Issue By Issue: A 2015 Legislative Wrap-Up
Strange. Weird. Bizarre. Lawmakers, pundits and lobbyists have used all these words, and more, to describe the past 18 weeks in Montpelier. Amid all the drama, however, the Legislature managed to get some work done.
Lawmakers introduced 509 bills in the House, and another 152 in the Senate. Only a fraction got committee hearings, let alone made it to the House or Senate floor. But these bills set the state for often intense debates on policies affecting tax code, the budget, renewable energy, public health and environment.
What follows is a list of some of the more consequential items to make it all the way to governor’s desk in 2015, as well as measures that stalled along the way — and a few notes on personnel issues.
- Child Protection
- Cigarette Tax
- Current Use
- Education Cost Containment
- Education Governance Reform
- Energy Bill
- Energy Siting Controversy
- Francis Brooks Ousted
- Income Tax Deductions
- Marijuana Legalization
- Sales Tax
- Same-Day Voter Registration
- Sen. Norm McAllister Arrested
- Sorrell Investigation
- Sugar-Sweetened Beverage Tax
- Payroll Tax/Health Care Reform
- Paid Sick Leave
- Philosophical Exemption
- Water Bill
- VEGI Expansion
- Vermont Health Connect Deadlines
The Shumlin administration and lawmakers began the 2015 legislative session facing a $94 million budget gap in the 2016 fiscal year. That quickly grew to $113 million, after the governor delivered his budget address, after a revenue downgrade. Anend-of-session compromise between the House, Senate and governor resulted in a deal that closed the gap by making $56 million in cuts, raising $30 million in new revenue and using $25 million in one-time funds.
The new revenue will be raised largely through changes to the income tax code. The cuts are varied. State workers are facing a $10.8 million reduction, most of which will come from early retirements and the elimination of positions. As many as 300 state workers could be impacted. Emergency dispatch centers, which were on the chopping block in the governor’s proposed budget, were spared through the first quarter of 2016. A prison in Windsor and an inmate education program were also saved from the governor’s knife.
In response to the deaths of a pair of toddlers under the supervision of the Department for Children and Families in 2014, lawmakers crafted a bill that updates the the state's 19th-century child cruelty law.
The law on the books, which dates back to the 1890s, only protected children who are younger than 10 years old. The new child protection bill removes the age threshold, and will simply refer to children, regardless of age.
As part of a compromise between members of the House and the Senate, the bill does not include a proposal from Senate lawmakers to create a law making it a crime to fail to protect a child from abuse. Proponents said the law is on the books in many other states, while critics said the people most frequently prosecuted are victims of domestic violence who failed to protect their children from similar abuse.
The bill was prompted by the death of 2-year-old Dezirae Sheldon, of Poultney, in February 2014, and the death of 15-month-old Peighton Geraw, of Winooski, two months later. Both children were living with their families but were under the supervision of the Department for Children and Families. Both deaths were ruled homicides.
On Vermont Edition, March 26, 2015: Update On Child Protection Bill
Cigarette smokers have become a sort of favorite target for Vermont lawmakers in search of revenue over the past decade, and 2015 was no different.
Heading into this session, state taxes on cigarettes were already $2.75 per pack. A plan in the House Committee on Health Care back in April would have increased that sum to $4.75.
The $2 per-pack increase was snuffed out pretty quickly. But increases in the excise tax on cigarettes seemed to make their way into nearly every revenue proposal lawmakers considered. Legislators ultimately decided to spend only $3.2 million per year on health care reform – down from the $190 million bill the governor wanted to pass.
But almost all of that $3.2 million will come from the pockets of cigarette smokers, who will see another 33 cents in state taxes added to the price of a pack of cigarettes by 2016. The bill also raises taxes on other tobacco products.
A coalition of lawmakers and land conservationists has been working for the past six years to try to pass reforms to the Current Use land tax program. This year, they finally got them.
Current Use offers lower tax rates to property owners who keep their land in agriculture or forestry. But critics say loopholes in the program have essentially led to legalized tax avoidance. Penalties for withdrawing land from Current Use are so small that developers can in some cases be required to have land in the program for as little as 220 days to save more in property taxes than they pay in withdrawal penalties.
The tax bill that passed on the last day of the session aims to solve this problem by ramping up penalties on people who pull portions of land from Current Use. The payoff point for the program will now be at least seven years, and backers of the compromise say it will help make sure that only people with long-term land stewardship in mind will benefit.
