There was progress on several fronts this week with the ethics bill moving to the Senate Floor and the workforce development bill appears to be ready to move by Wednesday.

A bill that steers the state towards divestment of fossil fuels from our public pension systems is also headed to the Senate Floor. This bill is concerning for several reasons, read more below!

 

Quote of the Week: “I do not think that Mr. Hoffer has the information available to arrive at the conclusions [about retooling ARPA funds] that he did. Unfortunately, we don't have the program documentation completed yet. His staff requested it, but we told them it was still in draft form... The conclusions in the memo are inaccurate, largely because of a lack of access to detail.” -Doug Farnham: Deputy Secretary, Agency of Administration
CFV President, Pat McDonald		Message of the Week: We are particularly concerned that the Senate is looking currently to divest from fossil fuels. Given the issues with the current underfunding in our pension system and the global instability in fuel prices. Now is not the time to have this discussion.

 

Fiscal Responsibility

On Tuesday the Senate Government Operations Committee reviewed a bill (S.251) that would push the state towards divesting from fossil fuel investments for state pension funds. This proposal stemmed from one of the recommendations of the Climate Action Plan.

Tom Golonka (Chair, Vermont Pension Investment Commission) supports the study but is worried that it was too prescriptive. There is a fiduciary component to this decision and only evaluating the environmental component could invite legal action and short-change our retirees. He believes that this is an issue that might be better solved through policy and not legislation. He invited the legislature to give them funds to hire a consultant to do an internal study this coming summer and gives the Commission some latitude with the outcome of the report.

There are also concerns that divestment might not be the right tool. Sometimes working directly as an investor with a company has more impact than divesting. An example of this could be some of the renewable energy investments that Exxon-Mobile has made over the past decade.

 

The Committee came back to this issue on Thursday with new language drafted by Golonka and State Treasurer Beth Pearce. The new draft would require that the Joint Public Pension Oversight Committee consult with the Treasurer, VPIC and others to develop a strategy and timeline for the state to decarbonize (not strictly divest) the investment policies of the three retirement systems. The Committee would consider the feasibility of different decarbonization strategies and review models used in other states and then report back in January 2023.

They discussed the new language and concept of divestiture. They particularly liked how New York handle it. However, VPIC already has a decarbonization policy under review and Golonka thinks that it might be able to fit in as a subset of a broader divestment policy.

Pearce was particularly concerned about fiduciary responsibility and the direction that the Committee and the bill was going. To determine that divestiture is the best strategy now is not the way to do it (i.e. do not set the agenda and outcome). She wants to let the Commission and consultants do their job in looking at the issue without a pre-determined outcome. Chairman White agreed that we need to do the right thing for the health and stability of the pension plans.

There was little additional discussion aside from three members of the Committee re-stating that they supported pursuing New York's approach to divestment, however they agreed to replace 'divestment' with 'decarbonize' where appropriate. They then allocated $75k for the study and voted 4-1 in favor of the bill on Friday.

 

Workforce Development

On Tuesday, the House Commerce Committee took up H.377 again, which would create a public-private partnership with Advance Vermont to increase postsecondary attainment. Heather Bouchey (Deputy Secretary, Agency of Education) shared that Advance Vermont is framed around laudable goals that match those of the Agency. She agreed that the state needs entities that champion these goals, including cultural brokers as well as communication materials, etc. Many of these areas do not fall within the purview of the Agency of Education (AOE) or the Department of Labor (DOL) but are important to get done.

However, AOE feels that this bill does not focus on the critical gaps and actually presents a risk to the efforts of the statewide workforce development board because of redundancy. They do not feel like we need another public-private partnership, and they are worried that too many resources would need to be assigned to assist this new group.

Sarah Buxton (Director of Workforce Development, DOL) also spoke in opposition to the bill.

