Legislature adjourns, veto weighs heavily

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Legislature adjourns, veto weighs heavily

Fri, 05/19/2017 - 11:27am -- tim

Vermont Business Magazine The Vermont Legislature wrapped up business Thursday night and advanced the budget, tax bills, and economic development bill to the governor today. Adjournment was delayed nearly two weeks over the issue of whether to institute a statewide teacher health insurance plan. Governor Phil Scott introduced the idea in April and the Legislature scrambled and then failed to find an alternative or compromise. Lawmakers might not be done yet, however, as a gubernatorial veto could be forthcoming. 

According to the Burlington Free Press, the governor told legislators after midnight that a deal still could be struck, but he was not assuaged by a modest, one-time cut of 1.5 cents to the property tax rate that made no promises on a statewide teacher health plan going forward.

The governor pushed hard for the teacher health plan that he says will save taxpayers $26 million. The union is vehemently against the plan, which they say will undermine collective bargaining and local control of school budgets. If Scott were to veto the budget and the tax bill over this issue, the Legislature would have to come back into session, which would happen June 21, to override or sustain the veto, or find a compromise. For now, at least, the Legislature made its modest cut and has decided to study the issue and revisit it next year.

In a press released issued early Friday by the Office of the Speaker, several key lawmakers weighed in on the end of the session.

Chair of the General, Housing, and Military Affairs Committee Chair, Representative Helen Head said, “The budget makes important investments in affordable housing. This bill will make a tangible differences for Vermonters. This $100 million investment creates jobs, attracts a good workforce and allows Vermonters to invest in their future. Reducing homelessness reduces human services spending, improves the health and sustainability of families, and strengthens our communities. I am proud of our work on this and look forward to seeing its implementation.”

“The budget before the body this evening included no new taxes or fees. It makes critical investments in Vermonters and has had the support of the House, the Senate, and the Governor. This is a budget that has been widely embraced, and it should be supported on its merits,” said House Appropriations Chair, Representative Kitty Toll.

“We made sure the ‘once in a lifetime’ opportunity for savings in teacher health care will happen again in time to use the information we get from a thorough evaluation of moving to a statewide health care contract for school employees,” said House Ways and Means Chair, Representative Janet Ancel as she weighed in on the property tax bill. “In the meantime, we’ve reduced taxes for homeowners. We believe there will be savings in school spending as a result of health care changes and the education fund reserves will be replenished next year.“

“The economic development bill is an important investment in Vermont’s workers and economy” said House Commerce and Economic Development Chair, Representative Bill Botzow. “We want to keep Vermont’s economy and job market growing as we unite the needs of employers and employees throughout the state. Supporting apprenticeships and internships connected to career technical education will provide more young Vermonters  and adults with the skills they need to lead healthy, productive lives in Vermont.”

“Programs like the Green Mountain Secure Retirement Plan in the economic development bill are exactly what Vermont needs to ensure our small business economy is attractive to entrepreneurs and working families,” noted House Speaker Mitzi Johnson. “Additionally, improving access to affordable, safe housing is imperative. That is why I named affordable housing as a priority on the first day of the session. The strength, health, and sustainability of our communities depends on our residents having access to an affordable place to live. Our plan to build $100 million in affordable housing across the state addresses the shortage, creates jobs and builds communities. This legislation not only provides housing for families at low and moderate incomes, but also creates housing opportunities for single millennial workers-the very people we working to attract to our state. We hear from businesses all the time that they are unable to attract the talented, college-educated workers they need. This is one way to make our state a more attractive place to live, work, and thrive while adding desirable, affordable housing to the market. I’m proud of the work of House.”

Teacher Health Plan

In April, the Governor Scott suggested that the state could save some $26 million in school costs if teacher health insurance plans were rolled into one state contract. They are now negotiated school district-by-school district as part of the usual collective bargaining process. But starting January 1, 2018, those health plans must conform to the Affordable Care Act (Obamacare). Those plans have lower premiums but higher deductibles. Scott wants to take the $75 million savings in premiums, apply about $50 million to offset out-of-pocket insurance costs, and use the remaining $26 million to lower property taxes.

The National Education Association (the teachers' union), along with Democratic legislative leaders, have balked at taking health insurance off the local bargaining table. They say it diminishes the collective bargaining process and reduces local control.

Because of the timing, the governor maintains that this is a "once in a lifetime" opportunity to make substantial savings in school costs that will also take some pressure off volunteer school boards across the state.

A vote to add the governor's plan as an amendment nearly passed in the House on May 3, with Speaker Mitzi Johnson needing to make a rare, tie-breaking vote. The closeness of that vote suggested that the governor might be able to sustain a veto, if it came to that.

Both Speaker Johnson and Senate leader Tim Ashe both floated compromise plans that fell short of what the governor requested. They had also complained that such a sweeping change came much too late in the legislative process.

The value of the property tax cut to individual homeowners is somewhat dependent on the income sensitivity portion built into the property tax. But basically, it would result in a 3-cent cut in the rate that would save $75 a year on a home valued at $250,000. A 1.5-cent cut would save $37.50 under that scenario.

Source: Office of the Speaker 5.19.2017