Opponents of the reforms say the new penalties will have an undue impact on longtime farming families, whose land is often their only asset. Farmers who sell off portions of their land on an as-needed basis for cash, some lawmakers say, will suffer under the new rules.
Education Cost Containment
At the start of the legislative session, the popular narrative among lawmakers held that the public is fed up with their continually rising property taxes, a direct result of the continual increase in education spending.
While the drafters of the merger bill argue it will curb education spending by finding savings in administrative costs, they also acknowledged any savings would be found years from now.
Feeling an imperative to do something that would have a more immediate effect on spending, lawmakers included a cost containment mechanism that will, for the next two years, cap the statewide education spending increase at 2 percent, 1 percent below this year's rate of increase.
On the local level, the rate of increase will vary from district to district, depending upon a district's per-pupil spending. So, a district that is a high spender will have little or no room to grow, while a low-spending district will be able to increase its spending by as much as 5.5 percent.
VPR Special Series: Declining Enrollment
On Vermont Edition, Feb. 20, 2015: A New Idea For Paying For Education
Education Governance Reform
Vermont's education governance system will undergo its first fundamental overhaul in 125 years following the approval of a bill that will create larger school districts.
Lawmakers have crafted a bill that offers financial incentives for districts that merge early, and will remove state aid for some small districts that do not pursue merging with their neighbors.
Those districts that do not wish to merge can plead their cases to the State Board of Education, and if they can show they are currently providing a good education while making an efficient use of their money, they will be exempt from having to merge. For the remaining districts, the Agency of Education will create a merger plan, which – following the approval of the State Board of Education – will go into effect in 2020.
For years, Vermont utilities have sold renewable energy credits from solar and wind projects here to utilities in Massachusetts and Connecticut that are mandated to green up their energy portfolios.
The sales generate about $80 million in revenue statewide, and have helped keep rates down in Vermont. But the market in these credits was threatened, unless Vermont could convince other New England states that it was pulling its own weight in regional carbon reduction efforts.
The result is what became known as “RESET,” short for Renewable Energy Standard and Energy Transformation. The bill paves the way for the construction of 400 megawatts of renewable energy capacity in Vermont over the next 17 years, with an emphasis on local energy projects that provide power to nearby homes and businesses, thereby reducing pressure on the statewide transmission grid.
The bill also looks to get utilities into the thermal efficiency industry, and will allow for on-bill financing for weatherization projects that reduce homeowners’ reliance on heating fuels.
Lawmakers and administration officials say the legislation will preserve Vermont’s ability to sell renewable energy credits out of state, and will not put any upward pressure on electricity rates.
Energy Siting Controversy
The energy bill sets the stage for the construction of hundreds of renewable energy projects in the coming years.But some lawmakers worried it didn’t do enough to ensure that the development wouldn’t create eyesores in the communities that would be hosting them.
Senate President John Campbell led the charge for stricter energy siting standards. He said large solar arrays had destroyed views and corrupted pastoral landscapes in parts of the state. Other lawmakers had similar concerns about the impact of wind turbines atop mountain ridge lines.
Campbell and others sought language that would give municipalities more influence over the regulatory process used to approve or deny energy projects. They won some concessions: Towns will get automatic party status in Public Service Board dockets dealing with energy projects they host. The Legislature also adopted minimum setback requirements for solar projects, and towns will be able to impose screening protocols.
But efforts to win towns’ “substantial deference” in the decision-making process fell by the wayside, when critics said it would give municipalities veto power over projects that will be key to the state’s green energy future.
Francis Brooks Ousted
In February, lawmakers voted to replace State House Sergeant-At-Arms Francis Brooks over his perceived mismanagement of protesters during Gov. Peter Shumlin's inauguration address.
During the speech, some protestors with the Vermont Worker's Center sang and chanted outside the House chamber, while inside, protestors repeatedly unveiled banners, all decrying Shumlin's decision in December to abandon his single-payer health care plan.
The decision to remove Brooks led to an outcry from many, who felt lawmakers had done a disservice to the man who had been sergeant-at-arms for eight years and had previously represented Montpelier in the House for more than two decades.
A group of Senate Democrats walked purposefully onto one of the third rails of Vermont politics this year. And while their efforts didn’t result in the universal background checks gun-control advocates had sought, they did enact some substantive changes to the state’s gun laws.
Under legislation signed without fanfare by Gov. Peter Shumlin May 1, it will now be illegal under state law for many felons to possess a firearm. The law also requires Vermont courts to submit to a national database the names of people it has determined are a threat to themselves or others. Those names will then be red-flagged by any federally licensed firearm dealer running background checks on would-be gun buyers.
