June 23, 2018 Legislative Update, budget saga continues

Legislative Update

Rep. Anne Donahue

June 23, 2018

Was it only insider baseball, that doesn’t really matter?

I don’t think so. I think voters need to know about the very sad – shocking, even -- chain of events in our state’s House of Representatives Friday night.

Someone’s word has always meant something before. A commitment was a commitment. A handshake on an agreement could be counted on.

On Friday morning, the governor and the Speaker of the House, with the support of the minority leadership, finally reached a compromise on the question of the state’s property tax rates.

As in true compromise, both sides gave something. In fact, given the depth of the disagreement, both sides gave a lot in the interests of resolving the budget stalemate and acting in the best interests of the state rather than based on pride or saving face.

The governor agreed to allow the non-homestead tax rate to go up to the level proposed in the new Senate budget and tax bill, despite his resistance to any tax rate increase. The contested “one-time” lawsuit settlement funds would stay in the teacher’s retirement fund paydown.

The House Democratic leadership agreed to allow the expected surplus tax revenue coming in this year to be set aside in a 50-50 division: half to add to paying down the teacher retirement debt, and half to the Education Fund for next year, to potentially bring the non-homestead rate back down.

The amount of money involved is as of yet uncertain, and no legislature can bind the action of a future legislature. The governor was willing to accept in good faith that legislators returning next year would stand by the intent to use those revenues, once determined, to lower the tax rate.

No longer was there a proposal to use hoped-for future savings to pay for a tax rate reduction this year. This is applying actual money, after it is received.

But the House leadership was agreeing to have this surplus allocated for next year, despite its resistance to using surplus money to bring down a tax rate.

This agreement was due to come before the full House in the early afternoon. Suddenly, there was delay, after delay, after delay, for the House to be called to order.

Behind closed doors, leadership of the Senate was objecting to the terms of the agreement between the House Speaker and the governor and demanding that the Speaker back out of it.

So she did. She backed out of her agreement.

At that point, House Democratic leaders proposed a compromise of the compromise: divide the anticipated surplus three ways, between the retirement fund, the education fund, and the last third reverting to the general fund.

Chairs of the money committees (Appropriations and Ways and Means) asked their Republican members if they supported the revised deal as a midpoint between the governor and the Senate leadership. They did. The new proposal was unanimously supported by both committees.

Before bringing that proposal to the House floor, there were new cold feet: what if the Senate still didn’t accept it? What if the governor refused the revised division of the revenues?

So they reversed themselves again, and brought out a plan to essentially accept the Senate bill with only minor changes, ditching any compromises and turning their backs on both the agreement with the governor and with their own later proposal made to their Republican colleagues. 

They did not ask for a vote of their own committees on the new plan; they knew they would have lost the unanimous support that they sought just hours before.

When an amendment was offered on the House floor to restore the language of the 3-way split compromise, they stood to oppose it, raising philosophical objections to the concept: the very concept that they had proposed to their committees just a few hours earlier.

When a stunned member of the committee asked for a brief recess to discuss this with his chair, the Speaker refused. In my 16 years in the House, this is the first time I have every seen any Speaker refuse a request for a brief recess.

The process was now well into the night, and some members had left. When the roll was called on the vote for restoring the 3-way split, the amendment lost on a 46-61 vote, meaning that 43 members were already absent. The voting on this year’s state budget and taxes combination bill was happening with barely more than the 100 constitutionally required members.

Disgusted by having had two agreements broken, some dozen or so Republicans were determined to not allow the process to continue, hoping that if the vote were deferred to Monday, cooler heads could prevail. Loss of the quorum would achieve that; they began leaving their seats.

The Speaker, seeing what was happening, rushed into the final vote, catching members off guard before anyone could ask if there was a quorum. (There was not – but if it is not challenged, it is presumed to exist.)

She made an error, though – and I give her the benefit of the doubt in terming it an error. She failed to call on the member who still had a pending amendment offered in advance in the calendar, the House minority leader.

He cried foul, and she said that the vote, once taken, could not be withdrawn and the amendment could no longer be offered.

The idea that an amendment would be blocked from being offered is something else that I have never seen in my entire time in the House.

The unfortunate outcome is that instead of merely finishing the ongoing process once a quorum is achieved again Monday, there will need to be a request for reconsideration of the vote, which is permitted by the rules. That starts consideration of the bill all over again.

The prelude to the chain of events on the voting was a challenge to the constitutionality of the bill itself. Our constitution is pretty clear: all tax bills must start in the House.

This tax bill came from the Senate (tacked onto a completely unrelated vital records bill, so that it had a House number on it.) There was an easy fix – take the exact language from the Senate but give it a new House bill number and add any approved amendments to that.

Why not do that? Apparently, fear that it would offend the Senate.

If it was simply a matter of numbers was there any consequence to leaving it with the same number as sent over by the Senate?

The Independent member from Barre City who challenged it thought so, as did I. The constitution sets up different roles for House and Senate. What seems inconsequential in one moment of expedience sets a precedent for the future.

The challenge failed, and we went forward with debate on the bill, but the deference to the Senate was a foreshadowing of that next debate, where the House decided to bow to the desires of, and control by, the Senate.

I believe in a system of government with the checks and balances that come when there is more than one party, forcing dialogue among different perspectives. But for it to function, there must be respect for the process and for all members.

That was not present on Friday night.

I don’t know what will happen next. It will essentially be in the hands of the Senate whether to further gamble with the state’s future by refusing to consider the compromise that had been reached with the governor.

I do know that when commitments made to accept a compromise are broken, the ability to reach compromises in the future is severely impaired. It also destroys the ability to trust that agreements made within the compromise – such as a commitment to future intent – can be relied on.

What I can only hope is that at some point in the future, we will be able to look back on Friday’s events as an aberration, and not as a start of a new era where rancor and distrust become the norm.

***

Please stay in touch as you hear about issues affecting you and to keep me informed about your views. You can reach me at adonahue@leg.state.vt.us. Thank you for the honor of representing you. My blog of legislative updates can be found at representativeannedonahue.blogspot.com.

