Brain teasers:
How many bills can you read and pass in 14 hours?
How much in new taxes can you enact in a day?
How many times can you repeat studies of the education funding system without acting on them?
The end of a two-year session always comes in as a firestorm of decision-making. Some of that is human nature. I always crammed for tests at the last moment in school. Some of it is when one is dependent on someone else: If the Senate doesn’t send us a bill until there are only a few hours left, the choice in the House is to either rush it to a vote to concur or to abandon an important initiative. And some of it is simply session exhaustion. Better to stay until 2 a.m. and cram everything through than to extend the session several more days to complete work more thoughtfully. It seems to be something embedded into our process.
Thus, answer number one: Between 10 a.m. and 2 a.m. Friday-Saturday, we passed some 26 bills – everything from finishing minor amendments to the biggest items of the session: the budget, the education funding bill, the broad revision to Act 250 (our land use law.) But “read” before passing? In many cases, committees had a brief window of time for review, and members had no advance time at all for reading.
Answer number two: We added four new taxes or fees, none of them broad-based or staggering, but cumulatively, $62 million in new revenue, in addition to taxes from last year that are starting to hit: the 20% increase in motor vehicle fees and the payroll tax for funding childcare subsidies.
Answer number three: By some counts, we’ve done 38 studies of the education funding system since 2000, with lots of promises but no resulting significant action, despite broad recognition of the need for structural reform.
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Education Funding
This year’s property tax increase crisis led to major momentum to… do a bigger study.
The yield bill – setting the rates to determine how we balance the education spending budget – had a primary focus this year of scraping up other money so that property tax increases could be less drastic. The effect will be to defer the impact of spending decisions by a year. Next year, those deferred costs will be added to the increases that will, in part, be the result of having “kicked the can down the road” on change. There were no new cost-containment proposals in the bill, even for the short term while waiting for a new study committee report due in 18 months.
In January, estimates were that projected school budgets would result in an average of an 18% increase in property taxes, not including the local effects of changes in relative property values (the common level of appraisal, or CLA.) In town meeting day numbers, it had the combined effect of a 24% increase in Northfield and a 26% in Berlin. Both of their district budgets were defeated. The new base increase estimate is now about 13.8% instead of 18%.
That has come about through several factors. Multiple budget revotes lowered statewide spending a bit, and it is statewide spending that establishes how much money needs to be raised. The new yield bill reduces that further by adding other sources of taxes to offset (or “buy down”) the effects of new spending. These included a one-time $25 million transfer from the General Fund, a new 3% surcharge tax on short-term rentals (projected to raise around $12 million), and the repeal of a tax exemption on software accessed over the internet, expected to raise about $15 million. Those funds also contributed to the ability to create a one-time offset for the two-thirds of Vermonters who pay property tax based on income. There is a bonus 13% subsidy for the property tax credit to ease the degree of increase that would have occurred because of the timing lag of income versus tax years.
Currently, because of the statewide mechanism, districts that spend a lot get supported by those that keep costs down. There is little incentive to run a tight budget, but those who do are hurt the most when costs go up statewide. Cuts they make to the local budget gives minimal reduction to the local tax rate. That’s a lousy system.
Deferring some of this year’s huge increase for a year might have been OK if we also began some actual reforms to the funding structure, but that has also been deferred. The mega-study on creating an entire new vision for education to go along with new ways to finance it won’t be ready for action for at least another two years. There was a lot of flowery language before the vote, rejoicing over the bright future that will come when everyone contributes to the “Blue Ribbon Commission.” It was all things that have been said many times before.
The 93-44 vote in the House (13 absent, and some Democrats joining Republican opposition) means it could be close as to whether the bill will survive an expected veto from the governor. A 2/3rds vote (100) is required for an override. We will return on June 17 for veto override votes.
