While we are still wrapping our arms around it, the Senate passed the pension bill this week. The ethics bill is off to a good start in the House. Workforce development and housing efforts are making progress in both the House and the Senate. All in all, it was a pretty good week.

 

Quote of the Week: “We are having a high percentage of not receiving bids at all! More and more in our weekly reports we get a report [that] we put this out to bid… no response… we have never seen this before.” - Commissioner Fitch (Commissioner, Buildings and General Services)
CFV President, Pat McDonald		Message of the Week: We are pleased by the very positive response that the ethics bill received in the House. We are glad to see legislators agree that all Vermont public officials should be held to a universal set of standards. There is still work to be done on pensions, but regardless we are happy to see the Senate advancing a bill.
Vote for Vermont: Are you a statewide candidate that wants to be interviewed on Vote for Vermont? Write us! Contact VFV

 

Fiscal Responsibility

Educational Fund Surplus

The Senate Education Committee heard from the Joint Fiscal Office on Tuesday about the $96M surplus in the Education Fund. Growth in non-property tax revenue grew much faster than expected in FY2022, which is what generated the surplus. Governor Scott wants to return half of the surplus to taxpayers and invest the other half in education initiatives. The House decided to use most of the funds to sponsor universal school breakfasts.

 

S.286 - State Employees and Teachers Pensions

The bill re-balancing Vermont's public employee pension system, S.286, passed the Senate Floor on Friday in a unanimous vote. We have not yet had a chance to finish reviewing the final language, but previous versions of the bill only address roughly half of Vermont's pension liability.

 

We published an Op-Ed from David Coates and Mark Crow this week related to the pension deficit and recommended solutions addressing it - The Art of the Possible... Not Really

 

Workforce Development

CTE Workforce Development

The House Commerce Committee took testimony from adult CTE students on Tuesday. The Vermont Student Assistance Corporation has focused on making it easier to enroll in CTE classes. Robert Bell, a 33 year-old student from Lowell, went back to school after working at JP Morgan. He is enrolled at CCV online so he can take care of his disabled wife while he was pursing an associates degree in information technology. There were a number of jobs in this field that could be done remotely, allowing him to be home with his wife.

The Committee also heard from Samantha Rivers, who transitioned from being a LNA and took courses on manufacturing safety and is now a safety tech and quality control developer doing military contracting. She is also going to Stafford Technical Center to do welding and eventually wants to have her own welding business. Another student, Brittany Pipper, found that College was not available to her. She is a single mother going to school fully funded by CCV to purse an associates degree in behavior science and wants to work in the mental health field in elementary schools. She also took advantage of workforce development funding to purchase a new laptop for school.

Members of the Committee were energized to hear about how the current workforce programs were helping people transition between careers and upskill.

 

H.703 - Promoting Workforce Development

The Senate Economic Development Committee did an initial review of H.703 on Friday. Sarah Buxton (State Director of Workforce Development, Department of Labor) presented comprehensive feedback on the bill. One of her main asks was restoring the original $1.2M in funding for new regional workforce development support specialists. The Department of Labor (DOL) is concerned about the “great resignation, mass retirements” and other shifts in with the changing dynamic of supply and demand.

DOL, VBSR, and others are working with the Federal Reserve Bank of Boston on a summer study group on workforce development. The bill also includes funding for Relocation Support Specialists to provide career counseling, employment and non-employment referrals, make warm handoffs, and remain part of the relocation team for any individual until they are no longer needed. Buxton refers to this as a “concierge” approach to address needs statewide.

Clarkson asks about department's IT upgrades and other ways the Senate has supported integrated service improvements recently. There is a new tracking & referral system which will be built out with internship, apprenticeship and other Advance Vermont programs integrated at both offices and the IT portal.

There are four main programs included in the bill:

1. Paid Work-Based Learning & Training (WBLT) Program - $1M base budget
   1. Combines the current internship and returnship programs within DOL
   2. This increased investment will support Vermont’s workforce and employers through on-the-job training. However, there is some new language being introduced to avoid exploitative practices around using interns as underpaid employees.
   3. There is also $100K included for employer start-up grants which encourage participation from smaller employers who may not have the resources to initiate an internship program.
      
