Legislative
Update
Rep.
Anne Donahue
April
8, 2023
Our
current legislature functions without the checks and balances of robust
dialogue and compromise that a democracy creates through a two (or more) party
system.
A
majority of Vermonters have chosen one-party control through their votes, so
that’s as it should be from the perspective of policy priorities. But it does reduce
the ability of minority voices to be heard.
Despite
a Republican governor, there is no check there either, since the Democratic
majority is now large enough to be “veto-proof,” meaning holding a 2/3rd
majority that can always overturn a veto.
Fortunately,
we do still have one healthy arena for the exchange of perspectives that I
believe is critical to best outcomes. That is because the House and Senate,
despite both holding very liberal views, often have very different priorities
and approaches.
This
year, the Senate appears to be the best hope to reign in a few of the highest
cost aspirations of the House.
I’ve
referenced several times about my concern that we are headed towards financial
catastrophe if we combine a predicted slowing of the economy (revenue
downgrade) and loss of the influx of federal funds with a cumulative number of
very high-cost new initiatives.
Most
of them will have a smaller cost this year – enabling a balanced budget this
year – but will have a significant increase in cost in the next several years
ahead as they scale up, just as increases in revenues drop.
The
budget the House passed two weeks ago included major increases for existing
programs to maintain them in the face of inflation, something I support. Let’s
not undercut our current safety net in order to fund new programs.
But
the full proposed budget is off the rails. That is particularly so in the way
it “balances” revenue and costs.
It
included the first year of investment to develop a paid family and medical
leave program that is untested in its scope and cost, and a multi-million
increase in support for the early childcare and education system.
To
pay for just first-year costs, the House budget added a 20% increase in motor
vehicle fees, removed several proposed tax relief proposals, and of greatest
concern, decided not to hold aside funds for the required matches for huge
federal infrastructure opportunities that will still be coming in for the next
two years.
If
we don’t have that cash on hand because we spend it this year, we won’t be able
to take advantage of those infrastructure funds; that money will be lost to us.
We
also already voted for a new payroll tax for the future family and medical
leave program.
Still
on the horizon are the consumer costs that will result if we begin to implement
the proposed heat program to convert our energy sources away from fossil fuels.
Will
the Senate partially rescue us?
The
Senate has passed the “affordable heat” bill with a requirement for a report on
the major elements of the plan before implementation is locked in.
It
also passed a combination childcare and family leave bill, with major new
investments but a lower cost than overall House versions because it does not
include medical leave.
Neither
of these are likely to sit well with the House.
It
is also now the Senate’s turn to work on and present its version of the budget.
It
is only in the Senate that I have heard comments that, “We can’t do everything
we want in just one year.” Thank goodness for that recognition.
By late April, the divergent views of
House and Senate will begin to be hammered out into compromises, and only then
will we begin to see what the real outcomes of this session will be. Though
these will be unlikely to show any significant restraint, it hopefully won’t be
as extreme as the level of cost burdens the House is putting forth.
***
Child Care
My committee is now deeply immersed in the
Senate’s childcare bill. The crisis in this system is multi-tiered, which means
that creating both accessible and affordable access – the goal – carries big
costs in multiple areas.
A study authorized last year tells us that
to meet criteria for a high-quality system of care for children 0-to-4-years-old,
the price tag would be about $24,000 per child per year, just about the same as
the average per pupil cost in our schools. That contrasts with a current cost
of $17,000 a year.
Last year, we set a goal that no family
should have to spend more than 10% of its income on childcare. To attempt to meet
that with inclusion of the major spending increase, state subsidies for the
cost would need to extend to families of 600% of poverty, or more.
Roughly speaking, the official definition
of poverty is below $25,000 for a family of three and $30,000 for a family of
four. At 600%, that means below about $149,000 and $180,000, respectively.
Even at that level of subsidy, the
increase in per child cost would mean that families just about that threshold
would be paying significantly more than they do now -- about 16% of income --
and if they have two children, as much as a quarter of their income.
The state would pay a $38.5% rate hike on
the payments to childcare programs that are the basis of the subsidy system.
The reason for the increase in tuition rates
is to address early education pay increases. Low wages add to the challenge in
finding workforce, which in turn adds to the challenge of having enough
childcare programs in the state to meet demand.
Part of the plan is to set a tiered
professional compensation scale that would align with primary grade schoolteachers
with equivalent degrees.
I raised a question: since most childcare
programs are privately run, how does the state get to set wage scales (or
tuition) for them?
The answer: the same way we do a lot of
carrot-or-stick interventions, which is with money.
We can tell programs that they will get
increased subsidies per child, based on a higher tuition level, but only if the
money is being used to meet state-set wage scales. It will be those higher
scales that will force a tuition increase for unsubsidized children as well.
One question being batted around is
whether pre-K for 4-year-olds should simply be folded into the school system.
