Saturday, February 24, 2018

February 24, 2018 Legislative Update

I don’t think anyone can walk away from the events of the past week without recognizing the deeply felt need to respond constructively to the levels of violence in our country – and not just related to schools. 
We need to be coming together as a community to truly consider the many complex issues that contribute, not to just react in narrow ways that are specific to the most recent horrors.
What do I mean by reacting in a narrow way?
The proposal to limit gun sales to those 21 years or older is getting center stage right now because the Florida shooting was by a 19-year-old.
Does it make sense as a broader public policy? It certainly might. But it needs to be considered on its own merits, not based on reaction to a single specific circumstance.
I am committed to listening to the proposals that come before us in the Vermont legislature, and supporting those that offer real solutions.
However, we need to recognize that some proposals only create a false sense of security. I think that many people are very anxious for that perceived security, and mistakenly see every possible restriction as an answer.
We do need to have open conversations that put everything on the table, including looking at whether and where changes in our guns laws can make a difference. One of our obstacles has been the lines drawn in the sand that do not allow for this kind of difficult conversations.
I am equally concerned about pointing to mental health issues, which are frequently an equally misleading path.
I think we immediately try to pathologize unthinkable acts as evidence of mental illness because we can't bear to think such acts could be knowing and deliberate.
The vast majority of people with mental health challenges are not violent, and I fear the "perceived security" issue could lead to denying rights of those folks inappropriately, as well.
Research has shown that the rate of violence is not greater among those with a mental illness compared to those without. The greatest predictor of dangerousness is a history of violence, not a history of mental illness.
I am not a gun owner or a hunter, but I am a person with a history of serious mental illness, so my concern over this response is based on my direct experience.
It sounds so incredibly reasonable to say that we “must keep guns out the hands of the mentally ill.” Who could question that? It is a rallying cry on all sides of the gun issue.
But it begs the question, how do we define, “the mentally ill”? Note that immediately, when we use the term “the mentally ill” we depersonalize such individuals and make them “the other.”
One out of five Americans will experience mental illness at some time in their life. Should we ban gun possession by any and all of them? How do we define “being mentally ill”?
Do we assume no one recovers from a mental illness? (If so, how do they become state legislators?)
Some might suggest that in order to create the widest possible net of safety, anyone being seen for mental health treatment should be included. Mandatory reporting to the federal database by counselors of clients receiving treatment?
Imagine what that would do to the greatest existing obstacle to encouraging people to seek treatment: the stigma and discrimination that exists.
If there is any degree of enhanced risk, it is among those who do not seek treatment – treatment is the last thing we should want to discourage.
Keep in mind that existing law requires that persons who have refused treatment after being determined to have a mental illness that requires hospitalization already must be reported to the federal database.
Vermont does that – as it does for felons and domestic abusers.
To whom would we further extend that net?
Our issues of violence in our society are far more complex than mental illness or gun laws.
I give credit to the governor for the breadth of his statement when he expressed a new willingness to consider gun issues, because that statement went far beyond guns – and beyond mental illness -- to raise such issues as the impact of toxic childhood trauma. 
I wholeheartedly agree that doing nothing because it is a complex problem is not an acceptable response. We address many complex issues by chipping off what we can, when and where we can.
I am only urging that we not jump to what appear to be quick and easy responses solely because they appear to be quick and easy. They rarely are. Our issues stem from far deeper roots.
***
It was ironic that in the midst of these traumatic events and national discussion, the longest debate in the House last week was a bill to ban coyote hunting competitions that were described by one legislator as the “slaughter of sentient beings.”
I don’t pretend to be an expert on the biological and scientific issues regarding control of predator species and what coyotes do or do not do to weaker species, or whether hunting competitions increase necessary participation in predator control versus being conducted “merely for fun” at the expense of wildlife.
I do think that these are issues that belong in the realm of such experts, and not in the hands of lay legislators who might be basing decisions on emotion or public sentiment rather than science.
Some of those who contacted me said the legislature needed to act because the Fish and Wildlife Board was refusing to act. I made inquiry during the debate on the House floor and learned that was not true.