Second Amendment activists showed up in force over the course of the debate, a demonstration of the intensity of the opposition to background checks and other gun-control measures. Gun-control advocates, meanwhile, showed that they’re building their own political momentum. And the well-funded organization behind the gun-control bill showed that passing gun legislation, while incredibly difficult and divisive, is possible in Montpelier.
On Vermont Edition, Feb. 11, 2015: Taking Aim: The New Senate Gun Bill
Income tax deductions
The battle over income tax deductions isn’t anything new in Montpelier. In 2013 and 2014, House and Senate lawmakers sought to crack down on the deductions filers can use to lower their income tax obligations. In both years, Gov. Peter Shumlin said "no."
Shumlin attempted to beat back a similar plan again this year. But after a late-session showdown over a $30 million revenue plan, the governor relented, and signed on to a plan that will limit the amount filers can deduct to $15,000 for an individual and $31,500 for a household.
The governor won what he says are some important concessions: Charitable contributions and health care expenses, for example, will be exempt from the cap.
Still, the plan makes more progressive an income tax code that many lawmakers say offers too many opportunities for wealthy Vermonters to reduce their tax bills. The legislation will have the most severe effect on people reporting annual adjusted gross income of more than $1 million annually; those filers will pay on average about $5,000 per year more in taxes.
The average hit to households making between $75,000 and $100,000 will be $180.
The legislation also ends a deduction that allows people to write off from this year’s tax liability what they paid in state and local taxes the year prior.
Legislation to legalize marijuana in Vermont was unveiled in February but it was not taken up in committee for consideration. The legislation was expected after a Rand Corp. study released in January showed the state could reap significant revenue if it legalized marijuana. The study found the state could net as much as $50 million in new revenue by taxing and regulating the drug, but it would come with some consequences and other expenses.
The legalization of marijuana, under the legislation introduced by Sen. David Zuckerman, P-Chittenden, would provide revenue to the state through a series of excise taxes and fees. Zuckerman proposed a $2,000 application fee for marijuana establishments and an annual registration fee ranging from $1,000 to $50,000. Those fees would be used to implement, administer and enforce the law. An excise tax of $40 an ounce would be charged for marijuana flowers. A $15-an-ounce excise tax would be levied on any other marijuana and $25 for each immature marijuana plant sold by a cultivator. The bill earmarks 40 percent of the revenue raised through the excise taxes for public education about the risks of alcohol, tobacco and marijuana consumption, and for criminal justice programs and substance abuse treatment. The taxes would also fund law enforcement and academic and medical research on marijuana.
Advocates for legalizing marijuana in Vermont are expected to make a push to do so during the 2016 legislative session. But Shumlin and legislative leaders appear to be in no rush to act.
On Vermont Edition Jan. 19, 2015: Legalize It? Study Outlines Questions About Legal Pot
Paid Sick Leave
The session again came and without a paid sick days bill passing through the Legislature, but it’s looking more and more like it’s only a matter of time now.
Proponents of requiring employers to provide their workers with paid sick days won their biggest victory to date when the measure passed on the House floor. The legislation represents a hard-fought compromise between businesses and advocates. The legislation would require a minimum of three days a year of paid sick leave in the first two years of the bill, then five days annually thereafter. The mandate applies to part-term workers, but seasonal and temporary workers will not be included.
Rule changes enacted at the outset of this year’s session mean the Senate will automatically take up the measure in 2016. And while the proposal faces some powerful opponents in the Senate, the legislation now has the vocal support of Gov. Peter Shumlin. And the Obama Administration, which has made paid sick leave one of its top labor issues, has urged Senate President John Campbell to get the bill past the legislative finish line.
Payroll Tax/Health Care Reform
Health care reform was a story of diminishing returns as the legislative session dragged on. Last fall, most people believed the state would be moving forward with a single-payer health care system. But Gov. Peter Shumlin shocked the state’s political establishment on Dec. 17 when he announced he was abandoning his signature policy goal because of its cost.
About a month later he revealed a new grand plan — a 0.7 percent payroll tax on Vermont businesses to raise $90 million and draw down an additional $100 million in federal funds. The bulk of the money would be used to reduce the cost-shift, where private insurance premiums make up the difference for low payments to providers by Medicaid and Medicare. The plan was rejected out-of-hand by most lawmakers. The House Health Care Committee tried to advance a $52 million plan to address the cost shift with a 0.35 percent payroll tax and a 2-cent-per-ounce excise tax on sugary beverages. But that plan was scaled back by the House Ways and Means Committee to $20 million and then $12 million. But even those plans could not secure enough support.
