Vermont lawmakers closed out what Senate President Becca Balint called “a session for the history books” Friday evening after passing a $7 billion state budget that includes moonshot investments in broadband, affordable housing, climate initiatives and other longstanding policy priorities.
One year ago, with economic activity at a pandemic-induced standstill, elected officials were contemplating what sorts of austerity measures would be needed to offset the massive decline projected for state revenues.
A series of federal coronavirus relief packages have since pumped more than $7 billion into the Vermont economy. And the record-high budget approved by lawmakers Friday includes unprecedented increases for programs and services across state government.
“We’ve moved from what has been through most of my career a feeling of scarcity, to a place where it’s almost a New Deal kind of a moment,” said Gus Seelig, executive director of the Vermont Housing and Conservation Board.
The $190 million set aside for affordable housing initiatives by lawmakers this year is without precedent, according to Seelig.
And lawmakers had the capacity for game-changing investments in broadband, climate change and water quality as well.
Republican Gov. Phil Scott thanked Democratic leaders in the Legislature Friday for their work this year, and said the priorities outlined in their budget mirror his own. The budget won unanimous support in both chambers of the Legislature.
“In January … I said if we work together and put politics and partisan agendas aside, we can pass a budget that could truly transform the future, and set us on a path that supports all Vermonters in every corner of the state,” Scott said. “My friends, we’ve done that ... And we’ve once again shown America what elected leaders can achieve when elected leaders have the courage to put progress ahead of politics.”
Lawmakers’ work this session wasn’t limited to fiscal matters and coronavirus mitigation strategies. They approved legislation that:
- makes voting by mail permanent for general elections
- prohibits sex offenders from using a person’s sexual orientation or gender identity as a legal defense
- eliminates the statute of limitations for child sexual assault
- declares racism a public health emergency
- creates a new oversight entity to address racial disparities in the health care system
- and makes it illegal to engage in sexual activity with someone who’s impaired by drugs or alcohol.
Senate President Becca Balint said the backdrop of the pandemic has cast a pall over lawmakers’ work.
“Today, like my colleagues, I know I’m thinking about all the families across Vermont who have lost a loved one from the virus, or from other terrible affliction, and they didn’t have time to grieve,” Balint said. “Dealing with grief and loss during this pandemic in this time of social distancing has been incredibly cruel.”
More from VPR: COVID-19 Killed More Than 200 Vermonters
Franklin County Sen. Randy Brock said the remote nature of the 2021 legislative session has also cost lawmakers the camaraderie that comes with Statehouse lunches and hallways chats.
But with vaccination rates on the rise in Vermont, and a July 4 target for lifting all COVID-19 restrictions, Brock said he’s looking forward to seeing colleagues in person in Montpelier in 2022.
“We’ll be back next season,” Brock said. “And this time, we’ll be back live and in person and better than ever.”
Scroll down to read about the major issues Vermont lawmakers tackled during the 2021 session.
Broadband
State officials estimate that 60,000 Vermont addresses still don’t have access to high-speed internet service. And Dover Rep. Laura Sibilia said broadband deserts have become a drag on rural economies.
“We are in this digital revolution, and we have been in it for many decades, and what we have seen are major parts of America and Vermont being left behind,” Sibilia said.
Lawmakers will try to rectify those digital inequities by appropriating $150 million next year to broadband buildout projects across the state.
The Legislature has created a new Community Broadband Board at the Department of Public Service to administer the funds. Chittenden County Sen. Chris Pearson said elected officials are using public funds to deliver services that the private-sector telecommunications industry has not.
“Basically you have chunks of the state that the for-profit companies, internet providers, have decided not to reach,” Pearson said. “When you have to answer to your shareholders, you are depending on a certain number of customers per mile, and the more rural parts of our state simply don’t deliver that.”
Money being set aside by lawmakers will go to Communications Union Districts (CUDs) — municipalities that have banded together to devise regional broadband plans.
Sibilia say plans submitted by CUDs will have to guarantee that broadband will be deployed to every address within their borders in order to be eligible for grants. She said most CUDs will partner existing internet service providers to actually connect homes and businesses.
“Many of them have completed their planning and their engineering and are now looking for partners: for internet service providers, or to partner with their local telecom company or cable company,” Sibilia said.
According to Sibilia, CUDs have indicated they’ll be able to connect as many as 7,000 new addresses to broadband by next summer, once they have the funding to finance upfront connection costs.
And Pearson said lawmakers have committed to spending an additional $100 million on broadband within the next three years, in addition to the $150 million in this year’s spending plan.
“We’re already blowing the scale in a very promising way to meaningfully address the challenge,” he said.
