The “corona-coaster” with its steep ups and downs took on new meaning this past week in the state’s budget. Less than a year ago, we were all terrified about the financial impact of lost revenues. Six months ago, the projections were dire. Now, it seems that we’re rolling in money, thanks to our out-sized benefits from federal relief funds, which have proved to have real economic stimulus value. It doesn’t mean we are not still in deep economic crisis, with families under major stress and businesses hanging on by the skin of their teeth. It does mean we have some resources to shore up supports.
In the governor’s budget
address, he stressed the need for the excess revenues – which will be very
short-term – to be invested in one-time projects that put us in better shape
for the future. It is wise advice, and it seems that the legislature is mostly on
board (though not necessarily agreeing on which one-time projects those should
be.)
If money is put into new
initiatives in the base budget, when we are back on a normal economic course
and the bonus money dries up, we will be facing the prospect of eliminating
programs. No matter how new an initiative is, that never goes over well. Cutting
back is politically challenging.
A one-time project doesn’t
add to the base and can help reduce future costs. A good example is increasing
investments in broadband, which is generally recognized as a key to long term
economic growth and attracting new residents in younger demographics. That
means the governor’s budget actually is level-funding many areas in state
government while at the same time, making $210 million in one-time funding for
economic recovery through investments in housing, infrastructure, broadband
buildout, environmental stewardship, carbon reducing initiatives, and
government modernization, among others.
There is too much to even
describe in outline form in this update, but if you want a more detailed
overview (with some helpful graphs included), you can see it by going to
finance.vermont.gov/budget/budget-recommendations/operating-budget/fy2022 and
choosing “Executive Budget Summary;” as a mere “summary” it is 41 pages long.
It is a definite concern in
my Health Care Committee that nothing was referenced regarding health care
funding or initiatives, not even in access to mental health supports, which we
recognize will face new pressures as a result of the stress created by
COVID-19. We will be reviewing our sections in detail for recommendations to
the Appropriations Committee.
The biggest budget pressure
point is the underfunding of our pension obligations. The state treasurer has
made some suggested alterations that the legislature will have to assess. The
pension funds are at a critical juncture. According to Treasurer Pearce, no
action is not an option. As an example, the unfunded liability of the teachers’
retirement plan has increased from $711 million to $1.9 billion in the past 10
years. This is with the legislature devoting ever increasing general fund
dollars out of the state budget to it each year, growing from $42 million in
2010 to $136 million in the current year. The state’s share is expected to go
up by another $60 million to $196 million next year. These types of increases
are not sustainable, with or without more tax increases. And failure to address
it could jeopardize the solvency of the pension funds. That is not an option at
all.
All of these decisions will
play out on the House side in the next several weeks. The budget will then go
to the Senate (they will, in our House opinion, gum all our work up!), then on
to conference work to align the two, and to the governor. The good news is that
the House Appropriations Committee is trying to expedite its review schedule,
which would be in keeping with an aim to keep this session shorter than average
and focused on the essentials. The session end is directly tied to completion
of the budget.
This year, like last, there
will be a separate bill that allocates the new round of federal relief funding.
It is more targeted this time, so we will have fewer decisions to make – unless
and until something happens down in Washington regarding further stimulus
money.
About a decade ago, the
legislature added language into statute regarding budget development and the purposes
of the state budget. This is what it says:
“The State budget, consistent
with Chapter I, Article 7 of Vermont's Constitution, should "be instituted
for the common benefit, protection, and security of the people, nation, or
community .. ." The State budget should be designed to address the needs
of the people of Vermont in a way that advances human dignity and equity and in
a manner that supports the population-level outcomes set forth in 3 V.S.A. §
2311.
“Spending and revenue policies
will seek to promote economic well-being among the people of Vermont, and
foster a vibrant economy. Integral to achieving the purpose of the State budget
is continuous evaluation of the use of public funds by systems of outcome
measurement based on indicators that measure success in accomplishing the
purposes of the State budget.
“Spending and revenue
policies will reflect the public policy goals established in State law and
recognize every person's need for health, housing, dignified work, education,
food, social security, and a healthy environment.
“As consistent with State law
and in conjunction with the federal government, the budget will reflect support
for economic development, public safety, transportation, and other
infrastructure needs.
“Revenue measures shall also
be based on the principles of sustainability and stability. The Administration
shall develop budget and revenue proposals as part of a transparent and
accountable process with direct and meaningful participation from Vermont residents.”
Lofty goals, but worth putting in writing to
try to keep at front and center of decision-making. How does accountability
play out? While you can contact me or Rep. Goslant to share your opinion, you also
do have a voice beyond our representational democracy. The opportunity to
directly state your values and priorities is coming up next Monday in
video-conference public hearings on the budget in front of the House and Senate
Appropriations Committees jointly.
The two public hearings are
on February 8, from 1 to 2:30 p.m. and from 6 to 7:30 p.m. via videoconference.
You can sign up to testify using this online form:
legislature.vermont.gov/links/public-hearing-fy22-budget, no later than this Friday,
February 5. Instructions on how to access and participate in the hearing will
be sent once you have signed up for the hearing. There will be time limit based
on the volume of participants, likely in the range of 2–3 minutes. The public
hearings will be available to watch live on YouTube at the following link: legislature.vermont.gov/committee/streaming/vermont-joint-fiscal,
or on Onion River Community Access (ORCA) if you have access to it. For more
information you can contact Theresa Utton-Jerman at tutton@leg.state.vt.us or
Chrissy Gilhuly at cgilhuly@leg.state.vt.us or call 828-2295. Written testimony
can be submitted electronically to Theresa or Chrissy through e-mail.
***
Other Notes
My Health Care Committee is
currently taking up a somewhat discrete topic related to tele-health, on the specific
subject of “audio-only telehealth” (translation: by phone.)
During the pandemic, insurers
are paying for telehealth visits, including audio-only, as though they were
in-person visits. This is under an emergency rule by state regulators for
insurance plans regulated by the state, and voluntarily by other plans. (The
majority of employment-based plans in Vermont are not permitted to be regulated
by the state.) This has been a critical support during a time when it may not
be a good idea to travel to the doctor’s office, recognizing that there are
still many Vermonters who don’t have adequate internet for standard telehealth.
Insurers and providers agree
that once the pandemic is over, audio-only visits will still have a place in
the range of appropriate, quality health care options. Where they don’t agree
is whether insurance should reimburse claims at the same rate.
Initially left out of this
discussion were patients themselves, and I pushed to hear from that perspective
as we finish testimony this week. The assumption has been that since this
increases access (less time away from work, avoid travel obstacles, etc),
health consumers will all support it.
But the question is one of
cost. If you have a high co-pay, or a high deductible plan, “paying the same”
isn’t a question of payment by your insurance. It’s out of your pocket. If you
are choosing an audio visit, do you think there is equal value – or at least,
equal trade-offs – such that it is reasonable that it cost the same as a
doctor’s visit? Will you feel comfortable with insisting on an in-person visit
if your provider is encouraging a phone visit?
I’d be interested in hearing
your views.
***
It is an honor to represent you. Please
contact me (adonahue@leg.state.vt.us) or Ken (kgoslant@leg.state.vt.us) anytime
to share your input, ask questions, or raise concerns.
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