Week 12: March 21 to March 24th

Extended Debate

Last week we were "on the floor" for several long days. On Wednesday from 1:00 PM to 6:00 in the evening we sat in antique chairs debating the constitutionality of H.230. That bill is the House's response to Vermont's high suicide rate (see below). We had been warned that Thursday would be another long one and this time it stretched to 11:00 in the evening. The photo below is me during a particularly frustrating portion of the debate; probably around 10:30 on Thursday night. I am listening to the debate, not dozing. 

Where do we stand?

• Paid Family Medical Leave Insurance (PFMLI - H.66) passed out of the House on Friday after some extensive debate. Nearly everyone expressed support for paid family leave. The details are the issues.  The bill passed on a roll-call vote of 99 to 32 along party lines.  I voted in favor. That bill is now off to the Senate where it is expected to be changed considerably.

• Online Sports Betting (H.127) also left the House on a wave of support. The Senate will take it up. Online Sports Betting received strong support with a voice vote in favor. I was one of the few who said "Nay." I will explain that vote below.

• The Bottle Bill (H.158) left my committee (House Ways & Means) and is being reviewed by the Appropriations Committee.  It should come to the House floor next week. The 5 cent deposit is expanded to cover all plastic beverage containers, but not those little "nips" of liquor. 

• Affordable Heat Standard (S.5) - This Senate bill is being reviewed by the House Committee on Environment and Energy where testimony is being taken. Here's a link to a document that contains the timeline for S.5 as it came out of the Senate. I went over the more important parts of the bill last week.

• Universal School Meals (H.165) - This bill came to the floor for debate last Friday and passed on second reading with a voice vote. It will come up for third reading early next week and be sent off to the Senate.

• Suicide Prevention (H.230) This firearms related bill came up for debate on Thursday and Friday. It passed out of the House with a roll-call vote of 104 to 42 along party lines. See below for some details.

Why I voted against online sports betting

There were not many of us that voted against passage of H.127.  Revenues to the state from taxes and licensing fees would amount to several million dollars each year and much of that revenue is to go to a fund to supports dealing with gambling addiction. Those revenues will most likely increase. It's hard to turn down bills that bring money into the state treasury, but I did.

1. It's not Cannabis. There are people in Vermont now who bet on sports events illegally. There are "off-shore" online businesses that will take your money and place bets on sporting events. H.127 is said to bring that black market gambling into a regulated, controled legal market. That's the argument used for cannabis legalization. Though I agreed with that logic for cannabis, I don't for online gambling for two primary reasons.

   1. I don't know of anyone who is betting illegally, while I knew many people who were using cannabis illegally. Making online betting legal will bring more new people into that market, simply because it will be easy and legal. Many more people will be hooked into spending their money on something that with mathematical certainty will cause them to loose money. More spouses will be glued to their computer screens watching their funds dwindle and suffering the consequences of gambling addiction.

   2. Where do the profits go? Vermont's cannabis legislation encourages small Vermont businesses: growers, processorsm packagers, and retailers. Though some of the funds generated by gambling will come to Vermont state government, a bulk of the profits will go to one or two large out-of-state businesses.

2. Gambling. I'm not opposed to gambling. The buying and selling of stocks is a gamble and I occasionally buy and sell stocks. But even if I buy stocks by throwing a dart at the listing in the Wall Street Journal (if they do still list stock prices) there a good chance I will make money. With the kind of gambling in the bill there is a mathematical certainty that, over time, I will lose money. Those setting up the lines of a sports wager set the odds such that the House comes out on top, not the customers.

3. Gambling Addiction: Even though H.127 has some guardrails to prevent people from being sucked into gambling through the use of "free" bets, there can never be enough to prevent more people from spiraling down that drain to financial and emotional ruin. Vermont already has a limited amount of legal sports betting and we have the lottery and various forms of tickets for those willing to take the chance of making millions. Vermont also already has gambling addiction hotlines. They are rarely used.

Legal online sports betting has a good chance of being legal as soon as January of 2024. It won't ruin Vermont.

Suicide Prevention and Firearm Safety

H.230 came to the floor for debate at around 3:00 in the afternoon on Wednesday. We "discussed" it for several hours. The floor speech that began the debate was particularly informative and hard to listen to. You can watch it here by moving to 52 minutes and 45 seconds into the video. Representative Black's statement runs for about 25 minutes and clearly describes the intentions of the bill.

Opposition to this bill was not as strong as that against some previous firearm safety bills. Much of the controversy rested on the constitutionality of the bill. The chair of the Judiciary committee (Rep. Martin LeLonde) explained his reasons for determining that the bill would stand up to challenges at both the State and Federal level. That same video covers his floor speech. It follows Rep. Black's presentation at about one hour, 20 minutes and 20 seconds into the video and runs for about 20 minutes.  Shortly after that presentation is questioning by Rep. Pat Brennan of Colchester challenging the bills constitutionality.