June 17, 2018 veto override update

Legislative Update, June 17, 2018

H. 13 Veto Override Vote

Rep. Anne Donahue

This will be a somewhat meandering, think-aloud commentary on the budget stalemate and pending veto override vote. I’m sharing it with those who have written about the vote and those of you on my email list, but not in the Northfield News or Front Porch Forum, because you can better engage in dialogue if it generates more questions than answers. There is too much complexity for sound bites, and I’m sharing thoughts that I’d might not want to share in a more public forum (understanding, of course, that email is a public forum …)

Near the end of our regular session, I voted for the fy 2019 budget and against the tax bill. If the reason for opposing the tax bill was the increase in property taxes, that would be an inconsistent vote, since the money to prevent the tax increase was being appropriated elsewhere in the budget bill.

That wasn’t the reason for my vote. The budget was a good, reasonable, restrained budget. The increase in property taxes reflected the education budget decided upon by voters, with the primary state role only being to come up with the money through the traditional combination of a standard share of the general fund plus by setting an adequate property tax rate.

We had some bonus money from a tobacco case settlement, ergo called “one-time money” since it won’t repeat in the annual revenue cycle. Investing it in artificially reduced property taxes for a year, rather than putting it into a one-time investment, didn’t make much sense to me. Among other things, it would exacerbate the existing problem of the disconnect between local budget votes and tax rates: increase the budget but get no tax increase.

I voted against the tax bill for other reasons, primarily because it failed to add aggressive steps to deal with future education spending. We have a big problem when we try to say that local spending determines local property taxes, because it is false in significant ways. We have a statewide property tax that pools the money and pays out to high spending towns at the expense of low spending towns. That’s why the focus on maintaining “local decision-making” over schools is a false construct. They aren’t just local decisions, but we’re allowing them to be made locally. We need a different split between state and local shares. There are other complex problems that further add to the inequities – including the challenges of the “common level of appraisal” that attempts to compare values across the state -- and we continue to punt on solutions. It was not just that I had a theoretical desire to see progress on these issues. Some steps were included in earlier versions of the bill but dropped out, and were in proposed amendments that were rejected.

I was also concerned (though I wouldn’t have voted against the tax bill on this issue alone) about the lack of transparency regarding the tax shifting that we did with the state income tax. We claimed to adjust rates to, on average, make people whole for the increase in state taxes that would have occurred as a consequence of the mechanics of the federal tax reduction. If we hadn’t, there would have been a big bonus to the state coffers, and the benefits people are getting from the federal cut would have been reduced. But we didn’t actually give it all back. We used a small piece of it for two other (worthy) goals: eliminating the tax on Social Security for low income retirees and increasing the earned income tax credit for low income workers. The problem is that we didn’t tell the public that this was how we funded those two pieces of resulting reduced state revenue.

But the bottom line in terms of the budget is that I would not have voted to sustain the veto of the budget we passed in May. I would have gone against the governor because I disagreed with his position. I would have voted to sustain the veto of the tax bill. I would have stayed consistent with my prior votes on both bills.

But there was never going to be a veto override vote. That was a plan made by the Democratic majority of the House and Senate. They laid down the gauntlet early on, ending the session without scheduling an override vote date and thus telling the governor that if he vetoed the bills, he would have to call a special (new) session. That created the opportunity to renegotiate everything and anything. We are now in a new session, and all bills from last session that did not get passed and signed are dead. Everything must start over.

This is where the news media sound bites and blame game began in earnest. There has been talk about the governor throwing in last minute proposals and demands. That simply isn’t true. He presented a comprehensive, balanced budget in January that incorporated all the mechanisms to achieve his aim of not raising taxes or fees, including property tax rates – and that was before anyone knew about the extra settlement money.

The legislature didn’t like some of it. That’s its prerogative. The new budget spent more on assorted items but remained balanced, in part thanks to higher-than-projected tax revenues and in part due to the bonus money. The governor did not threaten to veto the budget saying, “I am opposed to your spending choices and any increased spending.” He met the legislature half way, saying, “Go ahead with your added spending, but keep the tax rates level by using some of the increased revenues to stay with my original budget target of not increasing taxes.” He presented ideas about how that could be achieved without cutting the other spending through using the one-time money as a loan based on planned future saving – savings through combining some of the plans already discussed earlier in the session. I thought that was not a great idea to rely on planned future savings, which is part of why I did not support it, but these were direct responses to the legislature’s decisions to try to avert a veto, not last-minute new proposals.

Ironically, part of the jump in property tax rates this year is that the legislative majority opted last year to use one-time money (from the reserves) to equalize the money not saved when it rejected the governor’s proposal for a statewide teacher’s healthcare benefit. Those reserves had to be refilled this year. Using one-time money was not a good idea then, either; it was not a good compromise, but the governor lost any room to push for a stronger resolution by responding to news media inquiries immediately after that budget veto regarding whether a stalemate would create the risk of a government shutdown. He said it would not – because he would compromise his position before he would allow that to happen. (Any wonder why he refused to say the same thing this year – and thus was being blamed almost immediately for creating the supposed risk of a shutdown?)

The Democratic majority wants to invest the settlement money into the debt we owe on the teacher’s retirement fund, which raises the question of how we have such a staggering debt – and why anyone would not want to try to begin to address it. The shortfall came from underfunding what the actuaries said we needed back in the 1990’s. But just a few years ago, we adopted an aggressive plan not just to meet current payments, but to begin restoring the shortfall. That is now part of the budget every year, including this year. In other words, the proposed use of the extra revenue to put towards the retirement fund would be an extra investment – and it’s not a bad idea. But failing to do it is not a shortchanging of the fund, which we are already rebuilding.

Now both sides are involved in what I think is a foolhardy game of blaming each other for the specter of a shutdown. It’s foolhardy because I don’t think the public cares who would be at fault if it happened. The public would be mighty mad at both sides for failing to resolve the stalemate; no one wins on that one. And in fact, both sides would share the blame. I think the media gets a share of the blame on this as well, by early and often raising the “what if” question, long before it was really any threat at all. Given last year, the governor was bound to say, “I’m not changing my position but it will be the Democrats at fault,” and of course the Democrats had to push back and say “we’re willing to compromise so it will be his fault.” The prospect of a shutdown has now become a big focus in the media and thus the public eye and has helped back both sides into corners and contributed to a stalemate that now brings us to the point of brinksmanship.

One immediate result that has been a major distraction and that has delayed progress has been the legislature’s passage of H. 13 – the budget created during the new session – and its inevitable veto, leading to the vote on whether to override it that is expected this week. I already referenced that we can’t have a veto session, because the legislature ended the session without holding a date open. But we can, in this new session, pass new bills that can be vetoed, and we can have a veto override vote of that.

