February 24, 2024 Legislative Update

 

Urgency versus deliberation. Inclusion versus inaction. Complexity versus fairness. Unintended consequences. Some of these real-life conflicts in the process of lawmaking are front-and-center before us in the issues we will debate in the weeks ahead.

A report updating the progress of implementation of last year’s Clean Heat Standard bill makes some of these tensions dramatically clear. That was the bill that requires a financially-forced transition away from fossil fuel heating sources. Some believed it would be unsustainably costly; others that it was essential to address climate change; and others also believed it was being imposed far too rapidly.

The Public Utility Commission, working on the first phase to develop the rules that will be brought to the legislature for approval in 2025, had a message in its “check-in” status report this year. The executive summary is worth directly quoting.

“…[M]ost participants have expressed serious misgivings that the quality of the rule and the success of its implementation will suffer as a result of the aggressive schedule required by Act 18…[It] sets such an untenable pace that it will be extremely challenging for the Commission,

the Equity Advisory Group, and the Technical Advisory Group to carry out their responsibilities

in a manner that allows time for deliberative process, thoughtful input from all stakeholders, and

sufficient public participation to design such a transformative, first-of-its-kind, highly complex,

and technical program. The Commission shares stakeholders’ serious concerns that any draft rule … will suffer from the haste demanded [which] … allots mere months to the creation of an unprecedented, complex program with the potential for unintended consequences that impact the lives of all Vermonters…” The full report can be found at: legislature.vermont.gov/assets/Legislative-Reports/Checkback-report-1-FINAL.pdf

There is no indication that the legislature will agree to any delay. Instead, we are now moving ahead on a new initiative to change our current Renewable Energy Standard to require 100 percent renewable sources by 2035. That, according to some testimony, will cost Vermonters $1 billion over the next 10 years.

It does respond to a criticism over both the Clean Heat Standard and our recent past targets to significantly increase electric vehicle use: the facts that shifts to electricity result in demands that our current electric grid can’t handle, and production of more electricity requires use of more fossil fuels and thus also increases greenhouse gasses. So this next bill would block that impact by shifting electric production to all renewable energy.

We are acting in response to urgent issues but creating significant risks of failure at multiple levels. Prominent in my mind has always been the size of our state relative to the impacts caused by others, and thus the fact that when we act alone – or are first off the block – we take on a disproportionate burden that causes danger to our economic competitiveness and thus sustainability as an affordable place to live.

Across Other Issues

The same goes for a plethora of issues in front of us. We are currently looking at new tax sources to pay for ongoing costs of how we want to sustain the costs of our state responsibilities.

The costs of education have skyrocketed this year, for reasons I’ve discussed previously. News media have referenced an average 20% increase in property taxes, but for Northfield it is 24% and for Berlin it is 26%. The legislature is contemplating reducing that harm by raising new funds from elsewhere. There’s also a lot of talk about reforming the whole funding structure and school spending, but that talk has happened many times before, with only new bandages resulting. The efforts at fairness over the years have led to incredible complexities.

There are other reasons for wanting tax increases.

We locked in new burdens to the state budget and on wage-earners last year with the mega-childcare support package and now are looking at needs for significantly greater expenditures to address homelessness, record drug overdoses, mental health, a juvenile justice system in crisis and health care underinsurance. We suspended school construction contributions by the state in 2014 and the infrastructure is crumbling; we hear regular complaints about conditions of roads. The list goes on. These pressures are, at least, taking two other new initiatives off the table for now: a paid leave program, and salary increases for legislators.

But who pays?

In answer to the momentum to “tax the rich” I would warn that we already have one of the most progressive tax rates in the country. The rich do pay more. At last count, 16 percent of our state’s revenues from income tax were paid by the .17 percent wealthiest Vermonters. A full 25 percent of income tax revenues were paid by the next wealthiest bracket, made up of only 2.7 percent of taxpayers. Ergo, 41 percent is paid by the fewer than three percent of Vermonters who represent the wealthiest wage earners.

If we become radically out-of-step with states around us, economic drivers will move out.

Policy versus Cost

The budget raises another question that legislators face based on different committee assignments. Policy committees are expected to make budget recommendations to help guide the decisions of the Appropriations Committee. The Appropriation Committee then must balance among the competing “asks” and also turn to the Ways and Means Committee, which controls tax policy. What will be included in the budget, and when that exceeds the balanced-budget total recommended by the governor, how will the added money be raised?

As a member of the policy committee which oversees all of human services, I’m told that I should be recommending what would be needed to serve the wellbeing of all Vermonters, regardless of total price. While we do identify by priority levels, we are not expected to look at the bottom-line increases in the budget. That’s because we don’t have the context of the other parts of the budget, nor the decisions about the total taxes that will be raised to be available to pay for it.

If I vote now for ideal policy – regardless of cost – wouldn’t it be duplicative to vote against the future budget, no matter what taxes it requires? Usually, I think not since I can argue the money should have come from other budget lines rather than increased taxes. This year, knowing that we are dealing with revenue downfalls, that doesn’t seem legitimate.

Nicotine

A similar issue has already been through my committee and will be up for a full floor vote this coming week: the clamping down on flavored vapes and menthol cigarettes. As a public health policy, I voted in support of the bill; our committee vote was 10-0-1.

Vape products are getting into the hands of schoolkids because adults are buying them for them. These are incredibly addictive, and we know that the majority of lifetime nicotine addiction occurs if it starts at a young age. Menthol, by blunting the harshness of tobacco, also increases the appeal. If adults are the suppliers, it seems that we need to take these specific products off the adult market in order to protect kids.

But we didn’t look much at the budget consequences. That wasn’t our jurisdiction. The Ways and Means Committee looked at it last week and it will likely end up costing some $14 million to implement in direct lost tax revenue. That committee supported it on a 7-5 vote, and pushed back the implementation date by a year, to January of 2026. That’s a sly move: it means we can ignore it for the upcoming budget year, since the lost revenue won’t begin until halfway through fiscal year 2026’s budget. Clearly, the long-range cost benefits are likely massive in future saved health care costs, but that’s more amorphous.

In the shorter term, that $14 million annually is equal to thousands of nights of emergency shelter stays; hundreds of new recovery beds for those fighting addictions; one major school renovation every year; or more than half the annual cost of the universal school meals program we passed last year.

Feed our schoolchildren, or protect them from nicotine addiction? These may not be good things to present as an example of choices. But one way or another, government needs to make choices.

There are some choices I make on bills every day that I see as decisions that clearly represent my values, and thereby, represent the choices you made in the aggregate by electing me as a person closest to meeting your own values.

They are not all as clear, and that is why your input is so important to me. Please reach out, especially during the coming town meeting break. I’ll be at town meetings in both Berlin and Northfield, so it’s a great time to catch me for direct conversation.

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Thank you for your support. You can always reach me at adonahue@leg.state.vt.us, and Rep. Ken Goslant at kgoslant@leg.state.vt.us. It is an honor to serve you.