Pensions
On Jan. 15, Vermont Treasurer Beth Pearce issued a report that would alter the trajectory of the 2021 legislative session: The rising cost of retirement benefits for teachers and state employees, coupled with dim investment projections for the state’s $4.6 billion pension fund, were threatening the solvency of the system.
And Pearce said lawmakers needed to act swiftly by increasing employees’ contributions, and making what she admitted would be “painful” cuts to benefits for future retirees.
More from VPR: State Treasurer Seeks 'Painful' Cuts To Retirement Benefits For Government Workers
Democratic leaders in the House spent weeks huddled behind closed doors to contemplate a response. And in late March, they emerged with a proposal that largely heeded Pearce’s advice.
After a groundswell of fierce opposition from the unions that represent teachers and state employees, however, House Speaker Jill Krowinski abruptly shelved that plan. And this week, House and Senate lawmakers finalized agreement on a piece of legislation that asks a 12-member task force to devise a grand pension solution over the summer.
“At the end of the day, it’s all just a math problem: Is the money that employer and employee are putting into the system, plus the returns that we get on investment, enough to pay for the pension benefit going forward?” Bradford Rep. Sarah Copeland-Hanzas said recently.
The task force, whose voting members consist of five lawmakers, one administration official and six union representatives, will return in January with a set of recommendations for lawmakers to consider next year.
But Pearce said this week that the pension system’s $3 billion “unfunded liability” — the gap between future pension obligations, and the money that’s projected to be available to pay them out — will only grow in the meantime.
Under the current benefit-contribution framework, she said, Vermont will have to pay an additional $97 million annually in order to prevent the pension fund from going in the red.
“And those dollars can be used for social service needs, those dollars can be used in a more efficient way to address the needs of our state, the needs of our employees at the same time, and the needs of the taxpayers,” Pearce said. “We are very concerned, the Treasurer’s office is very concerned, that this issue was not fully addressed this year.”
More from Brave Little State: What's Going On With Vermont's Pensions?
Pearce said the pension dilemma has already been the subject of numerous studies, many of which she conducted — and she questions the benefit of deferring action until 2022.
“If you lack the will to deal with it this year, I’m not sure why you believe you would have the will to do it in the next,” Pearce said.
In the meantime, lawmakers have allocated $150 million as a one-time payment to pay down the unfunded liability. The summer task force will recommend how and when to deploy those funds.
Lawmakers have also reconfigured oversight of the committee that manages pension fund investments.
Climate
Last year, the Legislature enacted a landmark law that will require Vermont to reduce its carbon emissions. This year, environmental advocates say, lawmakers are appropriating unprecedented financial resources to help the state hit those emission-reduction mandates.
“The Legislature and the governor have sent a very clear signal in their commitment to climate this session in a way that sets the foundation for success in implementation of the Global Warming Solutions Act,” said Johanna Miller, energy and climate program director at Vermont Natural Resources Council.
The Global Warming Solutions Act mandates emission reductions, from 2005 levels, of 26% by 2025, and reductions of 40% by 2030.
A long list of line items in the state budget and transportation bills will appropriate $50 million for climate initiatives over the next fiscal year. Ben Walsh, with the Vermont Public Interest Research Group, says lawmakers and the governor have committed to spending another $200 million on emission-reduction efforts in the following two fiscal years.
“The fact that both the governor and the Legislature are making clear that this $250 million level is a foundation that they intend to build on, that gives me some real hope that we will be meeting these targets come 2025 and 2030,” Walsh said.
More from VPR: Vermont Legislators Discuss Newest Climate Change Bill
This year’s spending package includes $20 million for weatherization for low- and moderate-income Vermonters. Miller says the Legislature has created a new partnership with the Vermont Housing and Finance Agency, to come up with financing strategies that stretch those allocations further.
Lawmakers have allocated another $20 million to the state’s Clean Energy Development Fund. Walsh said that money will be used to “help Vermonters go renewable” with projects such as community solar arrays that renters could buy into, or subsidies for advanced wood heating systems.
Lawmakers are also using $5 million to push more Vermonters into electric vehicles. The money includes $3 million for EV incentives for low- and moderate-income Vermonters. Lawmakers have also set aside $1.5 million for a program called “Replace Your Ride,” in which residents will be able to trade in their older, low-mileage vehicles for $3,000 vouchers toward the purchase of high-efficiency vehicles.
Housing
In January of 2020, a survey by the U.S. Department of Housing and Urban Development indicated that 1,200 Vermonters were experiencing homelessness. Less than a year later, more than 1,900 Vermont households, representing 2,500 individuals, were being put up in emergency housing in motels.
Gus Seelig, executive director of the Vermont Housing and Conservation Board, said this week that the precipitous jump “spoke to just how many people had lost their housing.”
“And the pandemic exposed for Vermont just how fragile life was when it came to housing for folks,” Seelig said.