Rather, it was the Board’s belief that current law did not give it the authority to address questions about hunting contests, even though it has authority for all other rules about hunting.
As a result, I introduced an amendment that would have replaced the proposed legislative ban on coyote hunting competitions with legislation that clarified the Board’s authority to review all such contests (not just coyotes.)
That amendment failed and the bill passed. I guess if the next public outcry is about deer hunting competitions or rabbit hunting contests, we will have to take that on legislatively as well. The coyote issue is now in the hands of the Senate.
***
Fees are not technically taxes, because they are levied for specific state services that we deem should be paid for directly by the users of the service.
When they apply to a service that virtually everyone uses, however, that distinction gets fuzzy. The whopping cost to register a car is but one example.
Many fees tend to nickel-and-dime us in very small ways, but they can rapidly add up. As someone who is very concerned about our tax burdens, it was a tough vote last week on increasing the Universal Services Fund that appears on our phone bills.
The current fee is two percent of the core services bill. I checked my phone bill: last month the fee was 48 cents. The proposed increase would add one half of one percent for four years… 12 cents per month on my bill.
The increase is for the Connectivity Fund for getting broadband services throughout the state – a goal that has continued to elude us.
Like when we all pitched in to get electric wires strung in rural areas that were not cost effective for the service providers, we need to do this. I voted to increase the fee.
But it does give rise to worries about much more difficult debates that will occur later this session.
We also absolutely need to address our polluted streams and lakes.
Where will that money come from?
Proposals have included items such as a per parcel fee on land, or increases in the property transfer tax. Would it be more honest to impose it as a direct tax increase borne by everyone?
I did vote in support of a bill last week that will require a permit from the Agency of Natural Resources for development of land parcels beginning at a half acre, down from the current one acre, as of 2022. It was passed on a vote of 125-12.
That means an eventual wider imposition of fees, plus costs of development (ergo, of new homes, for business expansion, and even for local towns, when they pave roads.)
In other words, it is another hidden tax. At least this one is targeted directly at the cost of ensuring that new development does not further add to pollution from runoff.
***
Further money questions over the next several weeks will include whether we should completely reshape how we fund schools by increasing what we pay from income and decreasing what we pay in property taxes, as well as addressing the annual state budget.
Typical of most budgets, the Governor has proposed some new initiatives along with cuts that both offset the new items and keep the budget from rising faster than taxpayer incomes.
Thus far, the target in the House Appropriations Committee has been to maintain the target for preventing any tax increase. It takes advice from the policy committees regarding both cuts and new initiatives.
The very positive proposals in the human services arena for dental intervention for school kids and for home visits for new mothers got the thumbs down in that committee in favor of keeping critical funds for people who have severe needs for attendant care services at home, and for support for individuals with developmental disabilities, along with rejecting other cuts.
In my Health Care Committee, our advice was to support the governor’s proposed small increase for crisis service programs to help abate the ongoing crisis in lack of access to mental health care that has created persistent backlogs – sometimes weeks of waiting – in emergency rooms.
But we recommended rejecting proposed cuts to our critical primary care system which would reduce Medicaid reimbursements, and the proposal to eliminate the small fund for recruitment of more primary care providers to the state.
We also opposed the cut of state support for insurance co-pays for lower income persons who are above the level of eligibility for Medicaid but do not have employer-sponsored health insurance.
***
Among the initiatives that have run out of time for consideration: the bill I introduced to reform the property tax inequity for towns with state colleges versus those with private colleges.
The chair of the House Ways and Means Committee has told me that this effort, spearheaded through the work of Chris Bradley, will not be addressed this session, as the committee has its hands full with the education tax bill.
The bill has at least raised attention to the issue. Only a fraction of bills introduced each 2-year session make it through both the House and Senate process to reach the Governor.
***
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.





Saturday, February 10, 2018

February 10, 2018 Legislative Update

Legislative Update
Rep. Anne Donahue
February 10, 2018

As we near the midsession deadline, issues are heating up around the state house with consideration of two major tax initiatives: reshaping how we pay for education, and revising state income tax rules to prevent the federal changes from becoming a big state income tax increase.