The anticipated process was that there would be negotiations resulting in a new, compromise, tax bill and budget bill, and we would be called in to take it up and vote on it (as occurred last year during the veto session, after a veto override vote failed.) Instead the Democrats, frustrated by perceived intransigence of the governor and unwilling to compromise themselves, parlayed the “shutdown threat” into a sound bite solution: let’s pass a new budget that only has all the things both side agree on, and thus be able to reassure everyone there won’t be a shutdown, and then negotiate just the areas of disagreement. (Among other things, that would allow for accusing anyone who voted against it as not caring whether there was a government shutdown.) The new “budget” bill included all the regular budget items but held aside the disputed surplus money. It then also included all the items in the tax bill that had consensus – the state income taxes changes. Plus one other thing: it included a flat tax rate for residential property (something already achieved with some of the added revenue), but left in the increase for the non-residential property tax rate. So it did not include only items not in dispute. It included a default position – barring a future compromise and revision – of the underlying tax increase.

The legislature said that suggesting that this meant they would allow that default to occur by not resolving the tax dispute was an unfair suggestion that it would fail in its commitment to find a solution, and that the governor was rejecting it purely because he wanted “all the cards” for negotiating the tax solution. But that is a two-way street. The Democratic majority was not willing to have the default in H. 13 to be a level tax rate because it would mean trusting the governor to still be motivated to resolve the dispute, and the legislature wants to be the one to hold the cards.

Just as a reminder, non-residential doesn’t mean out-of-stater. It means Vermonters who run businesses and provide jobs; it means renters who pay property tax indirectly through their rents; it means folks with a camp; yes, also (a minority of the total), out-of-state property owners. The irony of leaving the residential tax rate flat and increasing the non-residential rate is that part of the reason for two rates is that the residential rate is tied to actual budget decisions under the theory that those who don’t get to vote on the budget shouldn’t have their taxes tied to that vote. A business owner, for example, may live in another town (where their residential tax is impacted by their vote), but they don’t vote in the town where the property is being taxed. So agreeing to keep residential taxes flat but increasing non-residential is the reverse of any move to try to refocus voters on why they need to be vigilant about cost containment.

There is something else that has changed between passing the original budget and what is in front of us now with the new combination budget and tax bill. Last week, we received yet another revenue upgrade. For the first time in years, the economy is perking up, and instead of facing rescissions due to lower-than-projected revenue, we have an increase in regular revenue. This is no longer about “one-time” money from a lawsuit settlement.

If we are taking in more taxes than we need to fund our planned expenditures, we have two choices: add to our spending, or return it to taxpayers. In the ideal world, we would return it to those who paid it (income tax payers and business tax payers), but that would be hopelessly complex. But it could be used to hold property taxes down. It’s not enough to keep property tax rates completely flat, but if in combination a part of the one-time funds were used to pay some of the one-time education fund expense that exist (namely, the tax incentives given to towns under Act 46 mergers), we could achieve the compromise that has been eluding us.

In light of that, it would make no sense whatsoever to proceed with a budget that injects the non-residential rate increase as the default position. It also would make no sense to argue for a budget that leaves a flat rate as the default. There is no reason to pass a bill (assuming there ever was) that creates this confounding additional dispute on a “default position” in order to achieve a claimed relief from the threat of a shutdown. There is less reason than there ever was to respond to the red herring of a shutdown with anything short of addressing the actual dispute: whether we should or should not – need or do not need – to increase property tax rates.

So I will be voting to sustain the governor’s veto of H. 13, the false consensus bill, and hoping that getting that distraction out of the way clears the way to start the real route to problem-solving. The real route is almost always to address the problem head on.

May 25, 2018 Legislative Update

Sigh.

I held off on an end-of-session update to be able to include the outcome of our special session last week, but we did nothing but “gavel in and gavel out.”

It turns out that while the governor can call us into a special session, we, the body (which actually means the leadership), can then decide how long it goes.

Since the leadership wants more time to work in committee and also pass new bills, we’re breaking for a week to allow that work time, and then reconvening next week, probably for several days.

A solution to the stalemate between the governor and the legislature seems daunting, given the non-negotiable positions they have laid out on the budget and taxes.

I’m going to try to summarize what those are and share my perspective, understanding that everyone’s description of the facts is biased – intentionally or not -- based on our own points of view.

Understanding what happened last year is absolutely critical to this year’s stalemate.

The governor wanted to protect Vermonters from a big jump in property taxes, and a change that was occurring in teacher’s health insurance gave a unique opportunity to shift to a statewide contract and save an estimated $17 million.

The legislature refused to make the insurance change, leading to a veto of the budget and tax rate bills.

The compromise was a façade, and both sides could claim victory: no insurance plan change, but the $17 million was saved.

How? A big part of it was through using reserves to fill in the education fund. What we knew was that this would only defer the issue for a year and carry the deficit over to this year – and so here we are.

That deficit increased further for all the standard reasons of costs and higher budgets, despite school boards keeping a tight line on budget increases.

The core of our education financing is that local voters decide on budgets, and the state government then sets the tax rate necessary to fund those budgets.

In that sense, the House and Senate leaders are correct in saying that we are not the ones raising property taxes: the voters made that choice, in budgets adopted both last year and this.

But it’s more complicated than that.

First, we made the outcome artificially low last year, something voters would not have known in understanding budgets this year.

Second, our financing system, in its efforts at equity, create a disconnect.

Despite what a Northfield or Berlin voter decides about a local budget – and despite how restrained it might be – it is what all our school districts spend statewide that results in a large part of the rate that everyone pays.

So the governor is correct in saying that raising rates “because the voters made knowing choices” is a false attribution.

We, in state leadership, have done little over the years to either restructure the system or to help lay out a path for more sustainable budgets that reflect our shrinking number of students. (School consolidation makes sense for educational opportunity, but not for significant cost savings.)

As students go down but staffing stays the same, we end up in the situation of having both the highest per-pupil costs and the highest student-teacher ratio (by far) in the nation, without better educational results.

Something is wrong with this picture.

So the governor wants two things: a series of steps in a five-year plan to reduce costs, and an up front investment this year – money borrowed from the general fund – to keep the tax rate from going up.

The savings, he believes, will not only pay back the loan but also keep rates the same for five years plus generate more money that can be reinvested in other needs – higher ed or pre-K, for example.