1. The duties that would be assigned to this private organization are already assigned to state entities under federal and state law.
2. The contracting, policy implementation, monitoring, and enforcement responsibilities as described in the bill are inherently the work of government and should not become privatized activities.
3. The organization identified does not have the subject matter expertise to perform the work identified.
4. There are supposedly errors in the findings and in testimony and data presented to the Committee.

Essentially, Buxton feels "adding another ‘public-private partnership’ would not produce more or better outcomes and would cause greater inefficiency, confusion and delay.”

The appropriation to support the proposed work for Advance Vermont is $350k per year.

Campaign for Vermont has not reviewed this proposal from Advance Vermont or the existing programs in place, however we are generally supportive of the work that Advance Vermont is doing to expand the state's workforce and provide better access to credentialing programs.

 

The House Ways & Means Committee took testimony from Dan French (Secretary, Agency of Education) on the Administration's Career and Technical Education (CTE) proposal. French noted that CTE education will be critical for resolving Vermont's workforce problems. One program he highlighted was a revolving loan fund to rehab housing projects that CTE students could work on. This would both help restore properties, bringing more housing units online, and provide real world experience for students. The Administration wants $15M for this program.

The Administration would also like to see a $23M competitive grant program for CTE facility improvement. Another $5M would be used for job training in building trades, health care training, and development of new types of career pathways. The lack of workforce in these sectors is hampering the state's ability to meet demographic and economic challenges. French was also concerned that the rate of increased education spending might be problematic as federal dollars recede.

 

The House Commerce Committee reviewed a new draft of H.703 on Wednesday, dealing with workforce development. The new changes would add a $15M revolving loan fund for experiential learning in areas like building trades. These programs would focus teaching building skills be rehabbing existing structures to bring them into compliance with current housing codes so they can rejoin Vermont's housing stock. Contingencies were added to avoid funds from being used for project capital costs. These changes mirror the proposal that Secretary French presented to the Ways & Means Committee the day before.

Funds may be used for competitive student wages, instructor compensation, and summer seasonal costs. A portion of the proceeds from the sale of the property would be returned back into the revolving loan fund in order to keep the program going. There was some discussion about including mixed-use facilities such as community centers in the program as right now any project could only include housing. The Committee seems interesting in expanding the scope somewhat.

Some Tech Center administrators pushed back on this strategy because they felt that in-house simulated build sites were more efficient at training because of weather constraints, administration, transportation, and other limiting factors. Also, only 8 out of 15 tech centers have building programs and the ones that do seem to prefer to work on new construction. It is clear to CTE directors that demand is outpacing supply in other areas as well, such as for CDL, LNA, and Phlebotomy certifications.

It was also mentioned that students are eligible for VSAC advancement grants after graduation only. This means that they cannot be used towards CTE programs while still in high school. Some directors argued that these would be more efficiently offered pre-graduation. There was some interest from the Committee around this concept, but it will likely not make into this bill.

 

The Committee came back to this on Thursday, with testimony from CCV about dual-enrollment (DE) and whether that could be expanded to include CTE programs. There was resistance to this because DE was originally constructed for enhancing the college talent pipeline. They do not want to see the money for that program "diluted" by including other providers for these services. In response, the Committee seems to have decided to create a new grant program to fund credential programs through CTE centers. CTE program completion carries value towards certain attainments and endorsements for credentials of value. These may include certification hours, classroom and preparation for permits and licensures. One aspect mentioned specifically was covering the costs related to the testing required for many licensure programs.

Other sections of the bill now include:

• $3.5M for creating two separate internship information management systems to collect data about the intern and externships that the Department of Labor (DOL) administers and another for data on our healthcare workforce.
• Six new regional program coordinators for DOL at a cost of $3M.
• $15M for rehab and construction of facilities for CTE's to enhance and expand programming.
• $4M for the expansion of facilities and equipment for nursing programs.
• $11M to UVM, state colleges, and DOL to expand capacity for nursing programs. Another $3M to employers to expand workforce pipeline collaboration with educational facilities.
• $8M for incentives to retain college students after graduation and another $2M for refugees.
• A new program offering $5k in loan forgiveness for workers in the building, mechanical, industrial, or medical trades.
• $5.4M for increasing wages and recruitment of nursing educators.
• A new $5M nursing scholarship program and a loan repayment program for workers who choose to stay in Vermont after graduation with a $5M appropriation.

