Legislature Adjourns...For Now

The 2017 Vermont legislative session came to a close shortly after midnight last Thursday. The end came after a day of meetings between Senate leader, Tim Ashe, House Speaker, Mitzi Johnson and Governor Phil Scott working to find a compromise solution to the Governor’s proposal to save taxpayers up to $26 million annually on school employee healthcare. Unfortunately agreement was not reached and in his closing remarks to the legislature, Governor Scott expressed his disappointment and indicated he would veto the state budget and education funding bills.

 Because of a change in education health care plans in response to Obamacare requirements, all plans will need to change and will be the subject of negotiations in each school district this year. The Governor’s proposal would move the negotiation of the health care benefit to one state level negotiation with the NEA. The other parts of the benefit package would continue to be negotiated at the local school district level. His proposal assumes $75 million in premium savings (new plans are less expensive, but have higher deductibles) and would allocate about $49 million to be put into employee HSA or HRA accounts to keep teachers and employees whole with the higher deductible plans. The resulting $26 million is the potential savings that would benefit property taxpayers.
 
The NEA and the Democratic House and Senate leadership has been steadfast in their opposition to the change and as a result, a stalemate on the issue will likely mean a veto on the budget and education financing bills.
 
The legislature will return to the State House on June 21-22 in the likely event of gubernatorial vetoes. While a state budget must be enacted by July 1 in order to avert a shutdown, Governor Scott has indicated he would not allow that to happen. An article in vtdigger gives a perspective on the politics.
 
Margolis: How to win by losing

If the education financing bill does not pass, and the yield numbers are not set through some other vehicle, then:

  • Non-Residential property rate is set at $1.59
  • Homestead and Income rate are not able to be assigned, this would leave a $425 million hole in the Education Fund.

 

Budget Highlights:

  • 1.5% General Fund spending growth is below the FY 2018 forecasted revenue growth of 3.7% and below the 2% projected Gross State Product growth.
  • Adds one new position for tech training and education as well as to help employers with employee job placement
  • Provides for up to $15M to cover a potential one-time FY 2018 revenue downgrade due to corporate tax refunding
  • Meets the statutory requirement of having 5% in reserves
  • Increases Rainy Day Fund from $6.8M to $7.3M with additional amounts possible at the close of FY 2017 and FY 2018
  • $3.88 million to the Vermont State Colleges System, $880,000 for the merger of Johnson and Lyndon state colleges
  • $9.3 million increase for the state's mental health system
  • $2.5 million to improve access to child care
  • $35 million bond authority to create affordable housing, a proposal that originated with the governor
  • $5 million reduction that the secretary of administration will be directed to find across state government

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