Tag Archives: House Appropriations Committee

Winning the Speakership was the easy part

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Congratulations to Mitzi Johnson, the apparent successor to Shap Smith as Speaker of the House. She pipped House Majority Leader Sarah Copeland-Hanzas at the post. And although her selection must be ratified by the Democratic caucus and then the full House, there’s no real doubt that she will win.

Johnson is whip-smart and highly capable. She was skillful at managing the House Appropriations Committee, which is a hell of a trick.

As for being Speaker, well, she’s about to discover how different and how difficult that job is.

Shap Smith made it look effortless, but there was constant furious activity below the waterline. He also enjoyed the support of an informal cadre of loyal House members who helped him keep tabs on the ebb and flow of lawmaking and the interpersonal dynamics that must be managed effectively if the House is to function. In that regard, a capable inner circle is just as important as the actual caucus leadership.

Johnson won’t have that. She may or may not realize the importance of having that. But the House is a somewhat random gathering of 150 willful souls with 150 agendas. And by “agendas,” i don’t mean policy; I mean unique admixtures of principle, practicality, intellect (or lack thereof), knowledge (or lack thereof), curiosity (or lack thereof), debts payable and receivable, and ludicrously overdeveloped senses of self-preservation..

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The budget mess, again

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One of the annual features of the Shumlin Era is the battle to close a budget gap*. There are reasons for this: the rising costs of (1) operating a government (mostly health care), (2) operating public schools (mostly health care), and providing social services (mostly health care).

*To be fair, it was also a feature of the Douglas Era, but the dynamic was different: Republican governor versus Democratic legislature. 

And then there’s the revenue side. Vermont is suffering from a creaky tax system that doesn’t reflect current economic realities, and is bringing in less and less money over time.

The Legislature is now in the throes of dealing with Budget Gap 2016, which has many of the features of past editions. Cries of doom, unexpected revenue upgrades, patently unworkable/unpopular money-raising ideas from Shumlin’s crack policy staff, and lawmakers trying to find alternatives. This year, we also have a significant difference between administration and Legislature over the size of the budget gap; per VTDigger, House budget writers say the administration omitted more than $9 million in basic government operations from its proposed budget…

…including a pay increase for state workers (estimated at $2 million to $6 million, depending on the results of a fact finder’s report and ongoing contract negotiations), pay increases for child care and direct care workers ($1 million each), and funding for the Low Income Home Energy Assistance Program ($4 million).

Shumlin’s modest proposals for new spending have already been killed by the House Appropriations Committee, whose first priority is closing the gap between current obligations and state revenue.

It’s a depressing Rite of Mud Season that has drained the energy of the Democratic caucus, party, and electorate.

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Things I learned at the Statehouse (or, My First Listicle!)

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I’ve been blogging about Vermont politics for almost three and a half years (first at Green Mountain Daily and then here), but this was the first year I spent considerable time observing the Legislature at work. In previous years, I’d dropped in here and there, but I became an irregular regular this time around.

In addition to following the fates of particular bills, I also took away some overall lessons. Many of them actually positive. And here they are, in no particular order.

— Our lawmakers work pretty hard. They get paid a pittance, and spend lots and lots of hours under the Dome. Seemingly endless hearings and debates, having to actually read and understand legislation: I wouldn’t have the patience for it. And their attendance record is shockingly good. Many of them have real jobs and/or travel long distances to Montpelier; on any given day, almost all of them are there.

— There’s always plenty of partisan rhetoric flying around, but people who disagree on the issues work surprisingly well together. This is especially true in committees, where a small group of folks work collaboratively, and cooperatively. It’s not all peaches and cream, but there were times when I was watching a committee debate and it was hard to tell which lawmaker came from which party.

Not that they were selling out; just that they were more interested in getting stuff done than in scoring political points.

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Rent-to-own: Fixin’ a hole

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This morning, I sat in on a House Appropriations Committee hearing on S.73, a bill that would set limits on the rent-to-own industry — an industry that’s virtually unregulated and preys on cash-poor Vermonters.

For those unfamiliar, RTOs offer household furnishings and appliances with very little cash up front, but interest rates that’d make a banker blush. Not to mention undisclosed fees and charges. According to Legislative Counsel David Hall, current state law gives the Attorney General rule-making authority; but RTOs write their contracts in a way that effectively puts them beyond the reach of current law.

Hey, I’m sure that’s just a coincidence.

The result is a Wild West marketplace that, according to VPIRG, results in consumers “paying many times the original price of the original item- far more than they would pay if they purchased the item from a traditional retail establishment.”

The bill would establish price caps and disclosure requirements on the industry.

