Vermont Legislative Report – January 16, 2014

Date: January 14, 2014

The single most important issue facing lawmakers during the upcoming session is how to handle the State budget.  It is projected that the budget faces a $70 million shortfall.  Although the $70 million figure does not represent a significant increase compared to gaps that have been faced during recent legislative sessions, this year there are no federal or alternate state funds that can be used to help cover the shortfall.  Governor Shumlin is scheduled to present his ideas for dealing with the budget to the Legislature on January 15, when he delivers his annual Budget Address.

It is widely assumed that the $70 million shortfall will at the very least have to lead to more efficient budgeting or even budget cuts.  Legislators are expected to be forced to take a hard look at many government programs to determine which ones are working well, or to figure out which programs may be providing duplicate or similar services.  Several key figures, including Governor Shumlin, have maintained that the budget gap should be addressed through tighter budgeting and not by increasing taxes.  Senate president pro tem John Campbell stated:  “The priority, of course, is the budget. And what the key is, for me, is to try to balance the budget without raising any revenue. And people say, ‘Well how do you do that?’ …So, again, you always go back to see how programs are working, whether there are certain costs that are being incurred by certain departments or agencies that may be superfluous or they’re not getting the result we had intended when we first started the program.”

NFIB/VT will certainly be listening to Governor Shumlin’s Budget Address on January 15, and paying close attention to the details and priorities he puts forward in regards to the budget.  We encourage our members to tune in to the Address which can be heard on many media outlets.

Health care reform is another ongoing issue that received immediate attention at the start of the legislative session.  Governor Shumlin took the unusual step of meeting with the House and Senate Health Committees on the first day of the session to update legislators on where things stand with Vermont’s effort to reform its health care system.  Shumlin accepted responsibility for the very bumpy rollout of Vermont Health Connect, the state’s new, highly criticized online health exchange.  “No one is more disappointed than I am that we fell short of our rollout in the exchange, and I take responsibility for those failures,” Shumlin said. “I know that we have work to do to restore Vermonters confidence in our ability to get health care right.”

In fact, the House Health Care Committee has already scheduled a week of oversight of Vermont Health Connect and lingering questions about its effectiveness will likely be a topic of discussion during the first part of the session.  For his part, Governor Shumlin also announced that he would be temporarily reassigning Secretary of Commerce Lawrence Miller to the Department of Vermont Health Access, where he’ll use his “practical business management” experience to identify and remedy problems.  Shumlin said he’ll also commission an independent review of the exchange rollout, to find out what went wrong, and how to make sure it doesn’t happen with the state’s next big information technology venture.

That ‘next big information technology venture’ is likely going to be Vermont’s effort to establish a single-payer health system.  The push toward a single-payer system will be quietly overshadowing lawmakers’ healthcare discussions during the session.  Governor Shumlin voiced his continued unequivocal support for moving toward such a system.  He told lawmakers: “Let me be very clear: I have never been more convinced of the need to keep moving forward. I have never been more certain that we’re on the right path. And I’ve never been more committed to ushering in America’s first universal affordable publicly financed health care system right here in Vermont.” He also stated that he planned to outline the menu of taxes that could be used to fund a single-payer system at some point during the legislative session. Vermont’s potential single-payer system is expected to cost $2 billion, and the governor wants to put it in place by 2017.  It is widely believed that some kind of a payroll tax will be proposed as a funding mechanism for the single-payer system.

One of the most contentious topics of the Legislative session will likely be the debate over whether to require employers to provide paid sick leave to their employees.  A loud coalition of 15 groups has been organizing to persuade the Legislature to pass H.208, a bill that would require employees to accrue paid leave of 1 hour for every 30 hours worked, up to a maximum of 56 hours in a 12 month period.  An employee’s accrued leave could be rolled over each year, but employees could not ‘bank’ more than 56 hours. Employees would be able to use their paid time to care for themselves or their family, and also to remedy sexual and domestic violence problems.

NFIB/VT is staunchly opposed to mandating paid leave requirements on Vermont’s small businesses. The mandated paid leave approach called for by H.208 forces a “one-size-fits-all” requirement upon employers which is neither necessary nor appropriate.  Employers should be allowed to determine what leave policies are appropriate based on the needs of their individual businesses. 75% of Vermont businesses already provide some form of paid leave to their employees; most of those that don’t simply can’t afford to, or would have great difficulty running their businesses with such a mandate in place.  Indeed, surveys from other states where paid sick leave laws have been put in place show that the laws tend to curtail hiring, limit work hours offered to employees by employers, and scale back other employee benefits.

The fact that H.208 does not exempt small businesses with fewer than 25 employees from its requirements, as is the case with existing maternity leave and family leave statutes in Vermont, is especially troubling to NFIB/VT.   Thus, the monetary and administrative costs of maintaining paid leave policies would be too great a burden on small Vermont employers

We will closely follow the debate over H.208 when it is taken up by the legislature.  Governor Shumlin has no yet said whether he would support a paid leave mandate, while House Speaker Shap Smith has stated he supports the bill and that he will not stand in the way of an up-or-down vote in the House.  We encourage our members to immediately begin to reach out to your local legislators to voice your concerns and share your thoughts on this proposed legislation.

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