More from VPR: 'Bringing Urgency To Homelessness': Grants Help Landlords Rehab, Rent Housing
The budget approved by Vermont lawmakers Friday includes $190 million for housing projects. Waterbury Rep. Tom Stevens said Friday that money will go toward emergency housing for people in homelessness shelters as well as single-family dwellings and apartment units for moderate-income Vermonters who’ve been priced out of homeownership.
“It’s incredible the amount of money that is needed, and it’s an incredible amount of money that’s going to be available,” Stevens said. “A pandemic is a once-in-a-lifetime thing hopefully, and this response to it is once in a lifetime.”
Seelig said the state funding will help relieve the shortage of housing stock that’s largely responsible for climbing prices. And he said the infusion will expedite projects that might have otherwise taken years to construct.
“What the Legislature is going to do is prime the imagination of developers both non-profit and for-profit around the state, to bring forth ideas about what kinds of projects can be funded and be put into production over the next three years,” he said.
State colleges
In April of last year, then-Vermont State Colleges Chancellor Jeb Spaulding shook the higher education community when he recommended the closure of the Northern Vermont University campus in Johnson, and the Vermont Technical College campus in Randolph.
Longstanding structural deficits in the Vermont State College system has been compounded by the coronavirus pandemic, Spaulding said. And preserving the future of the system required immediate cost-cutting measures.
“We cannot wait and hope for recovery, we must act decisively to chart a course toward long-term viability,” Spaulding said at the time.
The proposal elicited outcry from communities that would be affected by the closures, and lawmakers and Gov. Phil Scott responded by allocating $36 million in emergency funding to keep all campuses in place.
The budget approved by lawmakers Friday includes nearly $100 million in additional funds to put the state college system on a glide path to viability.
“I think it’s a huge vote of confidence in the Vermont State College System and our future moving forward,” now-VSC Chancellor Sophie Zdatny said this week.
The money includes another $21 million in “bridge funding,” to zero out projected revenue shortfalls this year. It also includes $20 million in “transformation” funds, to be expended over the next five years, to facilitate the consolidation of three state colleges — Northern Vermont University, Castleton University and Vermont Technical College — into a unified institution.
The proposed consolidation plans calls for all three campuses to remain in place.
More from VPR: Castleton Grapples With What College Merger Might Mean For Community
Lawmakers are also allocating $12.4 million for student scholarships, “which will really help support affordability for students, encourage students to enroll in programs that are really important to the state and to workforce development,” Zdatny said.
And lawmakers have also increased annual base funding for the college system by nearly 20%, from $30.5 million every year to $35.5 million annually, in perpetuity.
“It means that we can start planning, looking ahead. You can sort of count on that money rather than wondering every year what you’re going to get,” Zdatny said. “Without that state support, the bulk of the costs for running the system fall on our students, and we’re already a very expensive system, because of the historic low support we’ve gotten from the state.”
Zdatny said state colleges will need yet more support from the state in order to preserve the future of the system.
A special committee appointed by lawmakers earlier this year calls for an increase in annual base funding to $47.5 million. Zdatny says state college officials will be asking lawmakers to inch closer to that figure in coming budget years.
Child care
Support for more public investment in child care has been gaining momentum in Montpelier for years.
But the coronavirus pandemic pushed the issue to the top of the legislative agenda for elected officials of all political stripes this year.
Legislation approved by lawmakers in the final days of the 2021 session includes $5.5 million for the Child Care Financial Assistance Program.
“Literally it means Vermont families will pay less out of pocket for child care, more families will be eligible for financial assistance for child care, and programs will receive higher reimbursement rates for this essential work,” Aly Richards, CEO of Let’s Grow Kids, said recently.
The bill also allocates $2.5 million for loan repayment and scholarships for early childhood educators.
“We need support today to allow folks to stay in the job that they love and have trained for,” Richards said. “And we need resources for more early educators to be able to access this field. We have a huge shortage."
More from VPR: Poll: Vermonters Support More State Funding For Child Care
But the keystone of this year’s child care bill, according to Richards, is a promise, now enshrined in statute, that stipulates no Vermont family will have pay more than 10% of its household income for child care, no matter how many children they have.
The provision gives elected officials until 2026 to fulfill that pledge. And to find the money to pay for it: A 2016 report estimated Vermont would have to come up with an additional $300 million or so annually to ensure every Vermont family had access to “affordable” and “high quality” child care.
Richards says she’s confident elected officials will meet the challenge.
“This is new territory for us, and Vermont is ready. Vermont has a plan,” she said. “It’s not just an idea — this is happening. This is the start of it all. This is the beginning of our lives getting better.”
Have questions, comments or tips? Send us a message or get in touch with reporter Peter Hirschfeld @PeteHirschfeld.
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