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Is there going to be a health care bill? Like, at all?

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The clock is ticking on the 2015 legislative session. We’re less than a month away from the usual adjournment, and a passel of “big bills” is just now crossing from the House to the Senate. These include the tax and budget bills, school reform legislation, the water cleanup bill, and the RESET  renewable energy package.

Conspicuous by its absence from this roll call of heavy lifting: the health care bill. It’s been dramatically downsized, and is still being batted around among three House committees. This week, the Ways and Means Committee barely managed to achieve a majority on a financing package after a lot of hand-wringing and internal disagreement. The Health Care Committee produced a scaled-down version of reforms costing about $20 million per year. But the Appropriations Committee, which has to approve the reform spending, has yet to weigh in. Approps chair Mitzi Johnson says her panel will hear testimony on the bill next week.

If that committee takes any route besides endorsement of Health Care’s bill, there may be a fresh round of back-and-forth between those two panels, just as there was between Health Care and Ways and Means on the revenue package.

And then, sometime next week at the absolute soonest, the health care bill will make its way, bloodied, bruised and limping, to the House floor.

If not “the absolute soonest”? We’re getting awfully close to mid-April.

Frankly, it’d take an uncommon outbreak of consensus in the House and between House and Senate for a health care bill of any kind to achieve passage in this session.

There’s a flood-stage ice jam of legislation forming in the Senate. This morning I watched one committee chair working with his staffer to find time to accommodate long and growing lists of potential witnesses. Can we assemble early some days? Can we schedule Monday meetings, an unusual and undesirable step, especially for lawmakers from distant parts of the state? The thought in my mind was, how can they possibly get all this done?

Breaking that jam and moving major bills will depend on the Senate running uncharacteristically smoothly, with unusually effective leadership (cough*John Campbell*cough) and widespread voluntary ego-suppression in Vermont’s Most Self-Important Deliberative Body.

The health care bill, if it gets to the Senate in some form, will take its place in line behind the other Big Bills. Most importantly, it will be the last of the big revenue bills to hit the Senate, and who knows how much appetite they have for tax increases. There’s a significant cohort of moderate-to-conservative Senate Democrats that can diminish or kill any tax measures, and they may be out for blood after pretty much having to approve new money for Lake Champlain and to fill part of the budget gap.

From what I’ve heard, the Senate’s outlook is even more of a mystery this year than usual, and that’s saying something. Big picture, the odds appear to be against any meaningful health care reform getting through the legislature this year.

Which would be a bad thing in three important ways:

— The bill would reduce the sinfully large Medicaid gap. The Shumlin plan would substantially reduce it; the House Health Care plan would make a series dent, at least for primary care providers.

— The bill, in either form, includes more money for proven cost-saving strategies in Blueprint for Health and the Green Mountain Care Board. Continuing to bend the cost curve is crucial to the long-term success of the reform project.

— And third, for those who insist on the humanitarian angle, is that either bill would ease access for thousands of working poor Vermonters.

Lawmakers and legislative leadership know all this. If they didn’t, the bill wouldn’t have gotten as far as it has in a difficult year. Improving health care is a serious priority — but so are a lot of other things. It’d be a shame if health care fell victim to the legislature’s time crunch, but it wouldn’t exactly be a surprise.

The nice and the necessary

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Congrats to the House Republican Caucus, which finally came up with something like a budget plan, on the very day the House Appropriations Committee passed a budget. Three observations to begin:

— The committee vote was 11-0. Even so, the Republicans were lambasting the budget even before the vote was taken. Are the committee’s Republican members hypocrites, or is it harder to be a simple-minded partisan when the rubber hits the road and you’re in a small room with your Democratic colleagues, than when you’re facing the camera with fellow Republicans?

— The Republicans clearly didn’t take the budget-writing process very seriously, since they waited until Approps had finished its work before offering a single specific cut. Even worse, during the process Republicans frequently objected to cuts proposed by Democrats — again, without suggesting alternatives.

— The Republicans’ budget plan is unworkable on its face. Its major initiative is a call for zero growth, but that’s (a) impossible because some programs are growing, like it or not (Lake Champlain cleanup, for instance), and (b) an abdication of the Legislature’s responsibility to draw up a budget. The responsible course, as Approps chair Mitzi Johnson has pointed out, is to fulfill the legislature’s duty and make the hard choices. Across-the-board slashing is the coward’s way out.

The GOP caucus did identify some cuts they’d like to make — finally. Most of them are short-sighted as well as mean-spirited:

The cuts [House Minority Leader Don] Turner put on the table Monday include eliminating grants to substance abuse recovery centers, scrapping a childcare subsidy for poor mothers, cutting funding for state colleges by 1 percent, and taking $5 million from a fund that would otherwise provide college aid to Vermont students.