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Budget
The governor introduced his budget proposal at the start of the year to hold to an increase of roughly 3% from last year, with no new taxes or fees. The final version had comparatively tame additions, aided by increased revenue over original projections. It ratcheted up financial regulatory fees by about 20 percent to gain an added $19.4 million. That will be pretty well hidden from everyday pocketbooks, with difficult to predict filter-down costs into the economy. The final general fund increase was a half percent higher and the overall state budget was about a quarter percent higher than the governor’s, at $8.57 billion in full.
I was upset over the fake budget the House past two months ago. Major spending initiatives and the taxes to pay for them were placed in separate bills, so that they did not appear in the budget bill, even though they would all end up being paid out of the budget. The Senate eliminated almost all of that.
I was also very pleased to see that we began to address the Medicare cliff in this year’s budget, which has been a high priority for me. By next year some 15,000 lower-income seniors will be added to those helped with their Medicare premiums or co-pays. Before this, they lost health care financial support when they turned 65, sometimes in significant amounts, because the criteria for assistance dropped so steeply in Medicare. States can expand support options and many have done so, but we have been helping only those with incomes below the poverty level, which is $15,000 a year for an individual. The change will increase eligibility to 145% of the poverty level (about $21,000.)
The Salsbury fish hatchery, defunded in the governor’s budget, had broad constituent push back and the final budget added it back.
The hotel emergency housing program was cut back, and the compromise on which ways to hold the line was messy. Compromise can force that. I think some general eligibility is still too broad, but eliminating the assurance of shelter for all in true, extreme weather goes too far. Hopefully we will truly expand enough shelter capacity (non-hotel) to make up the difference.
Our community social services providers, who don’t get the benefit of state employee contracted raises, will received a 3% increase; the governor had left it at zero.
One hidden add-on remained. I was told that it wasn’t hiding anything; I should just think of it as a “box outside of the box” – new taxes and spending that didn’t show up in the budget bill. That came in a bill that suddenly combined two separate ones that were worked on all session in both houses: the Act 250 reforms and new money for housing expansion and supports. An added $15.7 million was raised through a new second-home property transfer tax to put funds into an array of housing supports.
Through being combined, a yes or no vote included a decision on the re-envisioning of our land use laws, commonly referred to as Act 250. It determines what people can do with their own property so that we can control growth and restrict it to the places we believe as a state that growth should occur. That bill will divide all Vermont land into three “tiers,” to be determined by regional maps developed by the Natural Resources Board and applied by a new Land Use Review Board, rather than applying Act 250 review based on specific sizes and attributes of property.
Tier 1 allows development with a waiver of Act 250 review and is confined to more urban areas that have sewer and water infrastructure and designated town centers and a strong local staffing ability for a town to review its own projects. Tier 3 are critical natural resource areas that will come under high protections against any development. The official definition of Tier 2 is “an area that is not Tier 1 or a Tier 3 area.” All of Tier 2 will come under ongoing Act 250 review.
It will take several years to roll out, and in the interim, some flexibility will be in place to encourage housing development as long as acreage requirements are met.
Earlier in the session, I asked what money was being put aside to reimburse property owners for taking of land by “eminent domain,” and I was told no one’s land was being taken. But “taking” in the legal sense means significantly reducing value for a public need. If your land drastically loses value because it gets mapped in as “Tier 3” and can’t be developed at all, done in order to benefit all of us to protect our natural environment, usually there is some level of reimbursement owed. We will now need to wait and see whether and how this bill plays out. I did not support it.
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Scattered Bill Notes
Almost under the radar among the last-few-hour bills was one that adds aggressive criteria that must be met before a government function can be contracted out. We have strong law on this already so that we don’t cut state jobs just to cut corners. Does this new bill go overboard without enough information? Here’s what our nonpartisan fiscal analysists said about potential cost: “The size of direct fiscal impacts on the General Fund and other State funds is uncertain but could potentially be substantial.”
A huge bill to protect Vermonters regarding access to personal data, with an added focus on child protection, was nearly lost in House-Senate negotiations, but survived the final days after going back and forth several times on the last day. The House wanted it stronger; the Senate was more cautious. (The vote on a bill that goes through that kind of ping-pong can end up titled this way: Shall the House concur in the Senate proposal of amendment to House proposal of amendment to Senate proposal of amendment thereto!)
