we need to define the goal. Otherwise, if our goal is “affordable and accessible,” how do we know if we are getting closer to meeting it? 

Last summer and fall, I was on our legislative study committee that was aptly titled a Task Force on Accessible, Affordable Health Care. Several of us pushed for the need to develop a definition as a first step, and there was general agreement. We had a consulting firm that was doing the legwork for our evaluation, and it began straying more into subtopics that identified various projects that might help reduce system costs, thereby impacting affordability. Setting a standard fell by the wayside. For that reason, as well as the Medicare issue that I will discuss in a moment, I voted against adopting the consultant report as our Task Force Report. 

Who Are They?

Even without a definition, one would think we could identify the subgroups of people who have the least access to affordable coverage and target our problem-solving towards them. But we can’t, because much of it goes back to the fact that so much of our health coverage is employer-based. As per the updates from this year’s survey, 24% of Vermonters get their primary insurance from Medicaid, 22% from Medicare, and 49% through private companies.

Given our aging demographics, it’s no surprise that the Medicare percentage has gone from 15 to 22% since 2005. The Medicaid increase from 15 to 24% may be slightly off in this year’s data because the federal rules have forbidden reassessments of eligibility during COVID. However, much of it relates to the Affordable Care Act expansion of coverage. Of the private insurance group – which has dropped from 59% in 2005 to the current 49% in 2021 -- 10% are individual buyers on the health exchange (“Vermont Health Connect”.) Right now, as long as the increased subsidies from the federal government are in effect, most of them have some of the best accessibility. For all the remainder, who are getting insurance through their employer, we have no way of identifying what level of coverage they are receiving. 

Under the Affordable Care Act, you can switch to the health exchange if your employer’s insurance is not considered “affordable,” which is defined as a premium share that is greater than 9.6% of your income. Once again, this is not a rational standard. If your premium is low because of a huge deductible and huge co-pays, tough luck; you can’t opt for the much lower costs on the exchange. The formula looks solely at the premium you pay.

There is a worse problem that affects families directly. The affordability standard is based on the single employee, without including the costs for the rest of a family, even if the employer contributes nothing towards that. This “family glitch” can leave families paying 20 percent of their income for health coverage but still without access to the exchange. One of the brightest bits of news to come out of Washington this past week is that the administration has filed for a rule change for that particular definition.

The Medicare Problem

We don’t know about employer plans, but we do know about Medicare – and it’s a disgrace. Anyone who thinks “Medicare for All” is a grand solution doesn’t know enough about Medicare. And anyone who thinks Vermont is particularly generous in health care for those with very low income doesn’t know about Medicare in Vermont.

The typical person turning 65 faces complex decisions about an array of options that will determine their coverage for the rest of their lives. Basic Medicare leaves someone with high-cost risk, because although 80% of costs are covered in general, there is no upper limit to what a person may have to pay. At a bit over $2,000 a year for “Part B”, what it does cover may be a good deal for the money, but this is already a steep price if you are on a low fixed income, and prescription coverage is extra. If you delay paying for Part B, a permanent increase of 10% a year in cost is imposed for every year of delay.

If you can afford another $3,000 or so a year, you can get very comprehensive “gap” insurance. You can also trade it all in for an “Advantage Plan” which ranges in cost from just your existing Part B premium to an added premium. Instead of having no limits on possible out-of-pocket totals, these limit them to a range around $7,500. Your provider network is also restricted. It is a good approach for some folks, but once you choose it and finish a trial period, you can lock yourself out from the full “gap” coverage option forever, or at minimum, are locked into paying a much higher premium.

The number I referenced at the start – that 64% of those on Medicare only have basic A and B coverage – is much scarier when you realize how unprotected those folks actually are. And here’s the issue if you are low income: if you at the very lowest end, you are eligible to have Medicaid on top of your Medicare. But if you are at the higher end of current Medicaid eligibility (in other words, still quite low income) and you turn 65, you lose Medicaid protection, because we change the standard to a lower income level.

You turn 65, and we drop you off the proverbial cliff – you become another of that subgroup of folks who end up paying as much as 20% of their income for health coverage. There is some assistance available to pay your premium, but Vermont offers a lot less than some other states. Our Household Insurance Survey only reviewed underinsurance among those under age 65, as if it was never an issue for those on Medicare, so we don’t know how many folks may be at this level of severe need. We have our heads in the sand. 

To me, this is a huge affordability and access issue, and I pushed all last fall to include it in our Task Force study. Our consultants fell down on the job on it – which was the other reason I voted against adopting the report. This past week, my Health Care Committee voted out a bill that will focus on Medicare for the first time, looking at how to help Vermonters understand their options and what tools we may have, given that this is a totally federal program.