Republicans also say spending reductions on items such as the renter rebate, financial assistance for health insurance and the Vermont Women’s Commission are preferable to increasing revenues that would otherwise be needed to fund levels recommended for those programs in Gov. Peter Shumlin’s budget.

Okay, let’s make it harder for addicts to get clean, harder for poor mothers to hold down a job, make higher education less affordable, and make health insurance less accessible. All those cuts would save money in the short term, but cause even more expensive social damage in the long term. The Democrats are trying to walk a fine line, and craft a budget that’s not fiscally irresponsible while still helping to make Vermont a better place to live.

Which brings me to something that Senate Minority Leader Joe Benning said last Friday on The Mark Johnson Show. I don’t have the exact quote, but the gist was, “There are things that are necessary, and things that are ‘nice.’ At a time like this, we cannot do the things that are ‘nice.'”

That sounds good and responsible, but the devil is in the definitions.

Do you think low-income heating assistance is nice or necessary?

How about broadening access to health care? A social obligation, or an extra?

Let’s talk substance abuse treatment, at a time when Vermont is in the throes of an addiction epidemic. Necessary or nice?

The good Senator apparently believes all these things fall into the “nice” category. Many of us don’t agree.

Okay, now let’s look at some items that aren’t on the Republican cut list — and weren’t on the Democrats’ either, for that matter. Necessary or nice — you make the call!

— The state giving $2.5 million to GlobalFoundries, a move that will do nothing to keep the company in the state. On a worldwide corporate scale, that’s nothing. It amounts to a burnt offering meant to propitiate the corporate gods. And it takes a big leap of faith to think it’ll have any effect whatsoever. Necessary?

— The state continuing to let unclaimed bottle deposits go to bottling companies. That’s a $2 million item, I’ve been told. Is that a necessary giveaway? Hell, I wouldn’t even class that one as “nice.” “Noxious” is closer to the mark.

— When ski resorts purchase major equipment, they don’t have to pay sales tax. That’s another $2 million a year. Is that necessary, in any definition of the word?

— For that matter, we’re letting the ski industry make a fortune thanks in large part to bargain-basement leases of public lands. The industry is understandably loath to reopen the leases, but there are ways to get it done. Instead, we’re letting them ride. Necessary? Hell no. Nice? Only for the resort owners.

— Vermont is one of only a handful of states that exempts dietary supplements from the sales tax. Nice or necessary?

In addition, the state gives quite a bit of money in small grants to private and corporate groups. Here’s a few examples:

— The Vermont Technology Alliance gets a $52,250 grant. Why?

— The Vermont Captive Insurance Association gets $50,000 to pay for “promotional assistance.” I realize the industry is a strong positive for Vermont, but the grant is certainly not necessary.

— The Vermont Ski Areas Association gets $28,500. This is the same group that refuses to reopen the leases. Why are we rewarding their intransigence?

That’s just a few I happen to know about. I’m sure there’s lots more. Are grants to industry “necessary” or “nice”? If we’re asking the poor and downtrodden to take major hits to the social safety net, couldn’t we ask our industries to accept at least a haircut?

And if we want to promote business in Vermont, why not take back all these penny-ante grants, put part of the money into a coordinated statewide campaign (like the one proposed by Lt. Gov. Phil Scott’s economic-development crew) and bank the rest?

Also, the state Senate is considering a bill that would make Vermont’s economic development incentives easier to access. Supporters, such as Republican Sen. Kevin Mullin, posit the bill as an investment in Vermont’s future. 

Which is fine. But so is increasing access to higher education, providing child care for working mothers, and helping addicts get clean. Those social programs aren’t just “giveaways,” they are investments in a safer, healthier, more productive Vermont.

Unfortunately, they are investments on behalf of Vermont’s voiceless. LIHEAP recipients and working mothers and addicts and prison inmates can’t hire lobbyists or mount a PR campaign. So we too often fail to invest in them, while we’re more than happy to invest in corporations that might or might not use the money productively — but in either case, it’s definitely in the “nice” category, not the “necessary.”

So you see, Senator Benning, I agree with you. I just have different definitions of “necessary” and “nice.”

The long and winding (and circular) road

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It’s been a very long week at the House Appropriations Committee, which has been trying to close the remaining $18 million or so in the budget gap for Fiscal Year 2016. In today’s session, members tried everything they could think of, and then some, to balance the budget while avoiding some of the “big uglies” — the proposed cuts that nobody wanted to make.