The Senate has also voted on a 6-year staged increase to a $15-per-hour minimum wage, so we will need to be addressing that proposal in the House.
In meantime, we had a major split on a policy bill on the floor, when I led objections to part of a new bill on parentage that would allow a court to order that a DNA sample be taken from a person who is not involved in the court case.
The parentage bill is a worthy and important effort to rewrite old laws to address the realities of the current world, including surrogate births (termed “gestational carriers”), but it also includes a fairly radical provision on genetic testing. In lay language: if your brother is the subject of a lawsuit asserting that he is the biological father of a child, but he has taken off, the court could order that you must provide a DNA sample. (Your DNA could theoretically provide evidence of whether the child had enough common DNA traits to establish that your brother was, or was not, the father.)
If that clause was going to be included in the bill at all, I wanted the actual genetic specimen to be destroyed after the parentage case was concluded. The committee that had passed the bill disagreed, saying there hadn’t been enough testimony to know what the current protocols were for preserving or destroying genetic testing specimens, so there could be unintended consequences. But the committee was willing to go forward with whatever unintended consequences might result from allowing your DNA sample to be taken and to exist – against your will – in some unknown location under unknown protocols!
It is virtually unheard of for an amendment to succeed on the House floor if the committee rejects it. This one came close to a major upset, but failed on a 70 to 73 roll call vote. My efforts did result in some improvements in the bill to require a more protective court process, but the DNA samples themselves will not be destroyed. The bill now goes to the Senate for consideration, and I am hoping this issue will be reconsidered.
***
Taxes for Education
One thing everyone agrees on: our current property tax system that contributes to paying for schools is far too complex. One only has to look at what often happens in Northfield: the school board holds to a tight budget with small increases, yet the tax rates go up much higher as a result of spending levels in other towns.
And no one has figured out yet how to slow down the increasing per-pupil costs, as we lose student counts yet keep facing budget pressures. The idea of school district consolidations was probably essential for reasons of educational opportunities for students from small districts, but the cost containment results will be fairly small.
The core of the proposal emerging in the House Ways and Means Committee (the committee in charge of taxes) would be a shift to an income tax surcharge for the statewide share of the education fund. The homestead property tax would drop way down, and would reflect the local district’s spending, without any income sensitivity adjustment (the adjustment for income would be covered by the fact that the income tax surcharge would be scaled based on income.)
It would definitely simplify the system. Despite the intent to keep everyone in about the same tax situation that they are in currently, no system change can do that perfectly, so there would be “winners and losers” – individuals who would do better, or worse, than the current structure. The details are not fleshed out enough yet to know who they would be.
But the big question is what the impact would be on spending levels. What it all costs is a bigger issue than how the taxes are collected. Vermont ranks as the top state in New England in state spending as a share of its gross state product (11.7 percent, compared to next-highest Rhode Island at 10.5 percent), primarily driven by K-12 education spending; education spending as a percentage of the budget ranges from 11.2 percent in Massachusetts to 32 percent in Vermont.
There is a fairly prevalent concept that if taxpayers are “insulated” from spending decisions, they are less likely to hold local spending down. If there is little impact on your property tax bill – because it goes into a statewide pool of money – why vote for a lower, local school budget? That operates if you support the assumption that there are many districts where costs could be restrained, but that local school board (supported by the local voters) are choosing to spend excessively.
If the new system meant that local voters kept tighter control, because their vote directly affected their local property tax – which would be set based upon how much was being spent above the statewide level being covered by the statewide income tax -- it might be a big plus.
If it meant that poorer towns tightened their belts more, but wealthier towns felt comfortable with adding extras, there would be a problem with the equal educational opportunities we are expected to be providing. If it meant that everyone was so relieved that their property taxes dropped so much that they felt it was great to be able to add lots more to their local budget … we’d obviously significantly worsen the overall spending problem in the cost of education.