Lawmakers eventually passed a plan that uses about $3 million in state funds, paid for by increasing the cigarette tax by 33 cents. That plan provides a modest boost in Medicaid payments to primary care providers, but nowhere near what Shumlin had hoped to do.
The issue of vaccinations, and whether to revoke the philosophical exemption many parents use to avoid state immunization mandates, gripped the Statehouse for much of 2012. But no one expected it to resurface this year.
Then came a measles outbreak linked to exposure at Disneyland, and suddenly the issue landed on the front burner in Montpelier. The issue generated every bit as much controversy as it did three years ago, and a public hearing drew a crowd of 300 residents, many of them parents pleading with lawmakers not to eliminate their ability to use the philosophical exemption.
But there was also testimony from doctors, parents of children with suppressed immune systems, and a commissioner of health who worries vaccine rates have gotten dangerously low in some parts of the state. Those voices were enough to convince House lawmakers that the removal of the exemption is a necessary step in avoiding the reemergence in Vermont of vaccine-preventable diseases.
Gov. Peter Shumlin doesn’t support eliminating the exemption – it means parents who don’t get their kids vaccinated on the state-mandated schedule won’t be allowed to attend school. But he says he’ll probably sign the bill anyway.
Back in 2011, a special panel created by the Legislature to overhaul the state’s tax code submitted a bold recommendation to lawmakers: Expand the sales tax to include services, instead of only goods.
Services make up an increasing share of Vermont’s economy, and government’s failure to tax those transactions, according to the Blue Ribbon Tax Commission, has eroded one of Vermont’s most important revenue streams. The plan had an added benefit: By broadening the base to include services, the state could lower the rate.
Chittenden Sen. Tim Ashe, chairman of the Senate Committee on Finance, decided 2015 was the year to adopt the proposal. By expanding the tax to include services like dry cleaning, carpentry, attorney fees and accounting, Ashe said Vermont could lower the sales tax rate to 4.75 percent, and improve Vermont’s long-term revenue trajectory.
The proposal faced stiff opposition from many business groups, however, and was relegated to a study.
Same-Day Voter Registration
Voters in Vermont will, beginning in 2017, be able to register to vote just minutes before casting a ballot when Gov. Peter Shumlin sings into law same-day voter registration legislation.
Current law requires voters to be registered to vote by 5 p.m. on the Wednesday preceding an election. Under the legislation, voting will be allowed if a voter completes and submits an application to the presiding officer at a polling location on the day of an election. No identification requirements are included in the legislation. Some town clerks and lawmakers raised concerns about the possibility of voter fraud under such a law. But others argued that instances of fraud have been negligible.
Vermont Secretary of State Jim Condos was a strong supporter of the bill, saying it would allow more Vermonters to participate in elections. Vermont will join 14 other states and the District of Columbia in allowing same-day voter registration when it is signed into law.
Sen. Norm McAllister Arrested
The mood inside the State House darkened when Franklin County Republican Sen. Norm McAllister was arrested outside the capitolon May 7 and charged with sex crimes. He pleaded not guilty to three felony counts of sexual assault and three misdemeanor counts of prohibited acts the next day. Court documents allege that McAllister forced women to have sex with him in exchange for rent and used sex as a punishment. One woman, who worked for the 63-year-old McAllister on his farm and as an assistant or intern in Montpelier, alleged she was possibly as young as 15 when he first assaulted her.
The issue was further clouded when Republican Lt. Gov. Phil Scott told reporters on May 11 that McAllister would resign within 24 hours. But McAllister himself said he was not aware that promise had been made, and days later told Scott in a phone message that he would not resign. Senate President Pro Tem John Campbell, D-Windsor, said the Senate would move to expel McAllister if he returns to the State House and rejoin the body.
The tables have been turned on Attorney General William Sorrell, who finds himself at the center of an investigation over the campaign contributions he has received.
In March, Sorrell accused Dean Corren, the Progressive/Democratic candidate for lieutenant governor during the November election, of campaign finance violations. However, following some deep-dive investigative reporting from Paul Heintz at Seven Days, Sorrell has found himself under the magnifying glass after he accepted campaign money from private lawyers and then joined them in a lawsuit against 29 oil and gas companies.
Sorrell, a Democrat who has been the state's attorney general since 1997, initially rejected calls for an investigation into his own campaign finances, saying he knew he hadn't done anything wrong and the investigation would be a waste of taxpayer money.