Housing

The Senate Economic Development Committee took testimony on S.226 Wednesday, dealing with affordable housing. The bill incorporates language from H.511 that would allow Neighborhood Development Areas (NDA’s) to file joint permitting applications and allow them to build in floodplains. NDAs would not be required to have municipal water and sewer permits to apply for a designation and the definitions would change to allow up to four residential units per lot. This is meant to encourage sub-division in downtown areas to increase housing density.

There are also changes to Act 250 priority housing units; the cap would be lifted to 50 units for towns of less than 6k people. Mixed-use projects are now included in the definition or priority housing projects - commercial and retail can help developers cover cost of these projects. The benefit is that priority housing project's are exempted from the Act 250 process.

The bill would also create a $3M municipal bylaw modernization grant that would be administered by the Regional Planning Commissions. Accessing the grant program would require that municipalities set up smart growth areas. To do this, municipalities must make changes to bylaws to allow more affordable housing, make it pedestrian accessible, and waiving parking regulations where appropriate.

Down payment assistance programs would be re-designed to give priority to first generation home buyers. The bill was voted out of Committee on Thursday and was referred to the Senate Finance Committee.

 

Economic Development

State Auditor, Doug Hoffer, provided testimony on S.263 on Friday, following a memo dealing with economic development. Hoffer noted serious problems with the capital improvement projects program. This program is a re-tooling of a previous program providing revenue replacement for businesses that had been economically harmed during the pandemic. Because of US Treasury rules, the proposed use of money for capital investment could put the state at risk of having to repay some of the funds. The Federal government is concerned about duplication in programs and if businesses applying for relief under the capital program have already received some money from another program it is likely that they could not apply for a new assistance under the same instance of economic harm (i.e. the pandemic).

Chairman Siroktin asked if these concerns have been raised before, he was surprised that the Joint Fiscal Office (JFO) had not picked up on this. Hoffer noted that JFO does not have the bandwidth to review all of these programs unless specifically requested to. Federal requirements for capital programs are very onerous and capital projects are not their first choice for economic development.

Representatives from Agency of Administration voiced that they do not feel that the Auditor has the information to arrive at the conclusions he did. They do not have program documentation ready yet but they are actively working with the US Treasury to go over the program to make sure it complies. Hoffer did not have access to that information, however he plans to send a letter to the Committee about this issue.

The Committee also heard from the Brattleboro Development Corporation. They are asking for funding to help downtown development corporations, because these organizations are the "frontline of economic development" in our state. Many of them are working with their local business to help shepherd them through the ARPA process and they need state money to continue to do this work.

 

Good Government

The Senate Government Operations Committee voted out the ethics bill (S.171) on Wednesday after making changes that allow the rules of professional conduct for members of the judiciary and attorneys to override the statewide Code of Ethics. Their concerns related to ill-defined "unintended consequences" of having attorneys and judicial employees subject to a Code of Ethics. This concluded weeks of debate between good government advocates (including CFV) and the judicial branch about how to apply the code to specific groups of employees.

We plan to continue pushing to limit exemptions from the Code of Ethics when the bill reaches the House, but we are pleased that the Senate found a path forward for advancing the bill. Two specific steps we would like to see addressed are:

• Ethics Commission would make the determination about whether a specific inquiry relates to ethical conduct or professional conduct (i.e. rules specific to an occupation would apply).
• Removal of references to the judiciary's disciplinary authority (this is not an enforcement bill).