Constitutionality - The issue of a bills constitutionality is often the subject of conversation and debate in the Legislature, but, in fact, the General Assembly can pass, and does pass, laws that are later determined to be in violation of the State or Federal Constitution. That's what all those court cases are about. It does not make much sense for legislators to pass laws that are obviously or even likely unconstitutional, because it is a waste of the State's resources to defend those laws in court. In this case, Vermont's Attorney General determined that H.230 is constitutional, however, the State's Public Defender went the other way. Ultimately, the courts will decide.

I voted in favor.

My Biggest Concern

There are many laudable initiatives being written into bills this session. The problem is the money. Do we have the resources to make these plans successful? Can a population already subjected to high taxes support more taxes and fees that support these programs. Here's a list of where we stand now:

• H.66 - Paid Family and Medical Leave Insurance (PFMLI ): The Joint Fiscal Office published a Fiscal Note on the projected costs. There are three cost categories: setup, ongoing, and reserves. 

  • Setup: Before the program begins there must be changes to the software at both Treasury and the Department of Taxes. Treasury, starting from scratch, will contract out the creation of the Information Technology (IT) platform that will process claims. That is estimated to cost $60 million over the first two years. The Department of Taxes must make modifications to it's existing IT system in order to collect the 0.55% payroll tax split evenly between the employer and the employee. That will cost an additional $3 million.

  • Ongoing: After the first year of product development both the Treasurer and  the Dept. of Taxes need to hire the personnel that will process the claims, respond to employers and employees, create and disseminate information about the system, handle appeals and much more. The Treasurer estimates that he will need an additional 45-50 fulltime positions once the program is running at a cost of $7 million a year. The Dept. of Taxes stated that it will require 15 fulltime positions at a cost of $2.1 million a year. Ongoing IT costs are estimated at $4 million for the Treasury and $142,000 for the Dept. of Taxes.

  • Reserves: Vermont will be taking a risk. There is the possibility that the United States will go into a recession with fewer people contributing as much to the program. This is not unemployment insurance, so an economic downturn may not result in much higher use of the benefits, but another COVID event sending more people home sick is a threat to the system. To lesson the risk, benefits will not be paid out until there is enough money in the Fund to support a full year of projected benefits. This means that for the year prior to full implementation, Vermonters will be paying into the system even though benefits will not be available. H.66 also establishes a Reserve fund equal to about another 6 months of benefits in case projected revenues and benefits uptake are less than what they really turn out to be.

  • Bottom Line: $52.6 million in startup costs. $117.6 million in revenue each year from the 0.55% payroll tax. Ongoing costs are estimated at $13.4 million leaving about $104.2 million that can be paid out for benefits. Those benefits are checks that will be spent by Vermonters and, most likely, in Vermont.

• H.165 -Universal School Meals (USM) - The cost of this program is estimated to be $29 million a year. The funds will come out of the Education Fund. Approximately two-thirds of the Education Fund comes from Property Taxes (one-third from Homestead and one-third from Non-Homestead). Property Taxes will pay for two-thirds of that $29 million each year.

PFMLI will hit Vermonters' income as it comes off their payroll check. USM will will come out of the Education Fund.

Opportunity Costs

During the Friday morning debate on PFMLI Rep. Scott Beck (R - St. Johnsbury) talked about the Opportunity Costs of the funds paid out with PFMLI. His estimate was $118 million a year of funds that could go to some other program. What opportunities are we giving up by spending that money on PFMLI? Here's his list:

We could 

• provide a $500 rent subsidy to 20,000 low income Vermonters, or

• provide all UVM students with free room and board, or

• fund capital projects directly instead of taking on debt, or

• fund all Clean Water programs, or

• fund school construction.

and there are many more.

He is correct. If PFMLI passes, it will be a hit to state finances. We will not fund other programs in order for PFMLI to work. But these are the kind of decisions State Representatives are elected to make. We set priorities. We make spending decisions that favor some and hurt others. We also, inevitably, make decisions without having all the information we would like to have. 

The costs of PFMLI are estimates and projections based on comparisons to other state programs. But each state's program is different, so the comparisons are suspect. Projections are based on assumptions about inflation and the chances of a recession. The program will take several years to get up and running. During that time we can make adjustments or back out completely. And keep in mind that the $118 million paid out is going to Vermonters to spend as the please during the particularly stressful times of serious medical illness, care for a parent or child, arrange for funerals and estate planning in the case of a family death, or handle the emotional and legal issues of domestic violence. 

If we use that $118 million to fund school construction we give up the opportunity to fund PFMLI. It's not an easy decision.

Coming up

With Crossover week done we will not be scrambling to get bills to the House floor for a vote before being sent over to the Senate. We will have time to work on House bills that will require another session to get through the complete process. We also will be considering the Senate bills that made it over to the House.

And there is the budget: The Big Bill. Last Friday House Appropriations completed their work on the basic budget proposal. That will be slightly refined and then brought to the full House floor as early as next week.