Another new law will allow organizers to use a process that eliminates a secret ballot for a worker decision to unionize. It was called a labor protection act; I see it as an anti-worker rights act. It was one of the pieces added to another bill, thus opposing it meant being recorded as voting against the good parts of the original bill (which included restrictions on employers proselytizing and looking into better protection for farmworkers.) Protections against arm-twisting need to go both ways, and I voted no.
A crucial bill I worked on in the Human Services Committee to ensure we had the right secure treatment settings for a small number of individuals with disabilities charged with violent crime but not competent to stand trial led to a standoff with the Senate committee over a single word. Everyone wanted the bill, but it almost died over semantics on using the word “forensic” or not in the description. Who would blink first? (Can you spell the word, “stubborn”?) At last, compromise occurred.
A bill I introduced and pressed for over two years failed on the last day. It would have protected farmers in accessing the parts and tools they need to repair their own equipment, instead of being locked into a manufacturer monopoly. The Senate gutted the “Right To Repair” bill when it passed it in the final days, and there was no time left to negotiate restoring any of the protections that were in the original bill.
On the plus side, the Senate bill that made controversial changes to the Fish and Wildlife Board was abandoned on the House committee side.
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Insider Baseball
Every year in the final days, I fight for the ability – the right on behalf of those I represent – to actually read a bill or amendment before I vote on it. Almost unthinkable that one would have to fight for that. One time last week when I raised an objection on the floor, another member, in a comment clearly directed at me, said he believed in respecting the work of the committee instead of feeling a need to review the work directly. Of course I respect their work, but I don’t believe I’m doing my job if I don’t even know what it is that a committee is recommending. Nor do I think a race to the finish on our final day benefits our work.
Here’s one episode that gives a rare exposure of how politics can play out in processes:
The House had a bill with assorted revisions to our current laws on the cannabis market. It didn’t come back from the Senate with their proposed changes until early Friday afternoon. One change struck out an existing piece of our restrictions on advertising. That bans the offering of “a prize, award, or inducement for purchasing cannabis” – in other words, the bill was making it legal to use prizes or awards to increase sales. I proposed sending the bill back to the Senate with “further proposal of amendment” to accept everything else, but to remove the deletion of that ban.
Members of the House committee itself expressed some clear support – they didn’t think the deletion was good policy, either. But their leadership urged them to oppose my amendment because there might not be enough time left for the Senate to vote on a cross-proposal. The bill potentially could die. I argued that we should be voting based on what we thought was right, and not let the Senate control an issue by slipping a change in knowing time was running out.
Despite the leadership argument, there was a very rare rebellion in the ranks of the supermajority. People clearly did not think this should be deleted from the bill, and the standard voice vote sounded close. Before the result was called by the Speaker, a member called for a division, meaning people must stand up to vote yes or no, enabling an exact count. It’s hard to see from one’s seat, but it looked as though it was going to be close. After the count, the Speaker started consulting with the House clerk. It seemed something was awry.
Suddenly, a member from the majority party called for a roll call vote (these voting format changes can be requested any time before the vote result is announced.) That meant folks were going to have to put their names to the vote if they broke ranks with their leadership. It later turned out that the consult by the Speaker was on the question of whether under the rules she could use her tie-breaking vote authority, and the answer was no. That only comes into play if there is a tie in a roll call. Thus, the roll call was requested to get the dissenters in line and avoid the embarrassment of a loss on the vote. The tactic worked to get enough votes to shift, and my amendment failed, 85-59. That count meant a lot of Democrats still stuck to their guns to support me, but not enough of them.
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Obviously, a lot has happened in the final days. The journal with the list of Friday’s bills isn’t out yet as I write this; staff is still assembling it, and with so many bills “taken up prior to entry in the notice calendar” there is no listing available elsewhere. Please reach out to Representative Ken Goslant or me if you have questions about any bill outcomes, at kgoslant@leg.state.vt.us or adonahue@leg.state.vt.us As always, thank you for the honor of representing you.