The legislative leaders oppose the plan for two reasons.

They are skeptical of the savings and not supportive of some of the more aggressive measures, such as putting pressure on schools to reduce staffing ratios.

The source of the money is a bigger problem.

It is what is called “one-time money,” meaning we won’t have it from ordinary tax revenues next year. It comes from a settlement we received from past tobacco litigation.

So next year, if we don’t achieve the savings, we are stuck again with an even big gap and facing an even bigger rate jump.

I think it’s a mistake to keep tax rates down artificially through mechanisms that only push the problem down the line for a year. We already did that last year. Banking on a future savings plan is risky.

And if rates keep staying artificially stable, why would voters think there is any need to start reconsidering local budget in ways such as evaluating staffing ratios?

However, the education funding bill the legislature passed is also very problematic because it does little to help address the core problem of property taxes increasing faster than the economy, despite fewer students.

It also does nothing to add protection for low-spending towns having to pay towards higher-spending towns. That would be easy to do, by reducing the percentage of state payments versus locally raised money to pay local budgets.

In other words, I think the governor’s five-year savings plan is solid. I voted against the education funding bill because it lacked measures that could have and should have been included to put more pressure on “high spenders.”

But we shouldn’t rely on these potential savings in advance and borrow one-time money that will have to be paid back from the core statewide budget in future years.

There is one piece to both sides that isn’t getting much notice. Both what we passed and what the governor proposes includes a built-in tax increase for some taxpayers, mostly middle-income ones.

One of the biggest costs to our system is the money we pay back for income sensitivity, so that at lower incomes – actually, all but upper incomes -- taxes are paid based on income level rather than property value.

That gets capped at a homestead value of $300,000, and the cap is being reduced. Those making more than the medium income in Vermont but with higher value homes will thus be seeing a tax increase, regardless of which plan (or what compromise) is eventually adopted.

Stay tuned.

***

A lot of bills were passed in the last week of the session, and some that didn’t quite make deadline will get passed during our special session. Whether that’s good or bad will depend upon whether you support the bill.

One that is being taken up in my Health Care Committee is a bill that requires lower co-pays for chiropractic visits, on the theory that the co-pays should fall somewhere between a primary doctor co-pay and a specialty co-pay rather than as a specialty visit.

I think it requires more thought about overall impact on health premiums and how we spread costs, but there is some good logic behind it. The problem is that we are now heading into June, and the insurance rate-setting oversight process is well underway.

A lot of work would have to be re-done to incorporate it at this point in time. The boat has been missed. I think we need to wait until next year, not jam it through in this late, special session.

Another one is a bill that makes changes to Act 250 to protect forestland. I think it has some solid features. But the state has a major study underway – under the legislature’s directive – on broader Act 250 revisions, and it is due out this fall.

So that’s another one that I think needs to wait.

Then there is the bill that adds yet another piece to our “we must do something about Fair Haven” changes in law (whether they make sense or not.)

This one relates to threats being make against a school, and whether they result in reasonable fear being experienced by “any person.”

I was assured by our House Judiciary Committee it had no interest in moving this, so I held off on preparing an amendment to ensure it was limited to when the fear caused to others was foreseeable and intentional on the part of the person making the threat.

Now the bill is being moved forward again. After all, we have extra time!

Consider what just happened in Randolph.

Two kids get in a fight; one says in anger that he’s going to “shoot up the school.” We used to say, “your mamma wears Army boots” as our fighting words, but school shootings are what’s in all the news.

Does he realize the other kid is going to report this to his parents, who report it to the police, who report it to the schools for a precautionary districtwide school closing until investigated, which thereby strikes reasonable fear in many parents’ hearts?

(What if it got reported on social media, and someone in Arizona was put in fear of what might happen in Vermont?)

Under this proposed law, the kid would be guilty of a felony-level crime, punishable for an 18-year-old by three years in prison.

I know times have changed since it was a day’s suspension for calling in a bomb scare to get out of a test. The fear of something actually happening is real.

I still think we should punish based on the fear a person intends to cause, not an unforeseen impact on any other person under the sun.

***

Please stay in touch as you hear about issues affecting you and to keep me informed about your views. You can reach me at adonahue@leg.state.vt.us. You can find all of my updates at representativeannedonahue.blogspot.com. Thank you for the honor of representing you.

May 5, 2018 Legislative Update

Legislative Update

Rep. Anne Donahue

May 5, 2018

Home stretch fever has hit: rule suspensions to whip bills through quickly, long days on the floor, conference committees to work out differences between House and Senate, and committee time squeezed into random time slots to review proposals coming back from the Senate.

The “Donahue rule” [aka, “the 24-hour rule”] remains in effect, an unofficial policy that started some eight or so years ago after a session where I dug my heels in over being forced to vote on bills that we were seeing for the first time, still warm from the printer, rewritten in a conference committee. Since then the minority party has drawn the line to say that it will not suspend a rule to move a bill in less than 24 hours unless everyone is comfortable that they have had time to review and digest it. For many minor bills, it isn’t a problem. For major ones, the leadership has to plan for adequate timing, because a rules suspension to move faster than that requires a three-quarters vote, so this is a requirement we can enforce.

Will we actually adjourn next Saturday? Will we be back for a veto session? It’s anyone’s guess right now, as the power-brokers in the House and Senate battle differences with the Governor. The headliners are the tax bill (and property taxes), the budget, the minimum wage increase, and paid family leave, but there are many other issues in contention.

***

Water Clean-Up

It is our dirty little secret that rather than the pristine mountain streams and lakes that tourists envision, we have a serious pollution problem that shows up most blatantly when all those streams flow into Lake Champlain and it blooms with toxic algae in the summer.

So does a restaurant and hotel tax increase (on those tourists, along with ourselves) make sense as a way to address the multi-million dollar federal cleanup mandate? Raising this money in some fashion is a non-negotiable, as far as I’m concerned. I don’t think this proposed tax is the best route. I liked the proposal from Rep. Cynthia Browning to dig into all possible revenue sources that are directly tied to sources of pollution – but that got knocked when tied to waiting a year to making a decision.

But here’s the thing: despite media reports that we voted for the rooms-and-meals tax, the bill doesn’t put it into effect until 2020. We have funding already in place until then, but we keep doing temporary measures without establishing a long-term funding plan. We’ve put it off for several years in a row. So I voted in support of the bill. I think we need the hammer over our heads. It will push everyone to work on a better solution, because if we don’t, we’ll be stuck with this one.

