Legislative Update - Feb 7, 2021

This is it! Our first legislative update of the year.


The Administration is pushing a proposal to consolidate the oversight of Pre-K into the Agency of Education (AOE). This comes after years of struggling with dual oversight between AOE and the Agency of Human Services. The new plan would streamline oversight and remove some duplicity between the two agencies.

The Senate Education Committee was briefed this week on the school choice policy impacts of Espinoza v. Montana where the supreme court last year determined that religious schools could not be excluded from public tuitioning dollars under federal law. There is another layer in Vermont because our state constitution structures separation of church and state differently than the federal constitution, however AOE has issued guidance to tuitioning districts in Vermont that they can pay tuition to religious schools so long as that tuition doesn't pay for religious activities. There is another pending lawsuit that is likely to determine how the state constitution will apply to this situation but it does appear that religious schools are likely to start receiving public tuition dollars in the near future.

The perennial push from teachers unions to move towards a income-based property tax system is already underfoot, however no specific proposal has emerged yet. The thinking here is that income is a better indicator of ability to pay, however there are issues with this because you are likely to increase taxes on retirees on fixed incomes. Additionally, this will not reduce overall spending and two-thirds of taxpayers pay based on income under the current system as it is. Energy might be better spent focusing on addressing spending challenges.

To that end, a proposal that has been gaining traction over the past couple years to re-adjust the weighting factors that determine local property tax rates looks to have real teeth this year. The proposal is based on a scientific study from UVM on how to best distribute state funds. It proposes getting rid of flat block-grants and moving to weighting factors that can scale based off of things like the population density and poverty rate of a school district. We would like to see some more analysis on what this would mean for specific school districts, but the idea has promise. As changes of this scale usually do, we think this is likely to take two years to pass through the legislature.


Economic Development

The legislature is still grappling with what was spent of the federal Coronavirus Relief Act monies and what we got for it. This process is likely to take the first half of the legislative session. Legislators are hoping for another round of federal funding, but there is little consensus on where they would put it if they did. Certain industries have been severely impacted and getting them meaningful relief has been a challenge. There is currently only one proposal on the table, called the Economic Solutions Act, that seems to overlap a fair amount with existing programs.

The one area there is any amount of clarity is on broadband buildout. The state spent nearly $3k on average per house on fiber buildouts in the Fall. Granted this was all federal dollars, but that seems like a steep price tag. Even if this is critical infrastructure. Another challenge facing rural providers is that even when fiber is available, most consumers choose internet packages with speeds that could be achieved via copper wire. This leaves providers maintaining infrastructure without revenues to cover it. No solution for this particular issue has been identified yet, but lawmakers are gravitating towards setting up a central funding source that regional stakeholders could tap into for capital investments.

Campaign for Vermont is following this issue closely because we view broadband as essential to the economic future of our state. Particularly, in a post-Covid world.


Fiscal Responsibility

We have been long-term advocates for addressing Vermont's pension deficit. State leaders are finally onboard and the Treasurer has pitched a plan to start addressing the issue. She testified in both the House and Senate over the past two weeks and the Legislature is considering options for moving forward. House Speaker, Jill Krowinski, has asked the legislature to put "all options" on the table so they can be sorted and evaluated.

Teacher and state employee unions have proposed raising income taxes on Vermont's top income earners to pay for the pension shortfalls. Understandably, they are trying to avoid their members having to pay higher contributions or receive less benefits from the system as the Treasurer's plan would do.


Government Accountability

After getting cut short last year, reforms to the state ethics commission are moving forward again. The House Government Operations Committee advanced a bill this week that would make changes to the commission to support their operations. However, we view these changes as nibbling around the edges as they opted to not take up the more important state code of ethics that the commission had drafted. Larry Novins (Executive Director of the Ethics Commission) had asked the Committee to codify the code into law. They chose to pass.

Also underway down the (virtual) stairs in Senate Government Operations are efforts to expand universal mail-in voting as a normal feature of our elections process. The committee is wading through over nearly three dozen proposals so there will be more to come on this one for sure. We support the opportunity to expand access to voting, however we need to make sure that local elections officials have the resources to support this type of voting at the scale we are talking about here. Mailed ballots take much longer to process than an in-person ballot and there is reason to be concerned that a town clerk could become overwhelmed. The November election also revealed that we have much work to do in order to clean up our voter checklists so this should be a component of the rollout plan as well.

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