May 17, 2016

The gavel fell on the Vermont General Assembly's 2015-2016 Legislative Biennium late Friday, May 6, 2016.  And, while there are usually myriad opinions of how successful legislative sessions are, there is not much disagreement about this one being one of the least productive in recent memory.

This is especially the case in my view when considering the lack of any substantive measure at all that would have helped to grow our state’s economy.

So what did we do?

State Spending/Budgets

As has been the case for the last several years, we returned to Montpelier in January facing another year of spending that outpaced revenues.  Unfortunately, this has become the new normal in Montpelier.  Unlike families and businesses across this state that have to live within their means, we refuse to ensure that our state government does the same. 

As a result, once again this year, we were required to adjust the current year’s budget significantly.  In fact, the current year’s Budget Adjustment Bill (Fiscal Year 2016) that was passed in February increased expenditures for this current year by $91.8 million in order to cover the expenses that outpaced revenues.

Then, as if on cue, the day before we adjourned, it was announced that our April revenues were $16.5 million below what had been forecasted. 

With regard to the Fiscal Year 2017 budget, the budget that passed on the final day of the session increases General Fund spending by 4.8% over the FY 2016 budget.  Of course, as has also become the norm, these increase exceed the underlying growth in our economy.  Simply put, our spending has become completely unsustainable.

Education Reform 

Revisions to Act 46, the education reform law that passed last year, took a considerable amount of time during the early part of the session.  In the end, while there were some modifications made to the spending caps in Act 46, there was no movement on ensuring that school districts that currently provide high quality education in an efficient and cost-effective way, like Stowe and many others, will be able to remain in tact and continue to do so.

In fact, as the session progressed, my long-expressed fears of the State taking more and more control over the education of our students became undeniable.  Report after report has made crystal clear the desire, and the ability, of the State Agency of Education to control virtually every aspect of our children’s education.  Even now, a community in southern Vermont is facing the wrath of the all-powerful Secretary of Education.  This community has made the decision to withdraw from merger talks, as the community has decided it is not interested in pursuing it.  Yet, even though this is a decision made by the local community, the Secretary of Education is refusing to allow them to withdraw.

There were also no changes made to Act 46 that would have allowed the long tradition of school choice in the 90+ Vermont community that have enjoyed it, to be maintained regardless of merger decisions. 

Health Care

If you recall, in the spring of 2015, in response to many of us calling for change, the Governor set a deadline of May 31, 2015 to have Vermont Health Connect’s “change of circumstances” functionality in place and working.  He also indicated that the automated system that would allow for customers to sign up for plans online would be in place by the fall 2015.  And, most importantly, at that time Shumlin made clear that if either of the two deadlines were missed, we would begin the process of transitioning to the federal exchange or to a state-federal hybrid model.

Even more strident at the time was House Speaker Shap Smith.  He made it very clear that if the May deadline passed, we would begin the transition.  “If nearly two years after we try to bring the exchange online we still don’t have an exchange that works in an effective way, then I believe that we need to move to another system,” he said on Vermont Public Radio.

So where are we now after over two years, an estimated $200 million setting up Vermont Health Connect, and an additional projected $104 million on 2015 and 2016 VHC operations?

Well, the “change of circumstances” function is still not working, thousands of Vermonters continue to be in the limbo “backlog,” and VHC is essentially a mess.  Yet despite the problems and promises, we continue to double down and dig deeper.

Finally, to add insult to injury, the underlying goal of the Health Care Exchange – to make health insurance more affordable – is simply not being achieved.  In fact, both health insurance companies that have products on the Exchange are requesting over 8% increases in their insurance rates next year.  This is on top of the 14% increase from 2014 to 2016.

Economic Growth

I am most sorry to report that of the only two pieces of legislation that would have actually helped move the economic dial in Vermont, neither reached the finish line this year.

A bill designed and championed by Rep. Fred Baser (Bristol) that would have started to address our shortage of housing for young professionals and other middle-income Vermonters failed, in the end, to get the support needed from the Governor and legislative leadership.  While the idea was applauded by most, when it came to the investment needed to achieve the goals, the resources went elsewhere. 

And, finally, a bill that would have allowed for greater opportunities for the freelance and independent workforce, was killed by the labor unions and House Democratic leadership.

While the Independent Contractor bill passed unanimously out of the House Economic Development Committee (6 Democrats, 4 Republicans, and 1 Independent) in mid-March, Big Labor ratcheted up their opposition to the bill after its passage out of committee and got the attention of Speaker Shap Smith.  So, the legislation never progressed any further.  It was neither debated and voted on by the full House, nor was it sent to the Senate and or progress at all through the normal legislative process. 

Opportunities for Future?

Obviously, this past session was a somewhat frustrating one.  To be clear, though, I am very excited for the new leadership that is inevitably coming to Montpelier next year.  I am looking forward to a much more engaged, competent Administration, in addition to new, fresh faces and perspectives on the legislative front.

Like most Vermonters I know, I am looking forward to a realignment of priorities – a renewed focus on addressing our economic challenges and taking advantage of the opportunities we have; a comprehensive long term plan to address our demographic challenges; and a new kind of fiscal restraint when it comes to our state spending.