***

Missing Commerce

Twice last week, we had long floor debates on bills that will have a significant impact on our business community, but that never went through the Commerce and Economic Development Committee for review. They just came straight from the Judiciary Committee.

The first was a bill that imposes a first-in-the-nation liability to cover medical monitoring for persons who have been exposed to toxic waste by a chemicals company, and might develop an illness in the future as a result. The concept initially sounds reasonable, until you drill into details: “exposure” means even .001 percent more than routine public exposure; “risk of a related illness” means .001 percent increased risk than the general public of developing the disease; and “reasonably necessary” monitoring means that your doctor has agreed to recommend it.

The cost will be borne by liability insurers for businesses, and insurance is the jurisdiction and expertise of the Commerce and Economic Development committee, not Judiciary. However, a motion to send it there failed 55-64, an unusually close vote that showed some Democratic support for more careful scrutiny.

There was a similar debate over a consumer protection bill that creates a presumption that certain clauses in contracts are unconscionable, and that businesses can be fined for using them. Currently, courts make these rulings: unconscionable clauses can result in an entire contract being thrown out in favor of a consumer. This bill would, in effect, predetermine that some clauses should not be enforced, regardless of the willingness of a consumer to agree to certain conditions.

We were deluged with messages from every sector of our outdoor recreation industry about the economic impact on waiver agreements for sports that have known risks. Again, a motion to send the bill for review by the Commerce and Economic Development Committee failed 57-73, again with the support of some Democrats. An amendment to specifically exempt the recreation industry – which the Judiciary Committee had claimed would not be affected by the bill -- failed 72-59.

I voted against both bills in the form they were being presented.

***

Health Care Mandate

I’m on the conference committee with the Senate regarding our bill to create an individual mandate for purchasing health insurance to replace the one no longer being enforced by the federal government. A requirement that everyone has coverage is an essential trade-off if health insurance is being required to cover conditions that you already have when you sign up.

My committee didn’t include a penalty for not complying, because we wanted a work group to think this through this very carefully and make recommendations for us for next year: What exemptions should apply? What should the penalty be?

But we thought it was essential to put the mandate in place so that people were forewarned that this was happening. Our insurance experts told us that without doing at least that, insurance rates for everyone else would increase by two percent even in the first year (two percent on top of whatever increase was already occurring due to cost pressures.)

The Senate supported having a work group, but not the mandate itself. When the three Senators and three House members met for our first conference, we learned that the issue is that one of the Senators believes that there has to be a penalty included right from the start, or it’s worthless.

Do we come back with a compromise that creates a $25 penalty for the interim? Stand our ground and risk the bill dying? Conference committees are a surprisingly formal process of offer and counter-offer. The fate of this bill will be determined by this negotiating process.

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Who Is a Child?

Under a bill we passed this week on juvenile court, a child can be defined as someone who is 18 or 19 if a judge thinks the case should be heard in Family Court. (That’s different even from the “youthful offender” status we have for those 18-to-22 years old.) Although the law will exclude violent felonies, I nonetheless thought we were being a bit inconsistent as policy-makers, given the level of urgency we’ve been placing on coming up with a new law so that in the future, someone like 18-year-old Jack Sawyer can be locked up for life.

Though I supported the Family Court bill, I am introducing an amendment to ensure that these young adults have the right to have their cases heard in a Criminal Court if that is what they want. The right to a jury trial is one of the things at stake. In addition, some may prefer an adult court fine or probation over the intrusion of having the Department of Children and Families in their lives.

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DNA Rights

Speaking of civil rights, the new parentage law has come back from conference committee with a final, agreed-upon version. It includes requiring that DNA taken from an uninvolved family member by court order must be destroyed after it is no longer needed and the case is final.

An example of this situation would be your brother’s girlfriend suing to establish paternity of her child after your brother splits town. Under this law, you can be required to provide a DNA sample to see if there is a family link that might establish that your brother is the baby’s father.

I was very concerned about this, and the House Judiciary Committee did accept some of the protections I proposed, such as the right to a hearing. It refused my amendment to have the DNA destroyed, and the amendment was defeated on the House floor by a single vote. I brought the issue to the Senate; they added it in. Now the House Judiciary Committee has accepted its inclusion.

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Please stay in touch as you hear about issues affecting you and to keep me informed about your views. You can reach me at adonahue@leg.state.vt.us. You can find all of my updates at representativeannedonahue.blogspot.com. Thank you for the honor of representing you.

April 21, 2018 Legislative Update

A few years ago, I remember a session that felt as though it was rushing to early closure, without enough time to address issues still ahead of us. This year, it seems as though we are ahead of schedule. The difference is the effect of weather. That past session, an early spring created a sense of time running short. This year, the damp and cold makes it feel as though adjournment is months away, not weeks.

It is an election year, however, which means politics is more entangled with legislative actions. There will be bills sent to the governor despite knowledge that they will be vetoed with the primary intent of placing the governor in a bad light, and there will be actions by the governor for the purpose of making a Democratically-controlled legislature look unreasonable. Such is the price of a democracy, where allowing for robust debate from different perspectives really does usually help foster better outcomes in the end.

Toxics Bill Veto

The first such bill would expand state regulation of toxic chemicals in children’s products. It was vetoed by the governor last week and is now coming before the House for the override vote. The governor, in his veto message, said it was a measure that would be bad for business – not a very strong rebuttal to the effort to make him appear willing to sacrifice the health of children.

The reality is that we have a strong law passed just a few years ago that allows the Commissioner of Health to ban “chemicals of high concern” on the recommendations of a committee that includes leaders of several state agencies, based on scientific evidence. This new version would give the Commissioner sole authority to decide that a substance might expose children to harm, and to do so based upon just a single study, regardless of what the weight of the overall evidence is. That’s why it’s bad for business, and for consumers as well. There could be an awful lot of products that are banned or have warning labels required when there isn’t valid evidence of potential harm. I voted against it and will support the governor’s veto.

Education Funding

Last spring, the governor vetoed the budget in an effort to push for cost containment in education funding through a statewide contract for teacher’s health insurance. He won widespread support – it was the legislature that looked bad – but he caved early by assuring everyone that he would not stand his ground to the point of having the state face a Washington-type shutdown. That’s sort of showing your cards in advance.

