This week saw positive progress on a number of fronts. After looking like it was unraveling last week, a new draft of S.171 (the ethics bill) on Friday showed positive developments. Workforce and economic development bills are also taking shape and are looking promising.

 

Quote of the Week: “I've gotten tons of emails about passing a Code of Ethics that applies to everyone. I don't think we have any concerns about having everyone act ethically... If the professional code of conduct (which governs judicial employees) does not imply that public officials shouldn't personally benefit from their position, then there's something wrong.” -Senator Jeanette White
		Message of the Week: “We are relieved to see the positive direction that the Senate is moving in on S.171 and look forward to working with them to pass this bill.” - CFV President Pat McDonald

 

Workforce Development

The Department of Tourism & Marketing brought a proposal to the House Commerce Committee to spend $8.4M to help with workforce shortages. The program would run three years, supporting worker relocation support by providing resources to local leaders to help with recruitment and retention of new residents. The program would also help with targeted worker recruitment marketing that would cost $1.5M per year. One of the major goals of the program will be to recruit for high demand professions, like the trades, healthcare, and IT. According to the Department, there needs to be local resources to connect these people to jobs and housing. This would be run as a competitive grant program and could go to a wide variety of organizations that are interested in doing this work.

The Committee noted that this sounds like the Department is trying to do wrap-around services. They were particularly interested in how this effort could be targeted towards economically depressed parts of the state and to attract and retain college students and refugees. Young professional networks are one of the tools the Department uses to do this. They believe that giving regional partners tools to identify assets and market them to prospective residents gives those communities the ability to invest in Vermont.

The Department would like one extra staffer to manage grants, reporting, training, and best practices shared across regions. Potentially, they may also want funding for a chief marketing officer to coordinate outreach efforts. There was some skepticism among the Committee members about the possibility of success for this "organic" process.

 

The Committee took testimony on H.703 Wednesday, Thursday, and Friday this week. The Department of Labor is still making sense of the changes that Covid-19 has brought to the labor market. They emphasized that the State needs to stay forced on workforce expansion. There are five areas of concentration:

• Workforce expansion
• Workforce training
• Apprenticeships
• Vermont trades scholarship - a proposed $3M program administered by VSAC.
  • Must be enrolled in an industry training program that leads to employment in building, industrial, or medical trades.
  • Recipients must work in VT for one year after completion of training. There was discussion about adding a loan or claw-back provision if they break this promise.
• Vermont trade loan reimbursement program
  • A loan program that would issue annual $5k reimbursements for each year worked in state.
  • Can be used to pay down education debts.
  • There was discussion about how to prevent double-dipping with other scholarship and loan programs.

The Administrations wants to focus on worker relocation. There is high demand for employees in the trades and other sectors and they want to come at the issue from different angles by getting communities involved but also leveraging resources at the state level. According to the Department, we can't train our way out of the workforce shortage. Many employers would appreciate the state taking an active role in recruitment.

 

Another area that the Committee identified was nursing. One proposal would pay more money to nursing teachers and faculty or to increase the numbers of teachers and staff to boost educational capacity. Other ideas such as additional scholarships, loans, and mentorships were also discussed. Mental health workers are also under wage pressure because Medicaid reimbursement rates keep wages low. If there is too much pressure the state will need to subsidize mental health workers to make those jobs competitive on pay.

The Committee also looked at childcare. Options included providing tuition assistance and retention assistance. Many home providers have gotten out of the industry because of regulations and education requirements mandated by the Legislature that put up barriers for providers. Larger providers have been putting a lot of money and effort into worker retention. Committee members questioned what actual services Lets Grow Kids provided to child care centers apart from asking the state to pay more money to providers. She noted that the organization seems to spend way more money on advertising and lobbying then they do in providing services.

There was also interest in looking at workforce training inside of correctional facilities to ensure those classes actually are of value to employers.