Shall I cut to the chase? After advancing through the five stages of grief, they ended up accepting pretty much the entire list, including $6 million from LIHEAP, $2 million from a Department of Children and Families weatherization program, a $1.6 million hit to Reach Up, a million-dollar cut for the Vermont Veterans Home, a reduction in state funds for Vermont PBS, and $817,000 from Vermont Interactive Television.

This list was dubbed a “wish list” by the committee — not because they wanted to cut the items, but precisely the opposite: their wish was to avoid having to cut these items that were put on the chopping block in Gov. Shumlin’s budget proposal.

There were a couple of adjustments. As reported in my previous post, the committee adopted Rep. Maty Hooper’s plan to phase out the state prison at Windsor and devote some of the savings to re-entry programs aimed at reducing the inmate population and avoiding the export of more inmates to out-of-state prisons. And a $500,000 cut to the judiciary system was technically made a one-time cut, with the understanding that the system will reform itself in the coming year to generate equivalent savings in future years.

All the “wish list” cuts adopted by Appropriations added up to a little over $14 million in savings, mainly from the Agency of Human Services. Which is almost inevitable; the committee was looking for cuts only in General Fund programs, which leaves out a significant share of state spending. Most General Fund spending is in Human Services, so that’s where the cuts had to come from.

Mind you, nothing was finally decided today. Some committee members still hope to restore some of the cuts, but in order to do so, they’ll have to find equivalent cuts elsewhere. (Appropriations has no authority to increase revenues; it only oversees the spending of state funds.) As they put it, “buy back” some cuts. That seems unlikely, however; at day’s end, the committee was still $1.93 million short of a balanced budget. So in order to restore any of today’s cuts, they’d have to find more than $2 million in savings elsewhere.

Appropriations Chair Mitzi Johnson looking for cuts of any size, large or small.

Appropriations Chair Mitzi Johnson looking for cuts of any size, large or small.

And they tried really hard today. Most of the committee’s Democratic majority did not want to impose Shumlin’s cuts. Committee Chair Mitzi Johnson repeatedly invited members to come up with their own substitutes. And they all looked high and low, with almost no success.

At one point, Johnson asked members to split up into “unlike pairs” to discuss the “wish list” and other possible cuts. That session lasted almost an hour, and ended with several members making cellphone calls in pursuit of information on possible savings. Items of as little as a few thousand dollars were offered.

In the end, they wound up back at the “wish list.” In the absence of any alternatives, and with guidance from House leadership that only a certain amount of new revenue would be available, the Appropriations Committee bit the bullet and tentatively approved all the cuts on the “wish list.” It also approved a couple million in additional savings that weren’t on the “wish list.”

Watching all this made me appreciate how hard it is to find savings in the budget. For all the conservatives’ cries of waste and abuse and lavish spending, Republican members had no more success than Democrats in finding fat to trim. In the end, committee members of all stripes were reluctantly united behind a budget proposal that will bring painful cuts to many areas of government. There were no easy calls.

This is an early step in the process. The budget has to get through the full House, where trouble may loom in the form of a Republican/liberal coalition that opposes the budget for very different reasons. If it gets through the House, it’ll have to make its way through the Senate’s often weird and unpredictable gauntlet. But the Appropriations Committee tried and tried and tried; and in the end, it couldn’t find more palatable alternatives to Gov. Shumlin’s budget proposal.

Mary Hooper pulls some fat from the budgetary fire

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Previously I brought you bitter tidings of a budget cut that would mean sending more Vermont inmates to for-profit, out-of-state prisons.

Well, my pessimism was premature. Today, Rep. Mary Hooper (D-Breezy Acres) introduced a plan to phase in the closure of the Southeast State Correctional Facility, and devote some of the projected savings to new re-entry programs designed to lower the inmate population. The plan appeared sound and convincing to the House Appropriations Committee. If it all works as planned, Vermont’s inmate census will be low enough when the prison closes, that no out-of-state transfers will be required. (Corrections Commissioner Andy Pallito had estimated that 100 more inmates would have to be exported to the tender mercies of the Corrections Corporation of America.)

And bonus: the released inmates will be better prepared to make a successful re-entry into civilian life. That makes them less likely to re-offend.

Her proposal was accepted by the Appropriations Committee and folded into its budget plan. I don’t know all the details of Hooper’s proposal; I didn’t have a chance to speak with her today. But it’s good news. It turns a negative into a positive, and still allows the state to bank $1.7 million in savings from the prison closure.

More on today’s hot and heavy Appropriations action coming soon. Warning: not a lot of good news.

Rebalancing the inmate portfolio

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The House Appropriations Committee is putting in long hours this week, trying to finish work on the budget by Friday afternoon. I don’t envy them their task… but I will point out one little detail regarding one of its proposed cuts.