The compromise deal instead reduced the projected increase in the property tax by spending education fund reserves and one-time funds. It made it appear that the savings the governor wanted were achieved, but everyone knew it would come back and bite this year. It has. There is now a $40 million shortfall in the education fund and property tax rates are being driven much higher despite the very conservative budgets passed by towns this spring. The governor is pushing for savings again, but he will be hard pressed to identify where the money can come from.

The efforts on the part of the legislature, you may recall, have been on changing where the money comes from but not how much is spent. The House bill creating an income tax surcharge to reduce the amount paid through property taxes is still being reviewed in the Senate.

Thus far this year the overall state budget is toeing the governor’s line on “no new taxes or fees,” but there are taxes and fees being snuck into side bills, nickel-and-diming taxpayers. The governor is threatening to veto all of those, which could add up to a fairly long list. I voted against most, but not all of them.

Universal Primary Care

My committee is in the final decision-making phase regarding a Senate bill that would take the next step in establishing access to primary health care for all in Vermont. There is a great deal of value to an approach to curbing health care costs that begins by ensuring that everyone can receive early interventions that can prevent high cost health care needs later. It would also start us on the path towards more equitable access to health care, regardless of what coverage one’s job does or does not offer. That’s something I strongly support.

While almost all Vermonters have some type of insurance, the cost burden is extremely inequitable. The very poor (through Medicaid) and the very wealthy (with only a small percentage of their job compensation going towards health insurance) pay relatively little or nothing. However, some of those in the middle end up with very high premiums and with co-pay levels that make it still too expensive to access care.

The problem, however, is that – for better or worse – we have already embarked on a path to health care cost reform that is making huge alterations in how money flows through the system and how providers are paid. To try to take on a second major, overlapping restructuring at the same time would risk dooming both to failure. There just isn’t enough bandwidth to do it all at once. So I will be voting against the bill in the committee.

Mental Health Progress

Two weeks ago, I reported on the University of Vermont Health Network’s concept of developing a new inpatient wing for psychiatry at Central Vermont Medical Center. The idea has received positive endorsement in the legislature. Among other things, it brings inpatient psychiatry more fully under the wing of our health and hospitals system, instead of being relegated – based on history and discrimination – to being a state function. It has also meant rejection of the idea of creating a 20-bed inpatient wing at a proposed new mega-prison in St. Albans. (That proposal included closing some of our more antiquated prisons and bringing back Vermonters placed in out-of-state prisons.)

The UVM project is still at least four years down the line, however, so the need for a more immediate interim solution to address the desperate shortage of inpatient beds remained with us. Now a potential solution has emerged for that as well. The Brattleboro Retreat has existing space that is being used for offices but can be rehabilitated and restored for hospital use during these next several years. This plan that would come at a much lower cost to taxpayers ($17 million versus $29 million over four years) – and be online sooner – than the administration’s original plan for a temporary 12-bed forensic unit. By the time the CVMC unit is ready, the Retreat will need to be phasing out some of its adult inpatient care because of loss of a federal funding waiver, and that space can be transitioned to much-needed stepdown and geriatric residential programs. Our health care committee has endorsed this plan. I am quite proud of the significant role I played in pushing the state to seek out this better solution.

When Is It a Crime?

Everyone knows that if you punch someone in the nose, it’s a crime. What if you swing and miss? Appropriately enough, that’s still a crime. You don’t get the benefit of having failed in your attempt, and the potential punishment is the same. But what if you are heading down the street with the intent to punch someone, but you haven’t arrived there yet? Have you committed a crime at that point? When does your intent become an attempt? That is the issue in the case of the young man who had put together a plan to shoot up Fair Haven Union High School. The Supreme Court has ruled that he had not yet attempted to actually commit the horrific intended actions, so the charges are now likely to be dismissed.

Many people are horrified at the thought that current law might mean waiting until a person intent on harm actually walks onto school grounds with his guns before he can be arrested. The governor has gone so far as to say that the man’s defense attorneys are exploiting a loophole to get him set free. That’s hardly fair. All his attorneys have done is to point out that he has not committed a crime under our laws.

However, the push is now on for the Legislature to redefine “attempt” crimes so that they would cover this kind of situation in the future. (It cannot, under the constitution, be applied retroactively.) The push, in fact, is to have us recklessly rush changes through to make a show of how much we care for our kids – but without caring in the least whether we are passing thoughtful legislation. When you change a law, you change it for all circumstances, not just for the compelling situation in front of you. That’s the meaning of the old adage, “Hard cases make bad law.”

I certainly think we must address the issue of stopping individuals who are actively engaging in planning a mass murder. But I’m not sure someone walking down the road intending to beat someone up should face the same jail time as a person who actually beats someone up. I think we need to consider all the consequences before rushing to rewrite law in reaction to one situation. The epidemic of gun violence and the fact that its reality has hit home in Vermont seems to be leading us into legislating by hysteria this year. We are stumbling over ourselves to prove how much we care without regard to whether our actions are going to help – and to whether they might actually cause harm.

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Please stay in touch as you hear about issues affecting you and to keep me informed about your views. You can reach me at adonahue@leg.state.vt.us. Thank you for the honor of representing you.

April 7, 2018 Legislative Update

Heading into the final four scheduled weeks of the session, the focus in Montpelier has turned back to our committee work, taking up bills passed by the Senate. In House Health Care, the biggest bill we’re received is a proposal to evaluate creation of a universally accessible primary care system. The original bill that passed the Senate Health and Welfare Committee laid out the steps to create a publicly-funded system, with no co-pays, that gave every Vermonter access to primary care. Its statement of intent included that this was to be a first step towards reestablishing a path to a full single-payer health care system. (Medicare coverage would stay as it is, but the state would cover copays.)

The Senate Appropriations Committee got cold feet over the financial viability of the plan and reshaped it to be an evaluation of options for creating universal access, but not necessarily through public funding. Supporters of single-payer were aghast at the change, and some [not all] are saying they would prefer no action at all. We are already being inundated with emails urging us to go back to the original version of the bill.

There are some huge underlying challenges, and a fundamental bottom line. Our health care spending is heavily controlled by the federal government. We take in so much in federal “matching dollars” that we actually receive more than what we pay out in taxes. In other words, our neighbors in other states are subsidizing us. So striking out on our own is not an option. That is a big part of why Vermont’s vision of its own single-payer system was doomed to failure. That is also what moved us into our current health reform initiative, the “all payer” model that uses a single organization (called an accountable care organization) to funnel money from payers into the health care system to make it more streamlined, with better coordination of care.