Some of the complexities of the many variables, including the complexities of why costs keep increasing, are the reason the system hasn’t been changed for so long. While there is momentum this year for a change, it won’t be clear for a while yet whether this initiative will move forward and what the final picture will look like.
***
State Income Tax
More tax complexities: the big changes in federal income taxes, and what your return will look like next year, will change the impact of some of the automatic features of how our state income tax piggybacks on the federal. For many people, it means that some of their reduced federal taxes will get partially eaten up by increased state taxes.
The best guess right now is that it could result in $30 million more in state revenues. We could expand our state budget, maybe even filling in for some cuts in federal spending, without having to vote on a tax increase. What a great idea!
Oops. No, not such a great idea. No taxation without representation, right? An increase in state spending by $30 million means a $30 million tax increase, even if it is thanks to a change in federal tax law, not ours. If we feel we need or want to increase taxes, that should happen up front, in a transparent debate. So the governor has put forward a proposal for changing state tax codes to – as best as possible – keep everything the same for Vermonters in terms of current state taxes.
But it will be a very tricky process, because the federal tax changes will impact individuals in very different ways. As with changing the property tax structure, no one wants to suddenly cause some individuals to pay a lot more and others, a lot less. Getting an even outcome will be a challenge.
***
$15 Minimum Wage
Speaking of trying to balance impacts: the Senate is moving forward with a proposal to increase the state minimum wage from $10.50 to $15 over the next six years.
There are many aspects that make a strong case for this. I do believe that a full week’s labor should pay enough for a person to live reasonably above the poverty level. At $10.50 an hour, a person is making $21,840 a year, which is just slightly above what the federal government deems as poverty for a 3-person family. Any of us can compare to our own income to consider whether we think this is a “livable” wage – I do not think it is.
Vermont has some good reference tables that include all the additional supports that low income persons receive, and where that places them in comparison to what Vermont deems a “basic needs” budget. That scale estimates that it takes about $70,000 in resources for a single parent, 2-child family. Again – that become a subjective conclusion about defining basic needs.
Economic arguments for increasing the minimum wage include a savings in what the state spends in various subsidies for those with low incomes and increases in income tax revenues, as well as more buying power for families, resulting in strengthening the economy.
The basic needs budget graph shows the value of all subsidies – childcare, healthcare, food stamps, tax credits, etc – to show where that sample 3-member family falls. If there are no wages coming in, the benefits total about $43,000. As earned income increases, those total resources go up. At wages of around $22,00, combined with benefits, the family reaches $62,000 in net resources.
Then comes the cliff: if you earn more, the subsidies drop faster than your wages increase, so at the point of reaching $36,000 in wages, total resources have dropped to about $52,000. Getting ahead is penalized. (If the state were to attempt to level that cliff, it would cost $66 million.) It is not until earning a net salary after taxes of $48,000 that the family gets back to net resources of $62,000. After that, the progress towards the $70,000 is a bit more even (there are some smaller cliffs) until actually arriving there via after-tax income alone.
So here’s the irony for that sample family: if the minimum wage went from $10.50 to $15 an hour, the total family resources could go from $62,000 to around $56,000!
The Senate plan would increase the threshold for the child care subsidy to help offset that effect – at a cost between $4 and $12 million -- but that does reduce the arguments that say the increase would reduce state spending on subsidies, since that’s the largest direct state funding on family supports. And while keeping the child care subsidy in place at higher wage levels would prevent the drop-off, the increased minimum wage would still would not increase that family’s spending power.
Our legislature’s non-partisan fiscal consultant projects several thousand jobs being lost from the economy if the increase went through, from businesses that would have to cut back based on the increase in wages. Its report also estimated that increases in state tax revenues and reduced benefit costs would be “a net fiscal gain to the State of approximately $23 million” [not counting an expanded child care subsidy cost] under the proposal, “balanced against a $69 million net reduction in federal dollars in Vermont’s economy.”
So nothing is ever as simple as it sounds.
All this assorted data plus much more detailed analysis is available on the Joint Fiscal web site, www.leg.state.vt.us/jfo/
***
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.