I pressed for an amendment that we added to this Senate bill, instructing our Department of Financial Regulation to review the “cliff” group, and what other states do to help. It might give us a first window on steps to address this particular inequity in accessible, affordable health care. 

This is all only about regular health care, not about the costs of long-term care that isn’t covered at all by Medicare – a massive looming crisis as our population ages.

***

Please contact me or Rep. Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.

All of my legislative updates are archived at representativeannedonahue.blogspot.com

March 26, 2022

 

How do we deal with the vast federal funding influx related to COVID? There is a lot of rational concern about so much federal spending. This is not “federal money.” Ultimately, only people pay taxes. We will have to pay for all of this in the future, one way or another.

Should we assess those funds on that basis and consider rejecting them? That would ignore two realities. If our share among the 50 states went back to Washington, it would be divvied up among the other 49, and we would still have to join in paying it back without our share of the benefit. Plus, selfishly speaking, Vermont is a “receiving state” for federal funds. In other words, we regularly receive more federal funds back than what we pay from all our various types of federal taxation. Some of it really is “free money” – to us.

So, the legislature is eagerly and rapidly spending it. It is all time-limited, to be spent within the next several years, so we need to appropriate all the rest of this year so that the programs and projects can be completed in time. The mega-danger is that we become reliant on any of these programs continuing once the federal money is all spent. In many cases it will appear to be “program cuts” in future years, when always intended to be short-term. The state revenue projection for the next several fiscal years is not at all rosy, so this will put massive pressure on any ongoing programs.

***

Money for Bridges

Berlin and even more so, Northfield, would be big winners in the federal rescue money for transportation infrastructure projects in the Transportation bill we passed in the House this week. A new (short-term!) category for federal aid is for bridges that are not on state roads. They will be paid 100% with the federal grant, with no state or town matches required. Thanks to the new aid, 19 steel truss and covered bridges were moved to an immediate priority list and will be funded 100% by the federal grant. No state match and no town match required.

Of 19 small steel truss and covered bridges statewide, Berlin has a truss bridge on the list for the coming year and Northfield will get one truss bridge and three covered bridges (the Cox Brook Road bridges.) Wow – five of the 19 statewide!

***

Money for Workforce

Assuming the Senate goes along with it – which is a caveat on anything I report regarding bills that pass the House – we are investing $42 million in efforts to address our workforce crisis. There are significant pieces that local residents should watch for because of the opportunities they may provide for scholarships and loan repayments in exchange for agreeing to stay and work in Vermont. In most cases it is a year-to-year equivalence: a year of work for a year of scholarship or repayment.

Norwich was a big help in my work on the healthcare portion of the bill, which had a major focus on our nursing shortage. I coordinated our health care committee’s input to the bill, and Norwich was my “turn to” resource for the needed terms-of-art and priorities for that sector. Its School of Nursing faces the same challenges as the others in the state and we are not graduating nearly enough new nurses to meet the need but are turning away students for lack of capacity. The House bill targets the biggest barriers to increasing capacity, and Norwich will share in the new 3-year funding that will help expand it.

The testimony pointed to several key problems: nursing school faculty earn very substantially less than in clinical positions, so they are difficult to recruit.  The simulation labs that students need are very expensive to maintain, let alone expand. And nurses in the hospitals who need to supervise students in their practice work get no added salary, so it can be hard to get volunteers given their heavy work schedules. We added to each of these with some supplemental funding including $4 million in COVID-supported capital funding for the simulation labs, to be shared among our state’s nursing schools. It will help Norwich’s School of Nursing along with the others in our state.

I’m most excited about what we call the “pipeline” program. Central Vermont Medical Center was a model for a program for its staff in front line care positions, such as nursing assistants, to get nursing degrees. It was highlighted in a recent Montpelier Bridge article. Many of those employees are already committed to working in health care here, but even with a scholarship can’t access further education because they can’t give up making an income while taking college courses. CVMC gave students paid time off for classwork and is seeing success, but it took seed money from grants to get it started. The $3m in funds we set aside for this will help any health care entity, large or small, partner with a nursing school to create a package to “grow” future nurses from within existing staff.

We very much hope the Senate will keep these programs in the bill. Housing and childcare are two other major workforce barriers, but those are addressed in separate bills.