Currently we have universal pre-K
education funding for these kids, but it’s only for 10 hours per week, and it
assumes a parent can find an opening, particularly if the school doesn’t run any
program or is capped in the number of slots.
There are downsides. From the testimony we
are hearing, many of the experts believe our current “mixed delivery system” –
the choice of school-run or private programs for state-support eligibility – is
best for families.
They also believe it enhances child
development to blend 3- and 4-year-olds.
The other system gap is the afterschool
issue, both for the pre-K and older grade school kids. School hours don’t align
with working hours.
We are sliding into a more fundamental
question.
What is the state’s role – or more
correctly stated, the societal and taxpayer role – in paying for care and
education before the start of the traditional school age? Does the village pay
to raise the child beginning at birth? Does the role extend to cover all parent
working hours?
Conceptually, that is the direction the
new bill is heading, if it lowers the age for full reimbursement and expands
the role of taxpayers in paying subsidies at all ages.
The Senate bill which tied early childhood
education into a family leave bill raises a lot of the total cost for both
programs through a payroll tax on everyone. The startup phase next year would
be $88 million; in the years after, it would be $163 million per year.
The payroll tax (.42 %) would raise $88
million of the cost, elimination of the new (last year) child tax credit of
$1,000 per year would raise $32 million, and the rest would be a general fund
cost.
I’m not sure that payroll taxes or tuition
increases are what people have in mind when they urge legislators to do more to
support the funding of early education.
This goes way beyond adding help with
costs. It is restructuring the concept of responsibility for the cost of
raising children – shifting it from resting fully on parents to becoming a
shared community responsibility.
I’m not automatically saying that’s a bad
thing, but it is certainly worthy of recognition and serious reflection.
Just as we all benefit from an educated
society and thus share in the cost of public schools, investing in healthy
growth of children from the beginning brings a community benefit.
These are the most formative years of all
for young brain development, so it matters to do the job well. We want our next
generation of kids to flourish.
Let’s also not forget that we keep
bemoaning the loss of new young workers because they will be needed to sustain the
economy and fund Social Security for our aging population… aging population
means that fewer children are arriving to balance off those of us growing old.
We all have a stake in this for many
reasons.
But it also has to balance with
affordability for Vermont. We aren’t an island, and the further ahead we get of
other states on these kind of costly initiatives, the more we lose both
business and taxpayers to the tax burdens.
Ergo, my plea: we can’t do all this all at
once. We don’t have to be – can’t afford to be – first in everything.
***
Other Bills
We passed the property tax rate for next
year, the basic math between budgets passed by schools versus revenue from the
grand lists. On average budgets increased 8%, grand lists (property valuation)
increased 9.7%, and individual property tax rates will increase 3.84%.
The number doesn’t mean much on an
individual basis, since every town varies.
We also passed a bill that proposes to
shift away from locally elected listers to a more professional, statewide
system.
There was some opposition to taking away
local control, but the reality is that this is about an effort at greater
equity among all our towns, since the property valuations that make up the
grand list in each town impacts the entire state. Thus, I supported the bill.
I also – with misgivings – supported the
expanded “bottle bill.” It isn’t just an expansion of the deposit system to
more recyclables, which I wholly support. It reconfigures the entire system and
could be more disruptive than anticipated.
There will be a window, however, between
rulemaking and implementation that will allow us to back up if some of the
premises turn out to be wrong.
My committee received a bill from the
Senate on banning all flavored tobacco and vaping products to reduce the appeal
to kids, and we are hearing a lot of lobbying from both perspectives already.
Given the amount of work needed on the childcare
bill, our chair has said we won’t take this up until next year.
The Senate has sent us a bill that would
more than double legislator salaries over the next several years and add health
benefits (at a cost of $853,000) for next year. It also includes a first-ever
salary for one day per week during the off-session.
It is another example of costs being
approved this year that will hit the budget at much higher levels in future
years.
The last time there was a major hike in
legislator salaries was about 16 years ago. It came after an independent study
and recommendations, was pegged at median Vermont salaries, and included an
ongoing cost of living increase tied to state employee increases.
This new bill is not generated by outside
recommendations, but by some legislators who feel underpaid and who believe it
will make it more possible for lower income folks to run for office. If equity
is the issue, there may be an argument for it, but doubling the salary means legislators
being paid far above median income for what is supposed to be public service. I
can’t support that.
Since we, as the lawmakers, have yet to
achieve access to affordable health benefits for all Vermonters, it’s a hard
sell for me to say legislators should get that coverage.
***
Please stay in touch with me and Rep. Ken
Goslant. We welcome your views and the opportunity to represent you. We can be
reached at adonahue@leg.state.vt.us or kgoslant@leg.state.vt.us. My archive of
legislative updates is available at representativeannedonahue.blogspot.com
No comments:
Post a Comment