One of the cuts in committee chair Mitzi Johnson’s list is the closure of the Southeast State Correctional Facility in Windsor. Well, according to Corrections Commissioner Andy Pallito, that would mean sending another 100 inmates to out-of-state, for-profit prisons.

Vermont has been making strides toward bringing its inmates home — possibly inspired by last summer’s court ruling that sending male inmates out-of-state without also sending female inmates is unconstitutional. The state chose not to appeal for fear the decision would be applied to the whole system. As it stood, only the inmate who filed suit was brought back to Vermont.

But the legal Sword of Damocles still hangs by a hair, so dozens of inmates have been repatriated in recent months. The out-of-state count is down to 340.

The fly in the ointment is that our contract with the Corrections Corporation of America calls for a minimum census of 380 inmates. If the count falls below that and stays there long enough, CCA can impose penalties.

That’d be inconvenient.

Our Democratic rulers seem to be taking steps to prevent that from happening. Gov. Shumlin’s budget proposal included the lease of 60 inmate beds to the U.S. Marshal’s office. And now we have a plan to close a state prison. The lease is a revenue source; the prison closure is a budget savings; and on top of that, we get the added bonus of avoiding penalties!

Everybody wins, right?

Well, everybody except the inmates we’ll continue to ship out of state, far away from their families and friends.

Happy budget fun times

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The two House committees in charge of the state’s purse strings got together for a joint meeting Wednesday afternoon, and heard a solid hour of sobering news. The state has a substantial budget gap that seems to be widening by the day, and there is little appetite for the scale of cutbacks or tax increases necessary to close it. The two panels: Ways and Means, which acts on taxation and revenue; and Appropriations, which makes the spending decisions. In a tough budget year like this one, each of the two panels wanted to gain a better understanding of the challenges facing the other.

The bulk of the session was a walkthrough of proposed expenditures and revenues for the coming fiscal year, led by Joint Fiscal Office budget guru* Sara Teachout.

*Not necessarily her actual title. 

Sara Teachout of the Joint Fiscal Office, pointing to a large flatscreen display full of dispiriting numbers.

Sara Teachout of the Joint Fiscal Office, pointing to a large flatscreen display full of dispiriting numbers.

She began the session by outlining one of the little-known worms in the budgetary apple: cuts in spending would take effect on July 1, the start of FY 2016, but many of the potential revenue enhancements would not. For example: If the state eliminates a tax deduction on personal income, that revenue would not be realized until April 2016, when 2015 tax returns are due. That’s three-quarters of the way through FY 2016.

Much of Teachout’s presentation was a repeat of her tax-budget tutorial I heard at a recent Ways and Means meeting; I wrote three reports on the meeting, which can be found here, here, and here. (If you don’t want to wade through all three, do the last one first.) She did offer more detail at this joint meeting, including a very specific listing of the real costs of various tax expenditures and deductions. (All of her documents are posted on the Ways and Means webpage.)

There was some limited discussion after Teachout’s teach-in. Most significantly, Ways and Means chair Janet Ancel restated her support for a cap on tax deductions: “Speaking for myself, it’s the right thing to do if we’re looking for new revenue.” Rep. Mary Hooper, a member of the Appropriations Committee, noted that a cap on deductions “spreads out the impact, rather than zeroing in on specific exemptions or deductions.”

As I reported previously, Vermont’s tax rules allow the average million-dollar earner to claim hundreds of thousands of dollars in deductions. That’s why top earners pay an effective income tax rate of 5.1% instead of the statutory rate of 8.95%.

Two years ago, the House approved a cap on itemized tax deductions at 2.5 times the standard deduction; the measure died, mostly because of Governor Shumlin’s opposition. This year, he has signaled his openness to changing deductions and expenditures, even as he remains steadfast in opposing increases on his Big Three taxes: income, sales, and rooms & meals.

The cap would, IMO, greatly enhance the fairness of our state tax system. Currently, top earners pay a lower proportion of their earnings in state and local taxes than people in any other income group.

There was also some support in the room for looking at some of the sales-tax exemptions. For example, the state could impose a ceiling on clothing purchases — making them tax-exempt only below a certain dollar amount.

Rep. Mitzi Johnson, Appropriations chair, said her committee will “begin a conversaiton soon to lay out targets [for spending cuts].” She noted the importance of the joint meeting for gaining a clearer picture of “where the revenue could be coming from.”

The meeting was one more small step in what promises to be a long, grinding process leading to decisions that will make at least some constituencies unhappy. As one Statehouse observer told me — only half jokingly — “it might take until July” before they can work everything out.