It wasn’t based on own choice to pick that system. The federal government set it up for its own Medicare program, and we latched onto it with Medicaid to try to align systems. As private insurers join in, it has some real potential for managing our unwieldy system. It’s in its infancy and it still hard to tell whether we can actually get the Titanic to shift course. Having put at least some of our eggs into that basket, however, raises serious questions for me about whether we can overlay a second major change on top of the first one while it is still just getting off the ground. The broad concept for the new proposal isn’t very hard to grasp: if the state funds primary care for all, everyone’s insurance rates go down – your insurance is left only covering higher levels of care – so the cost savings is transferred to the new system.

However, in the new all-payer model, the ACO is being paid to provide all health care, including primary care. A person is attributed to the ACO’s payment model based upon being the patient of a participating provider. If all primary care doctors became part of a single-payer primary care system, the ACO role might become superfluous for primary care, yet it would need to remain for everything else, plus coordinate between systems. The more that we increase the shuffling of money between different entities and payment mechanisms, the more some of it gets lost in the transactional costs. If the major focus is making sure everyone has access to primary care, another route might be to focus solely on those who currently don’t have access, instead of creating a whole new system. That includes those without insurance, but also folks who can only afford insurance with very high copays and deductibles.

There is very strong evidence that getting good primary care saves in overall health care costs. Illnesses are intercepted earlier and are easier and less expensive to treat. People stay healthier. The evidence is more mixed over whether copays are still a barrier to getting care even if they are low, and thus should be eliminated, or whether they are a protection against overuse of care.  How much is it appropriate to have people hesitate (“Is this worth a $20 copay?”) before heading to the doctor? Obviously striking the balance is very dependent upon individual incomes (what percentage of your paycheck is that $20?) I’m not sure I buy into the idea that the ideal system would have no individual contribution at all for getting care – no “skin in the game.”

The bill that eventually passed the Senate includes evaluating the question of copays rather than starting with the assumption of a system without them and requires looking into methods other than a publicly-paid system to ensure everyone has access. Two questions will be before our committee. First: whether doing a major evaluation of options and mechanisms are likely enough to provide solid outcomes to be worth the cost. Second: whether we should be returning to some form of the original Senate bill and plunge forward with trying to make this happen, faster.

Legislative Update, Part 2

Pharmacy Costs

We are also grappling with the costs of prescription drugs. Specialty drugs are becoming the biggest new cost drivers. We heard data from Blue Cross Blue Shield that although these account for only one percent of the prescriptions written, they are 50 percent of the insurer’s pharmacy costs. These new drugs – you see the names like Humira and Enbrel on television ads -- are life changers for people with conditions that may have left them bedridden in the past. The costs, at least in part, are driven by the time and effort manufacturers put into developing them.

However, the whole arena of manufacturer pricing is kept in a black box. This year, we are taking a number of steps to try to push back. Three years ago we unanimously passed a first-in-the-country disclosure law that requires drug manufacturers to share information to justify the increases for the drugs with the biggest price jumps. The results were a bit disappointing because many of the answers were so vague. We plan to strengthen the bill this year.

There is also a bill to ban the “gag orders” that some drug distribution managers place on pharmacists, prohibiting them from telling customers about a lower cost alternative unless the customer directly asks.

The biggest initiative is to develop a Canadian import plan that would be organized by the state itself. Not every drug is less expensive there, but many are significantly cheaper. This would require receiving a federal waiver, but such waivers are directly permitted under the Affordable Care Act. An interesting aspect is that there is another state that is also aggressively pursuing this idea: Utah. Of particular interest, because Utah is one of the most conservative states, and Vermont one of the most liberal. The idea of teaming up on this is appealing!

There is a slightly more convoluted proposal the Senate has sent us regarding expanded bulk purchasing of drugs by the state. Since Vermont Medicaid already does this in a consortium with a number of other states, it isn’t clear what further gains this might bring.

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Mental Health Care

Just a few weeks ago, my committee said in a memo that it was time for hospitals to step up to the plate and recognize the importance of equity in addressing mental health conditions as a part of health care. Somehow the state keeps being expected to be in charge of providing psychiatric hospital care. Now the University of Vermont Health Network is doing just that – stepping up.

Though the proposal is not at all fleshed out yet, it would be based upon a master plan for future expansion of the Central Vermont Medical Center that would include a new psychiatric inpatient wing. That would add desperately needed capacity for Vermonters who are currently often waiting for days, and sometimes weeks, in emergency rooms waiting for a hospital bed. It would also mean we would more of our statewide psychiatric care into the modern era for the standard of care, which is to be fully integrated with a medical center, since mental health and other medical conditions are so deeply intertwined.

We still need to do more intensive planning for interim capacity, because that plan, if it does gel, will be several years in the making. But it was welcome news to many legislators’ ears.

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Please stay in touch as you hear about issues affecting you and to keep me informed about your views.You can reach me at adonahue@leg.state.vt.us. Thank you for the honor of representing you.

March 24, 2018 Legislative Update

We passed a $6.8 billion state budget last week that increased from last year by only 1.1 percent. It shifted a few spending priorities from the governor’s proposals but kept under his limit on growth in spending.

One priority area was the crisis in emergency rooms, where Vermonters are sometimes waiting for weeks for an inpatient psychiatric bed to open up. The governor’s budget added some outreach workers, and I suggested two other measures that were also funded in the House budget. One was expanding the toll-free Vermont Support Line (833-VT TALKS) to 24/7. It has shown huge success in peer support for individuals in crisis who might have otherwise gone to the emergency room because they didn’t know where to turn for help. Indeed, that funding will likely do more to help prevent suicide than any gun bill we pass.

The second was expanding supported housing for homeless individuals being discharged from the hospital. It doesn’t take a rocket scientist to figure out that if someone was at the level of psychiatric crisis to need to be in the hospital, and is discharged to homelessness, they will relapse and be back in the emergency room in short order.

The budget was not completely squeaky clean in terms of the “no new taxes or fees” pledge, though it came close. In separate tax bills, we held back some of the money that was to be returned to Vermonters by a restructuring of state income taxes. (Without the restructuring, the new federal tax law would have resulted in an increased state tax.) Of the $30 million, about $2 million went instead to fund the Social Security tax exemption that had been built into the governor’s budget through other cuts in spending.