Overall, we are beginning to loose confidence that members of the judicial branch are making arguments in good faith. At the outset they asked for an outright exemption because they have rules surrounding their professional conduct (which many employees in state government already have), however the code of ethics is meant to address a person's conduct as a public official not specifically as an attorney, court magistrate, accountant, medical professional or any other occupation within state government. Occupational roles will always have specific rules that apply to them. A Code of Ethics is meant to create a baseline set of rules for what conduct Vermonters can expect from their public officials, regardless of their occupation or profession.

Further, the next argument against having the judicial branch and attorneys was "unintended consequences" around conflicts of interest. There were few examples given around what kind of conduct might be permitted by rules of professional conduct but not under the Code of Ethics and those that were had already been addressed through language in the bill. The reality is that there are no consequences as there is no enforcement mechanism in the bill. Even if there were enforcement mechanisms, than all that would be required of a public official is to recuse themselves from the situation that is causing the conflict or provide a written statement about why they are proceeding with the matter in front of them. Not that difficult.

We expect to see the bill on the Senate floor Tuesday.

 

Education

The Senate Finance Committee announced on Tuesday that they have agreed to follow the recommendations of the Student Weighting Task Force (keeping the weighting numbers they proposed), but will follow the Senate Education Committee's recommendation around additional funding for English Language Learners which would provide a block grant to applicable districts to cover the cost of implementing a program.

The bill would implement the new weights in FY2024, create and new Education Fund Advisory Committee, and add six new staff members to the Agency of Education (AOE). Another interesting new requirement is for every student to file an income declaration form due to concerns around underreporting of income-eligible families. The intent is to get more accurate data surrounding the economic makeup of a school district to base the weighting factors on. These forms and the weighting factors claimed by districts will be audited by the new AOE staff.

The Joint Fiscal Office (JFO) pins the spending impact to the Education Fund at $1.75M based on the ELL grants and staffing changes. We believe this number will end up being much higher because of the spending behaviors that the new weighting factors will incentivize, however JFO was not asked to provide analysis of this (and it would be quite difficult).

 

The Senate Education Committee looked at a bill this week related to "ensuring compliance with US and Vermont constitutions" in how the state utilizes public tuitioning dollars. The bill stresses several times the importance of not using public tuition to support religious instructions and discrimination and requires that a contract be signed with the State Board of Education (SBE) to prevent these uses.

It also requires in FY2024 that independent schools prepare IEP's for all students with special needs to include a safe and supportive environment and must comply with antidiscrimination laws. It also sets up a procedure for receipt of any complaints or concerns that the independent school is not living up to its contract or agreements (maybe they should consider this for public schools too!).

The bill is responding to a set of lawsuits working their way through state and federal courts around what restrictions can be placed on public tuition vouchers. Previously no tuition could go to religious schools, however last year a federal court ruled that was unconstitutional on the basis of religious discrimination. While appeals are still pending, they seem unlikely to overturn this ruling. This current bill is attempting to limit how those funds can be used instead of restricting them completely. The language in the bill prevents the use of public tuition to "support religious instruction, religious indoctrination, religious worship or the propagation of religious views. Except for religious instruction that is designed to provide an overview of religious history and teachings and does not support religious instruction, etc."

The SBE is authorized to use its powers to revoke, suspend or impose conditions on the eligibility of an approved independent school to receive public tuition for noncompliance with these requirements.

 

Things to watch for next week:

Creation of the Statewide Code of Ethics (S.171) - Senate Floor on Tuesday

Economic Development Bill (S.263) - Senate Economic Development on Tue and Wednesday

UVM and VSC Governance Changes (S.248) - Senate Education on Tue and Wednesday

Child and SSI Tax Credits and Exclusions (H.510) - Senate Finance on Tuesday

Workforce Development Bill (H.703) - House Floor on Wednesday

Education Governance Bill - House Government Operations on Wednesday

Vermont Economic Development Authority (H.627) - Senate Finance on Wednesday

 

We reviewed many hours of legislative testimony to bring you this report, please consider supporting our work.