Week 17: April 25th to April 28th

The Last Two Weeks

The May 12th target session-end date remains. But there's a lot to get done by then. The $8 billion budget has been amended by the Senate. It came back to the House on Friday and a committee of conference was called. Three Senators and three House members will now meet to resolve their differences. Rumors suggest that won't be easy.

The Affordable Heat Standard also came out of the Senate on a 20 to 10 vote. This time the Senate made no changes. S.5 was delivered to the Governor on Friday. The Governor does not like it and has voiced opposition in the past. There are a few more details of the controversy later in this post.

The Early Education and Pre-Kindergarten bill (S.56) is now in House Ways & Means were we are looking for ways to fund the additional roughly $85 million per year for a couple years, then nearly $200 million a year to sustain it. The bill will start the process of professionalizing the Day Care and Early Education system in Vermont. The somewhat lofty goal is to provide subsidies (though we don't like that word) that enable all Vermonters equitable access to high-quality day care and early education. But lofty goals have lofty prices. More on this below

A bill (H.66) to provide Paid Family Medical Leave Insurance for Vermonters is still in the Senate's Committee on Economic Development, Housing and General Affairs where it seems to be languishing. It's possible that this major innitiative will have to wait another year or so. Or something drastic could happen with that bill suddenly appearing in the Budget or somewhere else.

A major Housing bill (S.100) is also moving through House committees and should come to the floor during the last week of the session. That bill will come to my committee this week for a review of the fiscal impact.

The Clean Heat Controversy

What's the problem?

The big controversy with S.5 has shifted from "What will it cost?" to "Can it be stopped?" It all boils down to one paragraph. In the version that has now passed both the House and Senate and sits uneasily on the Governor's desk contains the following:

(f) Final rules. 

(1) On or before January 15, 2025, the Commission shall submit to the General Assembly final proposed rules to implement the Clean Heat Standard. The Commission shall not file the final proposed rules with the Secretary of State until specific authorization is enacted by the General Assembly to do so.

What does that mean? The General Assembly intended it as a "checkback" ; an opportunity to take a hard look at how the program is developing and offer a chance to continue, adjust, or stop completely. That's what the Legislature intended and that's what the Legislature's attorneys say was done by adding that paragraph. The Governor disagrees. He thinks the bill is a major financial commitment that will setup a system that cannot be reversed. He says he will veto the bill.

What's the Truth?

Unfortunately both sides are correct. Portions of the bill will go forward upon passage, but the rules that are required to make the whole thing work will not be implemented without another bill being written to that effect. That bill will have to go through the regular legislative process, including approval or veto by the Governor. 

S.5 contains allocations of funds to the amount of about $1.8 million per year. That's needed in  order for the Public Utilities Commission to fill three new positions that will begin developing the clean heat standard. There will also be three new positions in the Department of Public Service to conduct a study and begin collecting data. Heating Fuel dealers will be required to register with the state and begin providing information. So yes, the bill does set the Clean Heat Standard in motion,  but . . . that motion is needed in order to make an informed decision about its continuation or adjustment. 

The reasoning is good on both sides. If you are fundamentally opposed to the Clean Heat Standard than the $1.8 million per year cost is prohibitive and a waste. If you are a supporter, then the $1.8 million is necessary to get the kind of information and planning needed to have the system succeed, or be dropped. I voted in favor of S.5.

Next Steps for S.5

The Governor will veto the bill. The Vermont Constitution states that, after a veto, the legislative body that first submitted the bill will have the first override vote. That's the Senate. If two-thirds of the Senators present at the vote approve the override, the House will have a similar vote with the same required two-thirds of those present to override. The Governor has five business days to decide if he will veto or not. If he does nothing, the bill passes without his signature. 

Funding Child Care and Early Education 

Last week I described S.56. Since then my committee has been working on how to find the required funds to pay for it. Current estimates are that we need to raise an additional $85 million a year starting in 2025 and then roughly $200 million when we get into 2029 and beyond. The source of the funds needs to be stable and reliable. That means any tax imposed should be broad based and not subject to economic whims. Ideally those people that benefit from the program will also be paying into it.

The Senate's version of S.56 proposed an addition to the Payroll Tax as a means for raising most of the funds. They also proposed repealing the State  Child Tax Credit. The idea there is that the $30 million or so saved each year by repealing the credit will be routed to Child Care and Early Education. The House is unlikely to agree. Currently, the House is proposing an increase in the payroll tax for the funding of Paid Family and Medical Leave and does not want to add even more to that tax. 

The House is considering additions to the Income and Corporate Tax. Those hikes may be made more palatable by increasing the Earned Income Tax Credit and providing those pass-through businesses that pass net-income through to partners and owners with a means of deducting state and local taxes on the tax returns of the partners or owners.

There is more involved here than expanding and financing existing Pre-K and Early Care and Education. The bill also hopes to restructure early education governance in the State. The Department of Children and Families is primarily responsible for Child Care, while the Agency of Education is respoonsible for K through 12 public education. S.56 proposes a study to come up with a plan for that reorganization.

Coming Up
Two weeks is not long. There's a lot to get done by May 12th. We will likely be putting in some long days and may be called in on a Monday or Saturday. There will be the usual frustrations waiting for the Senate to move a bill, or for a committee to make a recommendation, or for a committee of conference to get their work done. And there will be the last minute shenanigans as bills are chopped up, rewritten, dropped, and/or finally passed.