 

Finally, the Committee asked relevant agencies to report on knowing who is benefiting from state workforce development efforts. The Committee wants to know if we are performing well for all citizens and the programs are accessible to people from all backgrounds. The current problem with tracking outcomes on state programs is the fact that we have such a small sample size to track the effectiveness of programs. They seem interested in putting data collection efforts into place along with standardized reporting requirements.

 

The House Education Committee covered H.377 on Tuesday, hearing from career counselor Jason Finley. He shared that much of his work is trying to match students to a wide range of jobs. There is a wide variety of tools, internships and job shadows that expose students to career opportunities. He supports the bill because he believes it will help enhance collaboration among career educators, CTEs, and traditional high schools. He also supports having Advance Vermont lead these efforts. He has worked with the organization and feels their portal will be a huge asset to career counselors across the state. He highlighted the fact that this portal will be important to help correct some of the structural imbalances in the Vermont workforce.

He noted that women who work with career counselors have 21% percent higher wages after having career education than the women that did not. A DC Policy Center study showed that students with associate degrees and career education earn as much as students with bachelor's degrees. Career education also increases college enrollment by 92% with a 72% completion rate.

In his opinion, Advance Vermont has shown that it has the ability to build and maintain this infrastructure while engaging educators and employers to find meaningful employment for students. They have worked to identify gaps in job placement and have fostered collaboration. School counselors are overwhelmed at the moment and career guidance is falling through the cracks. He noted that everyone needs these tools to be accessible. These tools will help students save money and avoid wasting time going to college for degrees they don't want to get a job they could have gotten for less money.

 

Economic Development & Housing

The Senate Natural Resources Committee took up Act 250 reform (S.234) again on Tuesday, where legislative counsel provided a useful summary of the current draft.

A few key pieces that the new draft does:

• Allows neighborhood development areas in flood hazard areas as long as best practices are in places.
• Removes requirement for approved wastewater systems to be in place prior to the designation of a neighborhood development area.
• Requires municipalities to respond to Act 250 requests within 90 days or they are automatically granted.
• Forest fragmentation language is being added (although it is unclear what the final language will be).
• The infamous Road Rule (which is triggers Act 250 review over private roads) is in the bill currently and seems like it will remain. This is already drawing a veto threat from the Governor.
• Allocates ARPA funds to add more capacity to environmental court to handle an increase in permitting requests.

Maura Collins (Executive Director, Vermont Housing Finance Agency) testified in support of Priority Housing Projects (PHPs) being exempt from the traditional Act 250 process. A 2017 report estimates that this saves $33,000 per project in development costs.

She reminded the Committee that they have been trying to amend the affordable housing threshold criteria for several years now but it keeps getting lumped in with Act 250 bills that never pass. They want to untether the thresholds from statute and instead use 120% of area median income (AMI) to determine which new construction should qualify. This acknowledges regional differences and better meets homebuyers where they are based on need. The numbers would also update automatically every year which avoids the legislature from having to come back to this so frequently.

The 120% threshold is being considered because construction and permitting costs still make modest homes out of reach for this group of people. The idea behind these provisions are essentially that the state is offering a form of financial aid through foregone permitting costs. The example given was that the cost of a house considered affordable for a family at 120% of AMI would be reduced by roughly $64k through this expedited permitting process.

Some members of the Committee reiterated that they do not see the Act 250 process as a hindrance or as cost prohibitive, but rather greatly beneficial and important. Part of the issue is the delay waiting for ancillary permits, so they questioned whether it is actually Act 250 that holds up the process or it's how different processes interact.

Some private citizens questioned the need for an exemption for PHP's or any other project or to succeed any authority to municipalities. The main point of feedback was the ability for individuals to intervene in the Act 250 process is paramount. Questions were also raised about the necessity of having flood insurance for any projects built in a flood hazard area.

Chairman Bray suggested the ability to look at a project in its totality and that is why Act 250 is messy and also why it works well, he is hesitant to give away too much of that.