However, Sorrell has since reversed course and called for an investigation, which will be headed up by Tom Little, an attorney and a former member of the House of Representatives.
Sugar-Sweetened Beverage Tax
Backers of a new tax on soda and other sugary beverages headed into the session believing 2015 might be their year. The proposal had some lingering momentum from 2013, when it made it through one key committee. A $113 million budget gap meant lawmakers might be more receptive to a previously discarded revenue proposal. And, perhaps most importantly, the proposal had a committed supporter in Calais Rep. Janet Ancel, the Democratic chairwoman of the House Committee on Ways and Means.
The 2-cent per-ounce tax on soda and other sugar-sweetened beverages – supporters say it would lower consumption of sugary beverages and curb childhood obesity rates – flew out of the gate in the House Committee on Health Care. Lawmakers there voted to use the $30 million the tax would raise to fund financial aid for low-income Vermonters in the health care exchange, and to increase Medicaid reimbursement rates.
The plan faced a harsher reception in the Committee on Ways and Means, where lawmakers scaled the surcharge back to just half a cent per ounce. But even that small victory would prove short-lived. The tax on sugary beverages was eventually scrapped from the health care bill altogether. And supporters again failed to get what would have been the first floor vote in the nation on a sugar-sweetened beverage tax by either chamber of a state legislature.
The beverage industry spent more than $500,000 to fight the proposal.
On Vermont Edition, Feb. 13, 2015: How Sweet The Tax?
Gov. Peter Shumlin dedicated much of his 2015 inaugural address to the need for heightened water quality efforts in Vermont. And the Legislature responded by delivering a bill to his desk that raises about $10 million to remediate pollution.
Water quality advocates say the appropriation won’t come close to solving the problem. But they say it’s an important first step in reducing the flow of phosphorus into lakes and rivers, and reducing the toxic blue-green algae blooms that have begun to spread annually in Lake Champlain and elsewhere.
Lawmakers considered numerous revenue mechanisms before landing on an increase in the property transfer tax, combined with fees on certain polluters, to pay for the program. The bill funds 20 new positions at the Agency of Agriculture and Department of Environmental Conservation. The new employees will help administer and enforce new programs and rules that address runoff from farms, roads and commercial developments.
Gov. Peter Shumlin says he expects the legislation to satisfy federal regulators, who have threatened to impose costly pollution-reduction mandates on the state if it doesn’t do more to clean up Lake Champlain.
On Vermont Edition, April 15, 2015: Clean It Up: How To Stop Polluting Our Waterways
On Vermont Edition, Jan. 28, 2015: From Manure To Education, Talking Lake Cleanup With Two Policy Leaders
Economic development officials say the Vermont Economic Growth Incentive is the premier job-creation mechanism in state government. And the program is getting a makeover designed to spur job growth in economically distressed parts of the state.
The program offers tax rebates to companies who create jobs that meet minimum wage requirements. But Gov. Peter Shumlin says those requirements are too high for some parts of the state, where above-average unemployment and other economic stresses have depressed the wage scale.
The revisions mean that jobs paying as little as $12.80 an hour will be eligible for the VEGI program. Critics say it’s irresponsible for the state to offer incentives to companies paying less than a livable wage; they say the state will suffer fiscal damage since those workers will likely be eligible for government-subsidized health care, food assistance and other human service programs.
But proponents say the plan will give aspiring workers a foot in the door in careers they wouldn’t otherwise have access to.
Vermont Health Connect Deadlines
Gov. Peter Shumlin laid out a new timeline for upgrading Vermont Health Connect, the state’s online health insurance marketplace, in March. He promised that co-called change-of-circumstance, the ability for customers to make changes to their personal information online, would be working by the end of May. He also promised an automated system allowing consumers to sign up for health plans online would be in place by the fall. Failing to meet the goals, according to Shumlin, will result in the state transitioning to an exchange run by the federal government, or perhaps a state-federal hybrid model.
The promises followed a host of missed deadlines and technological setbacks since the exchange launched in October 2013. The system has never performed as expected and been a source of frustration for its customers, the administration and lawmakers. Shumlin has since backed off the first deadline at the end of May, saying a decision to abandon the exchange will not be made until the fall. But some lawmakers, including House Speaker Shap Smith, have said they want to begin the transition in June if change of circumstance is not ready. With the May deadline fast approaching, the administration could face pressure from Smith and others to act if change of circumstance still does not work.