Report from Montpelier

Kate Webb
Jessica Brumsted

This report was submitted by six area Democratic state representatives: Jessica Brumsted and Kate Webb, Shelburne; Mike Yantachka, Charlotte; Bill Lippert, Hinesburg; and Terry Macaig and Jim McCullough, Williston.

The Legislature met last week in a veto session to address the statewide budget and education property tax bills.

Although these bills are essential to fund state government and our schools, the governor believed that the Legislature had forgone an opportunity to garner savings resulting from statewide changes in health insurance coverage for school employees, and vetoed them. The veto forced the Legislature to go back into session to avoid a government shutdown.

By the time senators and representatives returned to the Statehouse on June 21, much negotiating had already taken place among House Speaker Mitzi Johnson, Senate President Pro Temp Tim Ashe, and Gov. Phil Scott’s staff. After negotiations stalled, Gov. Scott joined the negotiations on the last day prior to the veto session. An agreement was reached and a new bill combining the budget and property tax language passed on a voice vote in both the House and the Senate.

While no one was particularly happy with the result, no one felt essential values had been compromised. So what does this mean?

First, the statewide property tax rate for residential property-tax payers will decrease by two cents per $100 of property value as passed in May, while the nonresidential rate will remain at last year’s rate of $1.535 per $100 of value.

Second, a greater share of the statewide sales tax will be used to offset the cost of education. Only minor technical changes were made to the budget, which had originally passed the House and Senate with a single dissenting vote. This was the easy part.

The challenge came in addressing the issue of health insurance for school employees. Democratic leadership believed that savings were already built into the new plans, and these savings were best accounted for at the local level. In contrast, the governor believed that more savings could be obtained if these policies were negotiated at the state rather than local level, identifying savings if all schools negotiated an 80-20 premium split, with teachers paying $400 per person toward out-of-pocket costs.

The compromise reached by Democratic leaders and the governor retains bargaining for the health insurance contracts at the local level, but withholds $13 million from schools for fiscal year 2018—which covers the same period as the 2017-18 school year—thereby requiring schools to reduce spending accordingly, preferably through negotiations over health insurance benefits. It requires each school district to achieve savings in health insurance in the amount that would have been saved in fiscal 2018 if Scott’s 80/20 benefit plan had been implemented starting in January, when the new plans go into effect.

The bill also creates a nine-member commission to study whether the state should implement a statewide teacher health insurance benefit, a provision that was included in the vetoed property tax bill. This panel will “determine whether and how to establish a single statewide health benefit plan for all teachers, administrators, and other employees of supervisory unions and school districts.”

What is the impact on our Champlain Valley School District? The exact benchmarks the district will be required to achieve will not be determined until mid-August. Nonetheless, it appears that significant savings have already been achieved in the recently settled teachers’ contract and it is likely that savings will also be achieved for support staff.

Interestingly, while support staff on current individual plans pay only 10 percent of health care premiums, staff with family plans paid 40 percent. Shifting to 20 percent on lower premiums for family plans should result in significant savings to these essential employees. Other districts may not be so lucky.

Also in this additional session, the House and Senate passed nearly identical resolutions strongly opposing the announced U.S. withdrawal from the Paris Climate Agreement and recognizing Gov. Scott for enrolling Vermont in the U.S. Climate Alliance. We were all pleased to support this timely resolution.

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