The Agency of Natural Resources (ANR) reiterated their statements from last week that the Administration does not view this bill as a comprehensive approach to modernizing Act 250. Sabina Haskell (Chair, Natural Resources Board) added they are focused on ARPA funded projects and what we can do to facilitate housing as a priority development. In particular, neither ANR or the Natural Resources Board can support the Road Rule.

The Vermont Natural Resources Council (VNRC) was adamant about the inclusion of a Road Rule and is frustrated by the Administration's stance on the bill. It seems that the Committee is likely to support the Road Rule, but possible exempt driveways from it. Bray, in particular, believes that long driveways are rare and exceptional and questioned the need to trigger review. VNRC believes that these are more common in "rich resort towns" and even if somewhat rare, they have impacts nonetheless. In theory, including them would encourage more "avoidance than permitting" here as people redesign to avoid the lengthy drives and thereby results in more compact development. Senator Westman pointed out that there are other ways of incentivizing compact development and avoiding runoff issues from driveways or roads, some of them were addressed in last year's water quality bill.

The Committee is very divided on the overall direction of this bill. Always colorful, Senator MacDonald is adamant that none of this matters if "tenants can be kicked out before their kids graduate from high school" - referring to the 15-year no cause eviction process. Of course, the housing sections of this bill are primarily focused on home ownership, rather than renting. Senator McCormack is frustrated that the Administration has "walked away from the table", so now the Committee keeps giving away more and more (debatable) and the Administration won't meet them halfway. He wants to keep the forest protections and replace all the exemptions with "an expedited Act 250 process."

 

The Committee came back to this on Friday. There was debate about protecting this new housing stock from urban refugees who purchased all the available housing stock at the start of the pandemic. The Committee seemed to settle around limiting Act 250 exemptions for PHP's with ARPA funding and looking to see if there was a mechanism to keep the new housing stock affordable for a period of longer than 15 years. This proposal would also include a sunset provision so the legislature can re-evaluate in 2027 after the ARPA funds have expired. Bray shared that he had been warned by leadership to tread lightly on housing because it's a priority for the Senate and there are multiple pieces to the puzzle being worked on.

Areas of contention still seem to be around how the forest block language should be worded because the current language (originally from H.926) has already been vetoed by the Governor. The Committee voted to keep a Road Rule in the bill with a trigger for an 800 foot road (or driveway) or above 2,000 feet in elevation. There was also some disagreement about language relating to state owned airports built on prime agricultural soils.

There is still an open question about the validity of using ARPA funds to expand environmental court capacity. The Committee will take further testimony on this.

 

Housing

The Senate Economic Development Committee did a walk-through of S.226 (affordable housing) on Wednesday. Similar to H.511 and S.234, the bill would redefine requirements for Neighborhood Designated Areas (NDAs) and towns would be allowed to file jointly for designation and could encompass flood hazard areas. The new requirements would also except NDA's from needing pre-existing water and sewer infrastructure. These steps are meant to promote infill development and encourage downtown density.

NDA's allows for four units per acre for all dwelling types. There was also language added that state and municipal permits have a minimum life of two years. This is to simplify the building process. It was also noted that Priority Housing Projects (PHPs) would be exempt from Act 250 review. There was some discussion about also exempting building materials from sales and use taxes for PHPs.

 

Good Government

The Senate Government Operations Committee came back to S.171 on Friday - the bill that would create a statewide Code of Ethics. After a week of angst, CFV and other advocates where relieved to see a new draft of the bill that would apply the Code of Ethics to all three branches of state government. The re-write made several sections clearer to understand and re-arranged some sections to make it easier to follow. We are still reviewing the bill in detail to understand how some of the sections would apply in practice but the provisions that exempted the legislative and judicial branches were removed. Additional language was added in a few places to assuage fears about impacts to lawyers and post-employment restrictions for state employees.