      
2. During the 2021 session, the legislature appropriated $2M for DOL apprenticeship expansion activities. To date, DOL has not fully spent this appropriation.
   1. They are seeking to carry forward up to $1M.
   2. The program took longer to get off the ground than anticipated, but they are fully operational now.
   3. They received initial approval from both the Feds and the finance department to roll forward.
      
      
3. Vermont Trades Scholarship and Reimbursement Program.
   1. DOL supports this program and will work with VSAC to administer.
   2. This program would reimburse loans for trade school education.
      
      
4. Secondary Student Industry-Recognized Credential Pilot Program
   1. DOL supports this program and will work with the Agency of Education to administer.
   2. We will use existing funds for this fiscal year.

 

Housing

S.226 - Expanding Access to Safe and Affordable Housing

Senator Ram-Hinsdale introduced S.226 in the House Natural Resources Committee on Thursday as the bill was on the Senate Floor. A key piece she focused on was mitigation and rehabilitations standards, particularly in regards to flood plains and mobile home parks, but also the uses of funding to “transition folks away from these areas” through additional resources in the bill. She even suggested the possibility of using state lands to relocate people in flood plains.

There were questions about the high vacancy rates that recent reporting by Vermont Daily Chronicle and has shed light on. This seems to largely be driven by second homeowners. This bill does not address that, but they will "need to address it very soon" according to Ram-Hinsdale.

The Vermont Housing Finance Agency requested the Committee follow a "needs-based analysis" and provided an excellent presentation on the current housing situation in the state. There has been a chronic undersupply of single-family housing built over last two decades, especially at price points accessible to middle-income Vermonters. It was also noted that the growth in median home prices are now highest are outside Chittenden County, which is representative of the mass in-migration and second home sales.

They specifically called out that the Act 250 permitting rules created housing development pressures that led to dispersed rural housing stocks we now see. This is because dense and multi-unit development triggers state permitting. There is an opportunity to create local zoning that favors smaller lots using incentives and grants.

Chairwoman Sheldon expressed dismay and some surprise about the vacancy rates and how to respond to these. She suggested they discuss the “favorable taxes for second home ownership.” Some members of the Committee suggested offices that now being abandoned in the “new work paradigm” could become housing. Act 250 should require a certain percentage of affordable housing to be conversions (according to some committee members).

The Joint Fiscal Office provided a background on second homes in Vermont and their impact on tax revenue. As of the 2020 census, there were 55K second homes in the state (likely higher now). This is about 18.6% of all housesites and the second highest percentage in the country. However, because of the way they are categorized for tax purposes it is very difficult to tell which ones are suitable for permanent housing (for example, they may not be insulated for winter use). There are no special incentives in either the Vermont or Federal tax code to make second homes beneficial, however they do qualify for regular tax deductions like mortgage interest and capital gains. Because Vermont uses the federal AGI, this would impact any income taxes due in Vermont as well. A few municipalities, like Washington D.C. and Vancouver have targeted taxes at vacant housing.

Vermont Housing and Conservation Board was supportive of most of the provisions in the bill and the inclusivity of housing availability and permitting exemptions for downtown development districts. These alternative permit exemptions are proving very attractive to local developers who are looking for a streamlined avenue to get started in designated development areas.

 

S.234 - Changes to Act 250 (Housing Focused)

Sabina Haskell (Chair, Natural Resources Board) reiterated to the House Natural Resources Committee that the Administration does not support S.234 on Friday. She outlined the same objections they did in the Senate - generally they don't view this as the comprehensive reform bill they asked for and they want more supports for processing applications. Out of 500 permit application in 2021, they issued 442 permit decisions. She added that, “speaking on behalf of the staff at the NRB, we find the added criteria and expected increase in Act 250 applications and jurisdictional decisions is really daunting.”

The Committee pushed back on the Administrations resistance to supporting the bill, pointing to forest blocks and the road rule provisions as supporting the environmental protection that the NRB is supposed to support. Haskell said she would respond in writing to those two issues as there are "better ways" to approach than the bill offers.