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More Big Money

It was the deadline this week to get the big money bills from the House to the Senate for their “replies” to our initiatives, so we passed the transportation bill, the capital construction bill, the education tax rate and the state operating budget. The state budget hit an all-time record of $8.1 billion, but if you remove all federal funds, our state general fund – what we pay for in state taxes – actually went down slightly from last year.

I think we are adding too many new positions and too many new councils or boards. One can vote against the bills creating them (which I have), but it is hard to vote against the entire budget and the many positive things it includes based on those disparate items that become incorporated into it. The budget passed 135-4.

Since there are clear differences in policies that the Senate wants to advance, in particular with all the extra federal money, I hesitate to identify what the House is funding, since various items will be bartered back-and-forth in later negotiations with the Senate. For example, the Senate wants to put tens of millions into funds for businesses which paid employees who had to stay home for COVID isolation requirements. That’s not in our budget, so it would have to come from a reduction in something we funded.

The Senate has already passed a bill to continue the funding of universal school meals at a price tag of roughly $40m. That program was created by the federal government during COVID but it ends this year. Although we could continue it next year with some of our other “COVID rescue” money, there is no source to continue it the year after. So, a bill making it a permanent program will put us in a future budget bind.

The House hasn’t passed that bill yet, but it reserved money from the Education Fund to pay for it for this next year. For right now, that fund has $90+ million in carryover from last year: more money raised from property taxes than anticipated to meet the school budgets. The House plan includes returning $36m to taxpayers by reducing next year’s tax rate, reserving $36m for school lunches, and using the remainder of the excess revenue for an array of educational needs.

I’m not ready to support the lunch program until all the competing demands are in front of us. Every penny spent one place is a penny not available to spend somewhere else. Keep in mind that school lunches are already funded in full or in part for low- and moderate-income students. The universal program expands coverage to everyone, which has some real benefits but also subsidizes many families who can full afford their children’s meals.

On the “as drafted by the House” money bills, I voted for the state budget, the transportation budget, the workforce bill and the capital bill, but against the education fund tax rate bill.

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A Slew of Other Bills

We had several late evenings on the floor to wrap up all the other bills that were on deadline to send to the Senate, so I’ll give some brief highlights on some major ones.

Environmental protections: I supported a bill that set goals for increasing the amount of protected natural forestland in our state. The committee accepted an amendment I offered to increase clarity in the definitions.

I opposed a bill that sets out mandates for “clean heat” and turns over all the decision-making to create the program to a state commission. Throughout repeat questioning on the floor, proponents acknowledged that we have no idea what it will cost Vermonters in their future heating bills. Not even a guesstimate. So, we are passing a large blank check, to be paid by citizens in future fees, with no control over the program design or cost impact. The bill passed 90-42.

We passed the final 10-year redistricting plan. Our Northfield-Berlin 2-seat district will remain the same. I have been grateful in watching how this process proceeds in Vermont. In many states, it is rife with politics. The focus is how to shift lines so that the party in power gains further advantages. The plan we passed had broad tri-partisan support, 129-13. Those voting no came from among different parties that felt a detrimental impact for their own constituents.

It is nearly impossible to make everyone happy when there are constitutional requirements on how the numbers must even out among representatives. When parts of the state grow or shrink, those districts must change. One example on the Senate level: Stowe has become a part of Washington County for election purposes, instead of in its home county of Lamoille. Those folks are not happy about it.

We passed a bill creating a “Truth and Reconciliation” Task Force to hear from Vermonters who have been injured from state-supported laws and policies that caused discrimination, and to consider whether there are actions we need to take to remedy harms. Truth and Reconciliation boards have been created in other states for the same purpose of listening and recognizing historical harm. In Vermont, it is in follow-up of last year’s apology for the eugenics laws that allowed the sterilization of unwanted groups of people: those in rural poverty, those with disabilities, Abenaki people, and so-called “mixed race,” including French-Canadian. The new Task Force will also hear from persons of color and any other groups that have had experiences of harm.

I helped initiate this process by starting the effort at a recognition of the harms of eugenics some ten years ago, and I support the continuing understanding of our history and what changes may still need to happen. I believed, however, the price tag for the four-year Task Force, which will add up to about $4.5m, did not need to be that high. I made several efforts to have that budget cut back. After failing in that, I did still support the bill. It passed on a 109-30 vote.

We are continuing a multi-year process of reducing the upper levels of penalties for crimes. It was frustrating – and I challenged on the floor – bill presentations that essentially hid where reductions were. An example was changing a crime with a sentence limit of 15 years into being a “Class C felony” without saying what the sentence for that was. I was kept busy on the floor trying to look each one up, and several (such as reducing the potential sentence for burglary into an occupied home) seemed too radical without the rationale being explained. So, I voted no.