The major substantive change was around the recusal process in the event of a conflict of interest. Under the new draft all three branches would adhere to the same definition of conflict of interest, but the recusal process may differ based on the agency or department's code of conduct.

The Committee plans to come back to this issue on Wednesday and we look forward to working with them to pass this bill.

 

Education

The House Commerce Committee met on Tuesday to hear from Joan Goldstein (Commissioner, Department of Economic Development). It's clear that jobs are not the issue in the current market - it's finding workers who have the requisite skills (workers market). They are asking for a grant to allow 11.5 navigators who will work with employers to get jobs filled. The funding is in the Budget adjustment act so there is no immediate question before the Committee on this topic.

However, Chairman Marcotte said they want to see how this program intersects with other legislation they are working on. For example, H.703 contemplates the Department of Labor having 6 additional navigators. In this particular case, they would work with different regional employers and resources in area agencies.

Goldstein emphasized that these navigators would not overlap with the ones in the budget adjustment, but rather they would enhance the available resources and will focus on manufacturing, health care, technology, and construction. Perhaps they might even expand to forestry and agriculture as funding allows.

Because this is a workers' market, the navigators would work with employers to make sure they have a strong culture and benefits. This is about the state helping employers get what they need (workers) by creating better places to work, increasing employee happiness, promotion opportunities, etc.

 

The House Commerce and House Education Committees met jointly on Thursday to hear a presentation from the Education Commission of the States (ECS) around funding approaches for Career and Technical Education (CTE). The organization offers research, reporting, counsel to policy makers. Secondary CTE is offered in high schools, postsecondary institutions and tech centers in various states. There are a variety of funding approaches: unit-based, student-based, cost-based, and some alternative approaches.

• Student-based: funds are distributed to districts based on the number of CTE students enrolled.
  • Advantages: transparency, flexibility and portability.
  • Challenges: oversight.
• Unit-based: distribution of funds based on a set of educational inputs.
  • Advantages: oversight and uniformity.
  • Challenges: rigid.
• Cost-based: funds distributed to cover cost of providing CTE services based on the prior academic year.
  • Advantages: financial tracking and it protects districts against cost liabilities.
  • Challenges: administratively complex, may encourage over-spending.
• Direct Funding: districts use funds from the state aid allocations to support CTE centers.
  • Advantages: economies of scale and staffing.
  • Challenges: transportation and cost sharing.

Additional funding sources include Perkins funds, state grants, and local funds. Some policy considerations they highlighted are that students in different districts may have varying needs and the type of student may also be a cost driver. Additionally, the cost of transportation and program costs are an issue to be aware of.

 

The House Education Committee came back to H.483 (the CTE bill) the next day. The clear goal laid out in the bill is to hit a 2025 target for having 70% of working-age Vermonters holding a credential of value. The bill will allocate $180k for the Agency of Education to complete a thorough review of the existing funding and governance structures for CTE and make recommendations.

The report will be due March, 2023 and will seek to recommend ways to strengthen the connection between the CTE curriculum and Vermont’s workforce requirements.

 

The House Education Committee also reviewed draft language this week around allowing school districts to withdraw from a Unified Union School District (Act 46 merged district). The bill would allow a withdrawal study committee to be formed if five percent of voters in a town sign a petition. The study committee would determine whether or not to bring a recommendation back to voters regarding withdrawing from the Unified Union District and how to do it.

The State Board of Education (SBE) would review the proposal and issue an advisory opinion on whether or not the "divorce" can proceed. The district can overrule an SBE advisory opinion, however they must demonstrate ability to provide supervisory union services (like special education and facility maintenance) to the district. The town must hold a public vote in favor of withdrawing that gains a majority in favor.

While we haven't reviewed it closely, this bill appears to be a positive step away from the current uncertainty about school governance jurisdiction and the role of the SBE in interfering with school governance.