One advocate repeatedly criticized the NRB for “failing to do its job and promulgate rules for the implementation and definition of Criteria” around land use development plans and criticized the road rule and forest block provisions in the bill as not going far enough. Essentially the argument being that any subdivision of land equates to forest fragmentation (a tenuous argument). There was general agreement among advocates that small towns without detailed sophisticated planning and zoning need state supervision of land use permitting via Act 250, especially with regards forest conservation overlays.

There were concerns raised by Committee members about those two provisions impact on the forest products industry and the activity that it might curtail outside of development.

The Vermont Planners Association opposes both the road rule and forest block provisions. The road rule provision, they argue, would lead to roads and driveways with steeper grades that will increase erosion. The current forest block definitions are too broad and not well defined. However, they do support many of the Act 250 changes proposed in this bill and S.226 around housing developments.

 

Building Cost Drivers

Matt Musgrave (Associated General Contractors) introduced his trade association, that represents general contractors in Vermont, to a joint meeting of the House and Senate Institutions Committees. They are about 4k workers short right now which has forced them to get creative in the face of the housing crisis. They are exploring options to encourage more people to go into the trades. As such, they are sponsoring internships for the first time this summer.

Musgrave and the group of experts he brought with him reiterated the need for predictable permitting. Redesigning a project costs money and time that is unanticipated, things like moving or resizing a parking lot needs to be known up front.

Cost of materials has also gone up across the board and some (many) products are not even available right now. This makes planning and design of projects difficult and unpredictable. A recent example is the rapid increase in fuel costs which makes it more expensive to move equipment and workers onto a site. One interesting bit of feedback here was that material choices during the design phase definitely impact the cost and timing of the overall project (this means that specific materials required for zoning can have an impact here).

One additional complication that some developers pointed to is that apparently all the “good construction sites” are already taken – firm soil, shallow rock, etc. All that remains now (supposedly) are brownfield sites which increase the project costs due mitigation needs.

Committee members asked how they could help with this situation. The feedback was that they should listen to experts from the field, not just architects and project designers. Also, revisiting party status for Act 250 would be helpful because it is too often used for NIMBY purposes.

The state is even seeing this in their own construction projects. They are putting out a “high percentage” bids for construction that get no responses (something we have never seen before).

 

Economic Development

H.159 - Community and Economic Development and Workforce Revitalization

The House Commerce Committee took up H.159 on Thursday, even though the bill officially lives in the Senate still. Cassie Polhemus (Chief Executive Officer, Vermont Economic Development Authority) reviewed the impacts the new mechanism for helping to deploy the ARPA recovery monies that had yet to be spent. The previous program through ACCD was too restrictive and businesses weren't able to access. We detailed these changes extensively in our March 27th update.

Chairman Marcotte is concerned these forgivable loans are similar to the Bridge Grants and the funds will not end up going anywhere. Polhemus responded that the Bridge Grant program qualification was based on net income and some businesses struggled to show economic losses based on this criteria even though they were clearly impacted by the pandemic.

There were some concerns about fraud raised by the Committee but Polhemus was able to convince them that the VEDA process was rigorous and they had experience enough to handle this program and that it would meet federal criteria.

 

The bill was taken up later in the week by the Senate Finance Committee. They did a walk through of the bill and there were questions about what the impact of the previous Bridge Grant program have been. The Committee wants to be sure that VEDA will figure out how to issue these loans more effectively. There was some skepticism of how well ACCD managed the previous program.

 

Good Government

S.171 - Adoption of a State Code of Ethics

The House Government Operations Committee heard from a number of people on Tuesday about S.171. Paul Gillies (constitutional expert) emphasized that this code of ethics was long overdue. The legislature several years ago mandated that all Vermont towns develop their own code of ethics, so its about time that the legislature followed suit.