I supported a similar bill the next day that reduced drug possession offense maximum sentences and shifted the focus to treatment after the bill’s presenter – who noted my vigorous complaint the day before – did give a full explanation.

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Please contact me or Rep. Ken Goslant at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.

March 12. 2022 Legislative Update

 Between last Friday and the start of this week, no fewer than 23 bills were placed on the calendar for floor action. It may be a new record, but they won’t all actually be debated yet, as many will be referred to another committee for further review first. Most often, that’s the Appropriations Committee. If a bill will create a new cost to the budget, it has to be verified that there is actually enough money to take the project on.

The bill dump is no surprise, as Friday was the deadline for the year for bills to be voted out of their primary committee. That is not a barrier for initiatives to be slipped into other, pre-existing bills or through trading between House and Senate, but it is the cutoff for following the standard route forward.

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Bills on the Move

The House agreed in an 80-35 vote to move a bill forward that makes manufacturers responsible for the costs of free collection and disposal of hazardous wastes in household goods. It’s stuff that is highly dangerous to put in our landfill.

The argument that manufacturers instead of taxpayers will now pay for this was a farce. Obviously, the cost will show up in the products. But I do believe that if we buy something that must have leftovers safely retrieved because of high risk, we who buy it should have that included in the cost Thus, I voted for it.

Even more contentious was a bill expanding the current use program to include forested land that is not being managed or farmed. This program was created to protect us from losing farmland that was being appraised at the value if developed, instead of its “current use” as a farm. This was driving some farms out of business. Keep in mind that anything that is granted a reduction in property taxes means increases to everyone else. It passed 99-40 on a roll call vote; I opposed it.

Among bills in the week ahead:

District-mate Rep. Ken Goslant will report a bill giving greater access for adoptees to get their original birth certificates. 

We’ll review authorization for “natural organic reduction” of human remains as an alternative to traditional burials and look at a ban on mercury lamps, grants for towns to change to heating systems that reduce carbon emissions, and licensing out-of-state telehealth that maintains the access that began with a waiver for COVID while also protecting consumers.

A bill updating requirements for the coming marijuana retail establishments is expected to be contentious. 

The reapportionment bill is also on the list. It preserves our current Northfield-Berlin 2-seat district.

The mega-workforce development bill will go to Appropriations first but includes all the healthcare components my committee worked on; here, the controversy will become what we can afford and what items will be the priorities when some must be pared back.

Also going to Appropriations is the “Clean Heat Standard” bill that builds on the carbon reduction goals we created last session. It passed from its committee on a 6-4-1 vote, a sure sign of divided support and major debate. Appropriations could make significant changes, so it is too early to tell what will become the key issues in dispute.

A routine bill to discontinue boards and commissions that are no longer needed had a clause added on my initiative. I heard a concern from a constituent last fall about a requirement on the state web site that anyone applying to be appointed to a board, such as advisory boards to state agencies, must consent to their tax records being turned over. I suggested that should only be required if necessary for the specific board. Most people consider their tax records to be pretty private, and the current requirement could have a real chilling effect on citizens who want to apply.

All of the House bills will go to the Senate next, where they may be adopted, tweaked, radically changed, or left to die. Any changes then must come back for House review. That is a part of the checks-and-balances of having two separate bodies assess new legislation before it goes to the governor.

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Governor Vetoes

The major “check-and-balance” is the power of the governor to veto a bill. The legislature can overturn a veto, but that requires a two-thirds vote rather than a simple majority. We are working through several of vetoes. 

Last week, on a vote of 102-47, the House overrode the Governor on allowing Brattleboro’s decision to allow 16- and 17-year-olds to vote and run for office in local elections. I was on the losing side in supporting the Governor. We are in the midst of efforts to change laws to keep criminal offenders in Family Court up to age 24. There is another bill introduced that would forbid marriage under age 18. Both are based on the immaturity of judgement of young adults. There is a bizarre double standard here.

The newest gun control bill was also vetoed, and legislative leadership knew it didn’t have the votes for an override. They negotiated a compromise with the Governor to make it acceptable. The bill, unfortunately, addressees five different topics. What remains unacceptable to me is the permission for mental health counsellors to breach confidentiality to report a high-risk individual to the police. Well-intended, but likely with an unintended consequence. People in distress simply won’t share with a therapist if they fear being reported, and we will lose interventions that could actually prevent harm to self or others. So, I will vote no, but the die is pre-cast for passage based on the compromise.