 

The Senate Finance Committee heard from Dan French (Secretary, Agency of Education) on Wednesday about the student weighting formula changes. The most recent draft of the bill moves towards the cost equity payment (block grant) model and also includes universal school meals. Determination for income weighting would be done through a declaration form that each family would be required to fill out instead of the traditional free-or-reduced lunch application which has long been believed to under-report poverty rates.

However, French asked the Committee for more staff to handle this new application process (the State Auditor also expressed concern). The transition to the new model is also important, doing it in one year may be traumatic to local districts. Also, he doesn't think we can say 'oh these weights are good’ just yet. We need to view the entire picture once decisions are made and the structure starts to take form.

Chairwoman Cummings questioned how we know that all/any of the changes and data requirements will actually benefit the students in the end. Most involved think that it would, but the link is not always direct because what you are doing is giving districts tools to help students - we can't force them to be used.

The Committee may pass a bill (even if it's not perfect) to keep the ball rolling and to avoid delaying another year. It also seems like the Agency of Education may be more involved in local district operations going forward through a quality improvement process.

 

Health Care

Last week, the Green Mountain Care Board (GMCB) presented their findings on Hospital Sustainability in Vermont to the Legislature. The report has been in the works since 2019 and both the work and outcome have been impacted by the pandemic.

Jessica Holmes (Board Member, GMCB) lead the testimony. She stated that “if we want to improve Vermont’s health and make health care affordable, we need to completely change how we pay for health care and we need to update our delivery system, to ensure maximum access and quality and minimize cost." A significant payment and delivery reform will require resources, time and “frankly” the leadership and courage to overcome the inevitable resistance to change. She is concerned that health care is not affordable for many families and there is limited access to primary care, dental care and essential services. She also emphasized that the mental health care system does not come close to meeting the needs of Vermonters.

Hospitals are struggling financially, which is requiring some of them to reduce essential services (often Pediatrics) with devastating results. Public payers are not keeping pace with inflation and “increasingly relying on commercial rates to cover rising costs is no longer a viable strategy-even if the board approved higher and higher commercial rates for hospitals." There are just not enough Vermonters to afford those rate increases. Holmes is concerned that if we don’t change course and soon, we will see more uninsured and underinsured, more fee debt and charity care, and employers reducing health benefits.

Global Payments (the ACO model) will ensure that hospitals have predictable revenue streams that cover the cost of delivering high value services in their communities. Hospitals will no longer have to “chase” fee for service volume and offer low value services to “stay afloat.” They will be able to redirect scarce resources to those services that have the greatest impact on Vermonter’s health (hopefully primary care and mental health). The incentive will be to keep patients healthy and out of the hospital. In essence, the GMCB is doubling-down on the ACO payment delivery model.

She also recommended exploring new federal designations like “Rural Emergency Hospitals” and “Freestanding Emergency Departments” that might better meet the needs of communities who, post COVID, may face a return to high costs and excess capacity, especially those in close proximity to other full-service hospitals. New delivery models, such as Hospital at Home where acute patients can receive care at home but stay connected with a hospital care team through in-person and video visits and continuous biometric monitoring, may be cheaper, safer, and more comfortable for patients. A McKinsey report projects that $265B of Medicare services will be delivered in the home by 2025, which would have a significant financial impact on hospitals.

 

 

Things to watch for next week:

Establishment of Strategic Goals and Reporting Requirements for Vermont State Colleges (H.456) - House Floor on Tuesday

Expanding Access to Affordable Housing (S.226) - Senate Economic Development every day

Changes to Act 250 (S.234) - Senate Natural Resources on Tuesday

Public Pensions and Post-Employment Benefits - Senate Government Operations on Tuesday

Act 46 Withdrawal Provision - House Education on Wednesday

Student Weighting Factors - Senate Finance on Wednesday

Statewide Code of Ethics (S.171) - Senate Government Operations on Wed and Fri

Green Mountain Care Board Responsibilities (H.498) - House Health Care on Thursday

 

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