We also added a tax on e-cigarettes – similar to the way we tax other nicotine products. If, in the same way as the others, it went into the health care fund, I would have supported it. Instead, it went to help fund added budget items that the governor had paid for through other spending cuts.

The tax bills included the new education funding proposal that shifts $60 million from property taxes to an income tax surcharge. There are pros and cons to the change, but I had a more basic objection. The income tax would be retroactive to this past January 1. The property tax reduction would not be effective until next year’s taxes (July 1.) It may be a simplistic perspective – it didn’t seem to bother most people – but I simply cannot support retroactive taxation. I voted against both tax bills.

All of these measures now go to the Senate, where we can expect changes before final bills go to the governor.

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A few key environmental initiatives were also addressed recently.

It’s a pretty sad thought that we need to have a “lake in crisis” designation, but our water quality issues are getting that serious. So I supported a bill despite some trepidation over the extent of the delegated enforcement power it gives the Secretary of Natural Resources to act beyond existing regulations if a lake has been deemed to be at that stage of pollution.

I also supported a bill that will establish a “stewardship” program for household hazardous waste, to go into effect in 2021 if a working group does not identify better ways to improve access to safe disposal. A stewardship program puts the cost of disposal up front, as part of the purchase price, instead of charging at the time of disposal. We do it now for batteries, paint, and CFL bulbs. Last November, my siblings and I cleared out my Mom’s house for putting it on the market. We ended up with a batch of hazardous waste, but no access to disposal until this coming May. So it still sits there while the house is being shown to prospective buyers.  It’s easy to see why folks get tempted to hide these items in their regular landfill trash – polluting groundwaters as a result.

The other area I would support a stewardship program is for tires, which could significantly impact that blight on our landscape. The pending bill on tires did not make it out of committee in time for this year.

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I am loathe to delve into the emotional topic of the gun safety bill debate, simply because there were more complexities to the various proposed restrictions than what can be explained in a brief written update. I’m happy to discuss them in more detail with any individual. I have maintained a consistent position in support of any safety measure that was actually workable and that did not place burdens on law-abiding citizens disproportionate to actual safety benefits.

In brief summary that meant “yes” votes on removal of firearms from persons shown to be at extreme risk of violence (even though they have not committed a crime); temporary removal of firearms from a domestic violence scene; the weapons disposal process for law enforcement; and the ban on “bump stocks” that turn semi-automatic firearms into illegal automatic firing guns.

I voted “no” on requiring individuals to go through a gun shop for sales to friends (so-called “universal background checks”). Individuals already face a 10-year federal prison term for selling to a prohibited person, which is likely why such sales have never been the source of weapons for mass shooters. I also voted against making magazines holding more than 10 rounds illegal (these are standard for shooting competitions and have no date stamps that would enable it to be determined whether someone was in violation or not); and on age discrimination among legal adults for purchase of firearms.

All of these passed in the House. How very much I wish we were not delivering false promises to Vermonters that these measures will actually improve safety.

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The Vermont legislature has never, in the past, been appropriately compared to the ugly partisanship that occurs in Washington, D.C. How do I define “ugly partisanship”? It is when actions have nothing to do with honest or even passionate political disagreements over policy. It comes when a majority party deliberately uses its control over rules of procedure to block debate or squelch the voice of the minority.

That happened last week in Montpelier.

Our work on the House floor – the presentation of bills by committees so that we can understand what we are voting for, the debate when there are concerns, and the votes themselves – was declared as being merely a “show” by the Democratic minority assistant leader. The context was an unprecedented vote to authorize a policy committee to meet and work on bills at the same time that the floor is in session.

The significance is that members of a committee are forced to choose: participate in hearing witnesses, analyzing pros and cons of a bill, and taking part in the committee’s decision to recommend a bill to the full body versus participating in hearing the presentation of bills on the floor, listening to and participating in debate, and voting.

On an individual basis, members do sometimes make their personal choice to not be on the floor when addressing another priority matter. I have done it myself for brief periods when consensus bills are under review. At times near the end of the session, there are enough members rushing around getting final work done that there needs to be a quorum call on the House floor.

One major embarrassment to the body occurs every time there is a roll call vote on a major bill. A warning bell rings, and legislators who were absent during debate flock to the floor to cast their votes. It means that those members felt they had no need to hear what their colleagues had to say before voting. In another sad commentary on how we address our responsibilities, I have a reputation in the House as someone who “actually reads all the bills.” In other words, that’s a rarity. But all of those are individual decisions by members as they juggle how they meet their obligations. They are accountable to their constituents for how they balance these priorities.

The difference in what occurred last week is that the Judiciary Committee was authorized by a vote of the House to meet as a whole and take formal action on bills while the rest of the body is on the floor. The reason: the chair’s desire to continue moving as rapidly as possible on the gun bills it was considering. We were not without adequate time to address those bills through the normal process, but the effort was being made to rush them, without even the typical public hearing that occurs for controversial new proposals.

Those committee members were thereby forced to choose to miss votes in one setting or the other, or to cast votes in one setting or the other without the information for an educated decision. They were being involuntarily compelled to abdicate their responsibilities either to being present on the floor or present in their committees. There is a reason that House rules say that committee chairs are not permitted to call their committees to meet without the permission of the full body. It is to prevent that conflict. That is why a House vote was required on whether to grant permission to the Judiciary Committee to meet.

The outcome was directly along political party lines, which meant an 82-52 vote that placed minority members in that untenable position, in the interests of the majority to move those bills forward. It was raw political partisanship.

In explaining my “no” vote in a formal statement, I pointed out that our processes are intended to protect the voice of the minority. “That voice has been trampled on today, through an unconscionable and unprecedented vote by this body. The significance cannot be understated.”

The assistant majority leader then provided her explanation: “It has been said the committees do the work of the people; the floor is the show. Enough said.” It was a staggeringly arrogant acknowledgement that majority membership feels its presence on the House floor is unnecessary. Its members can control the outcome of every vote. There is no need to listen to other perspectives.

Although I am a member of the minority party, I would feel the exact same way if the roles were reversed. I believe the outcome was a sad day for Vermonters and their right to be represented in the people’s House.

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Please stay in touch as you hear about issues affecting you and to keep me informed about your views. You can reach me at adonahue@leg.state.vt.us. Thank you for the honor of representing you.