A contractor registration bill is on hold on our calendar until April while legislative leaders and the governor seek compromise.

The veto of the rental housing registry bill is playing out under another tactic. The Senate moved $20 million for housing from the budget into the registry bill. Everyone wants that federal money to move forward. Will that result in a caving-in on the registry? That is yet to be seen.

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My Committee Bills

House Health Care contributed four to the stack of bills on the calendar. One was just technical updates to some outdated language in statutes.

Another requires hospitals to adopt uniform programs for their free care versus bad debt programs. Under federal requirements, they must have these programs in place, but the state’s health care advocate came to us with a concern about how difficult it was when each hospital had different policies within our small state. The hospital association agreed it was a problem, and they worked with the advocate on language to create the same minimum standards for everyone. 

This kind of “consensus bill” – where the parties work together to present a solution – is more frequent than folks might think, because they don’t attract news media attention since they are able to move through the legislative process without controversy or debate.

We also passed a bill requiring hearing aid coverage to be added to some health insurance policies. It is extremely narrow, only affecting about three percent of insurance products or about 20,000 Vermonters. The testimony about the importance of hearing aid coverage was compelling. Most testimony about specific problems is compelling. I was the sole “no” vote on our committee. Why? 

We have an incredibly inequitable system for access to health care. The only ones who strong access are the poorest and the wealthiest folks, or those, regardless of income, who have the good fortune to work for an employer who can afford to offer insurance that is rich in benefits and has low-cost sharing. While it may make sense to ensure that very low-income Vermonters have access to dental, eye and hearing aid services, it doesn’t make sense to pick and choose which other insurance products are mandated to add benefits, particularly when so many people struggle to afford any insurance at all.

The reason we added the new hearing aid benefit for just one small group was purely because it is the only insurance group that we have full state control over. The others all have elements of federal control. As one example, there are some older Vermonters who are just over the (very low) income threshold for getting premium assistance for Medicare. They are paying as much as 20 percent of their income for the federal premium. They are not getting help with hearing aids.

We could increase premium assistance but have not chosen to. We cannot require the federal government to add hearing aid coverage, but we could create a state-run program to assist with hearing aids. We have not chosen to do so. It’s easy for us to tell an insurance company that they must contribute to hearing aids, because it doesn’t come out of the state budget. But someone does still have to pay for it, no matter how smaller that “extra” may be.

Who are these three percent? It is those businesses who buy insurance who have more than 100 employees (so they are not mandated to buy Health Exchange products) but who have not found a way, or are a bit too small, to escape state regulation by becoming self-insured. In a change in a 5-year period, 80,000 rather than 20,000 Vermonters were on these plans. Because of our choices to increase requirements, the self-insured plans went from half to two-thirds of all commercial plans and we have lost any ability to impose any controls on them. In other words, our goals backfired.

A newly imposed benefit for this small remaining group risks tipping the equity scale even further, which is why I opposed it.

Our fourth bill adds regulation to “PBMs” across all commercial insurance. What is a PBM? It’s a pharmacy benefits manager, a company that contracts with your insurance company to run your pharmacy coverage plan. The insurance companies can save a lot of money on your behalf (saving on your premium costs) by having national companies negotiate with drug manufacturers to get the best prices, because the PBMs represent a much bigger buying pool.

But how are they paid for their services? It is often through one or both of these mechanisms: They barter with drug manufacturers to be paid a rebate in exchange for putting that particular drug on the “preferred drug list” for your plan. They control which drugs you can get for a lower co-pay based on what they are getting paid by the manufacturer. Another mechanism is that they get reimbursed for the drugs by the insurer but pay the pharmacy less than what the insurer has paid them. This “price spread” is their profit.

Sometimes, your co-pay or co-insurance is actually higher than the cost of the drug, and that excess goes back as PBM profits. The pharmacies in some cases get paid less that what they have to pay to get the drugs for patients. It is an incredibly complex system of the flow of money and drug costs, and it is putting local pharmacies out of business in Vermont. In the past 10 years, we have gone from 42 to 16 independent (non-chain) pharmacies in the state. 

Our bill only begins to scratch the surface. It would eliminate the “gag clauses” that PBMs use in their contracts with pharmacies that ban your pharmacist from telling you about less expensive options. I got a big smile of relief from Northfield Pharmacy when I told them about this part. It starts the process of greater oversight and asks our Department of Financial Regulation to report back next year on the next steps we should be taking to protect access and cost for Vermonters – and to save our local pharmacies.

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Please contact me or Ken at any time with comments or input at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. It is an honor to represent you.