Paul Burns (Executive Director, Vermont Public Interest Research Group) and Pat McDonald (President, Campaign for Vermont) testified in support of the bill, stressing that all three branches of government should be included; and that ultimately both would like to see an accountability mechanism attached to Vermont’s ethics laws. As drafted, the bill is asking for a simple recusal if a public official believes they may be conflicted or, alternatively, complete a one-page form which is available through the Ethics Commission that explains why the situation does not require recusal. At the end of the day, accountability and transparency protects public officials acting in good faith and preserves the public’s faith in the integrity of our government.

Campaign for Vermont also proposed that all departments and the Ethics Commission come back to report how things are going and to discuss enforcement. The committee thanked us for this suggestion and referenced it several times during subsequent testimony.

See the letter we sent to the Committee this week.

 

The Committee took this up again on Thursday with Chris Winters (Deputy Secretary of State) and Beth Fastiggi (Commissioner, Department of Human Resources), who both supported the bill in its entirety.
There were two issues which were brought up by Committee members surrounding speaking engagements and loans. There was some concern that the language may prevent meals and travel expenses related to speaking engagements that legislators were invited to from being reimbursed.

One member asked about the fact that our legislature is part time and if that changes any of the rules (it doesn't). The Ethics Commission is researching some of the questions brought forward and will provide answers. We are expecting the bill to be voted out of the Committee within the next couple weeks.

 

Education

S.248 - Governance of the Vermont State Colleges and the University of Vermont

The Senate Education Committee took testimony on a strike-all amendment of S.248 on Tuesday. The new version of the bill would simply require UVM and the Vermont State Colleges (VSC) to produce a report on how to create a more inclusive education governance structure and consider ways to better engage faculty and staff. The amendment acknowledges the transition period that the VSC is in (with consolidation of academic programs). The reports would also require both institutions to do a pros and cons analysis of having staff and faculty serve on board subcommittees.

This was a compromise because a more expansive bill would not be supported by the broader Senate, even though some members of the Committee would be interested in forcing the schools to include faculty and staff on their boards of trustees.

 

The Committee came back to the bill on Wednesday and did end up strengthening some of the language to make it more forceful in requiring UVM and the CCV to study the possibility of adding faculty and staff to both boards. They also added language on bylaw modernization.

 

H.727 - Reversal of Act 46 Mergers

The Senate Education Committee dove in on H.727 this week, which we will do a full review of in a future update. The Committee largely just did a walk-through of the bill and there was little discussion or reaction at this point. The intent of the bill is to create a clear pathway for school districts to withdraw from Unified Union (Act 46) districts, but has drawn criticism from school boards currently going through the process.

 

S.287 - Adjusting the School Funding Formula (Student Weighting)

The House Ways & Means Committee reviewed the criteria for population density in the student weighting bill, S.287, on Thursday. The Joint Fiscal Office pointed out that they would be able to roll up data from the federal census but that only updates every 10 years. Also, they would not be able to use this data for all school districts because the location data isn’t granular enough.

Annual census estimates don’t break geography down into anything smaller than a town level. What might be helpful here is to develop criteria and methods that might be helpful to flag population shifts that the state would want to take into account for these calculations. The Committee seemed to like his approach. This would really only impact rural areas in Vermont.

Doug Hoffer (State Auditor) also testified on the bill. He raised concerns around missing definitions in the bill. Education equity, for example, is something his office is supposed to audit but there is no definition in statute. There is a Committee created by the bill that is responsible for these sorts of things, but if they aren't formed in time or don’t complete their work that will impact other provisions.

There is also an issue around data capture. Currently the data required for the new weighting factors would live in multiple places. This makes setting the weighting calculations and analyzing them difficult. The Committee acknowledged this concern and will likely require the Agency of Education to collect all the data in a central location.

Accountability also came up. Just because a school district receives more funding, per taxing capacity through the school funding formula, does not mean that they will spend it on appropriate things (this is also true in our current system). This concerned Hoffer because the point of re-distributing the weighting factors was to provide more resources for specific kinds of students.

Committee members also wanted to talk about S.100 (read more below) and how this fits into this funding transition and what forms would be appropriate for families to fill out since there may be some overlap in what is required between that bill and this one.

