Updated: Jan 23
It was a busy week in Montpelier. Committee work is in full swing as the money committees work on the Budget Adjustment Act (BAA), the Paid Family Leave bill has been re-introduced, we received the long-anticipated RAND report which put a price tag on child care, and we observed Homelessness Awareness Day on Thursday.
Budget Adjustment Act and Governor Scott’s Budget Address
Every year the legislature goes through a budget adjustment process. As we learn the actual revenues generated, we make adjustments to the budget. During the Governor’s Budget Address on Friday, he proposed a $8.4 Billion budget; which increased from the previous by $20 million.
The Governor referred to forecasts by economists that tough times are ahead. Below is an excerpt from VTDigger's write-up of the proposal.
“That’s despite “stellar” revenues recorded this year, as reported by state economists earlier this week, spurred in large part by an “epic, unprecedented, off-the-charts” influx of federal cash to the state in the past three years. Not only was the state able to spend those dollars, but Greshin said on Friday that federal investments also acted as a stimulus, boosting state income, sales and property tax revenues.
But state economists on Tuesday also warned of rockier waters ahead, and Scott’s administration has seemingly heeded those calls for caution.
“We tried our best to live within our means, and to put in appropriations that are sustainable,” Greshin told reporters.
Namely, Scott said that he made a “firm commitment” to utilizing surplus funds for one-time spending, as opposed to creating new programs and therefore ongoing expenses.
“If we allow the base budget to grow with temporary and unsustainable revenue, we will create a cliff when these stimulus dollars go away — putting us on a path that eventually leads to deep and painful cuts,” Scott said.
This budget proposal and the Governor’s desire not to use surplus funds to create new programs is a sound approach in my estimation. It will be interesting to see how the Legislature responds.
As the liaison to the Appropriations Committee from the General & Housing Committee, I will be tracking the budget closely.
Child Care and RAND Report Update
The long anticipated RAND report was released early on in the week. The price tag outlined in the 117 page report places the cost of expanding child care subsidies at $179 million to $279 million. The report suggests the most viable options to pay for this program is with an additional 0.9% payroll tax, a two-percentage-point increase in the sales tax, a new limited services tax of 9.9%, or a new expanded services tax of 7.1%.
The Governor remains steadfast in not increasing taxes. The RAND report is a starting point in a very important conversion on how we fix our broken child care system.
The Legislature is gearing up to re-introduce their Paid Family Leave program; which guarantees “12 weeks of paid family and medical leave to all Vermont workers, including part-time and seasonal employees. The bill would provide paid time off in the event of the birth or adoption of a child, personal medical leave, and leave for people experiencing domestic violence or whose family member is called into active duty.” (Source: VTDigger.org)
This plan has been proposed twice, only failing last year by one vote. If passed, it would include a 0.58% payroll tax, split between the employer and employee. This program is mandatory.
We agree with Governor Scott’s suggestion of waiting to see how the voluntary paid leave program offered to Vermont state employees plays out -- and learn from it.
We have had many conversations with activists and lobbyists throughout the statehouse,
and on both sides of the political spectrum. The same question keeps presenting itself: “It’s one or the other. Vermonters can’t afford two new payroll taxes for child care and paid family leave.”
With 60 new members in the Vermont House of Representatives, it will be interesting to see how these two debates playout. If we are to make Vermont more affordable, is adding taxes on paychecks truly what’s in the best interest? This debate will continue throughout the session.
On Thursday, we spent time in the General & Housing Committee discussing homelessness. We heard testimony from many groups advocating for those experiencing homelessness, as well as individuals themselves. There are several programs funded federally supporting Vermonters experiencing homelessness that may be ending soon. I appreciated the perspective from those who testified as to the need to continue funding those programs. There will be more discussions on this over the next few weeks and months -- it is an impor
tant issue and I am committed to working on solutions.
House Update and Committee Update
Three weeks into the legislative session, 83 House Bills have been introduced and sent to committee.
In the General & Housing Committee, we have two bills currently in our committee. We will be doing a walk-through of both this week. The two bills are: H. 21 - An act relating to landlord notice of utility disconnections and H. 66 - An act relating to paid family and medical leave insurance. H.66 was introduced by nearly every member of the Democrat and Progressive Party Caucuses and “proposes to create the 6 Family and Medical Leave Insurance Program within the Office of the 7 Treasurer, to amend the Parental and Family Leave Act, and to provide job protected leave from employment for reasons related to domestic and sexual 9 violence.”.