 

S.100 – Universal School Meals

Anore Horton spoke to the House Ways & Means Committee for Hunger Free Vermont on S.100, saying that there are currently two forms being used in schools, which is causing a bit of confusion. One is the free and reduced lunch (FRL) form and the other is the family income (FI) form which determines school funding for those living in poverty. FRL forms cannot be required per federal guidelines (although it is beneficial to schools). Household income forms are a critical metric of poverty but not necessarily nutrition.

The total financial impact of universal school meals for the state is reliant on several factors. Meal participation is the single greatest variable, because the state would be covering the difference between the federal reimbursement level and actual costs. The Federal reimbursement is usually not adequate to cover the cost of producing a meal and many schools have to augment using their budgets.

There are three levels of meals: free, reduced and paid. The Joint Fiscal Office (JFO) has projected costs as high as $40M to operate a universal program.

Out of a total of 297 public schools, 85 currently offer at least one meal free to all students (usually breakfast) and 65 of these schools offer both breakfast and lunch. In the remaining schools, students who do not qualify for the FRL program are charged for their meals. These schools would be directly impacted by the mandate to serve universal school meals. In Vermont, 56K students are enrolled in schools that do not offer universal breakfast, and 64K are enrolled in schools that do not offer universal lunch.

The eligibility threshold for the FRL program is 185% of the federal poverty line, only $32,227 for a single parent with one child. JFO estimates that a single parent/one child household in urban Vermont in 2021 requires $67,759 to meet basic needs, more than twice the income-level that qualifies for FRL, and nearly 400% of the federal poverty line. As family size increases, the gap only grows.

 

Health Care

Vermont Health Information Exchange (HIE)

On Wednesday, Emily Richards from (Agency of Human Services) presented information to the House Health Care Committee relating to Health Care Reform initiative. The program relates to data collection on access to home and community-based services through Vermont’s Health Information Exchange (VHIE). Users of VHIE includes all Vermont hospitals, hospital-owned specialty and primary care practices, independent practices, Federally Qualified Heath Centers (FQHC), designated agencies and specialized services agencies, home health agencies, nursing homes and long term facilities, emergency medical services (EMS/EMT), pharmacies, state and commercial labs, and state & federal agencies.

Richards discussed the reasoning for the VHIE, including policy and processes, governance, and financing. The Green Mountain Care Board (GMCB) oversees the operational budget, as well as the Health Information Exchange Committee, the VITL Board and VHIE operations. The goals of VHIE includes creating a single health record for every person in the state, improving health care operations, and facilitating the use data to enable investment and policy decisions.

Sarah Lindberg from the GMCB discussed the Vermont’s All-Payer Claims Database (APCD). There are very large databases contain various types of health care data, including health records, administrative (insurance claims and hospital billing), public health, and survey data. APCDs are very large databases containing health care claims. Vermont established its APCD, VHCURES (Vermont Health Care Uniform Reporting and Evaluation System) in 2009, and was one of the first states to do so. There are currently 31 states that have implemented APCDs, with 8 others indicating a strong interest in doing so.

She concluded that the S.285 proposal to repeal the collection of live identifiers (e.g. name) might have little real impact because current protections would prevent most users from having access to identified data.

 

Things to watch for next week:

Workforce Development Bill (H.703) - Senate Economic Development on Tuesday

Creation of the Statewide Code of Ethics (S.171) - House Gov Ops on Tuesday (possible vote)

Act 250 Changes (S.234) - House Natural Resources on Tue and Wed.

Constitutional Compliance for Public Tuition (S.219) - House Education on Wednesday

Pension Overhaul Bill (S.286) - House Gov Ops on Wed and Thurs.

Expansion of Affordable Housing (S.226) - House Natural Resources and House General

Rewriting the Rules on Act 46 Mergers and Divorces (H.727) - Senate Education all week

Adjusting Student Weighting in the Education Funding Formula (S.287) - House Ways & Means and House Education

Amending the VEGI program (H.124) - House Commerce on Thursday

 

We reviewed 19 hours of legislative testimony to bring you this report, please consider supporting our work.