*VERMONT*
HOUSE OF REPRESENTATIVES
Term: 2013/2014
Seat: 75 District: Rutland 5-2 Committee: Education |
CONTACT
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LEGLISLATIVE UPDATE APRIL 2013
Dear friends and neighbors of the Southeast Neighborhood,
It is an honor to represent you in our state legislature and communicate the activities of the general assembly to you in this newsletter. In this newsletter I hope to share the details of the top bills discussed so far at this half-way point in the session, and the impacts to you as a citizen. Please feel free to contact me with your questions or concerns. I urge you to visit the statehouse if you are able and I will meet with you to ensure your visit is productive.
My Assigned Committee-Education
I am a member of the House Education Committee and have been very busy hearing testimony from many organizations and legislators with regard to education bills.
With almost 90 percent of proposed school district budgets accounted for, the House Committee on Ways and Means has submitted its annual proposal for education tax rates for FY14. Rising health insurance, special education costs, contractual salary increases, and a shrinking student population have combined to drive spending per pupil sharply up; education spending is now projected to increase 5.5 percent, or around $64.4 million, from last year.
Coupled with a still-declining statewide grand list (down 1.5 percent) and revenues from other sources not keeping pace, the increase will put pressure on property tax rates. The House voted last week to increase the homestead tax rate to 94 cents per $100 assessed value, up from 89 cents in FY13. The non-residential rate will climb to $1.44, up from $1.38.
At the request of House Republicans the Shumlin Administration provided an overview of his education proposals and the costs so that we could see the entire concept. The Governor is proposing an increase to education costs which will include increasing public pre-K. Many of the proposals have merit, due to concerns over the workforce and recent news about Vermont’s low math scores on testing. Yet there appears to be no other state source of revenue to make up the difference in increased costs. The impact on the tax payers in the City of Rutland will be an increase in property taxes.
Budget and Tax Issues
The state’s budget has increased more than the rate of inflation for the last 5 years and revenues have not yet returned to 2008 levels. Therefore, the state budget is under considerable pressure.
Governor Shumlin has proposed the following:
• A general fund budget that is a 3.4% increase over last fiscal year, including 79 new positions in state government.
• A 4.0% sales tax on fuel in addition to the current state and federal gas taxes, equal to about 12 cents per gallon.
• A 5 cent increase in education property tax rates due to shortfalls in the Education Fund and increases in spending. This will mean at least a $73 increase for a typical Rutland City home assessed at $150,000.
• If the governor’s budget is passed--as is--the state’s contingency will dwindle to about $1.8 million or about 1% of the nearly $1.5 billion proposed budget. This puts the state at financial risk. The state treasurer asked the Appropriations Committees to consider appropriating an amount of $30 million to boost cash reserves and an additional $20 million for teacher’s retirement fund, neither of which is in the governor’s budget.
The Capital Fund will be required to focus much of the state’s bonding authority on the reconstruction of the Waterbury complex and the Vermont State Hospital to replace hoped for FEMA funding for these facilities in an amount of about $90 million.
The State Teacher’s Retirement Fund funding has dropped to 61% from 63%, and the State Employees Retirement Fund has dropped to 77% funding from 79% over last year. Given that the stock market has actually done well, despite the economy, this is problematic. The total unfunded pension liability is now $1.3 billion or $5,100 for each Vermonter. Funding this obligation will prove to be more difficult in the future given the budgetary pressure that will come from human services, education and health care.
Health Care
Vermont Health Connect (the exchange, 2014)
Insurance costs for approximately 110,000 Vermonters subject to the Exchange starting in January 2014 will increase if your previous coverage was through your employer’s association, Catamount or VHAP. This has been known since early 2012 and will have a direct impact on municipalities that employ fewer than 50 people, thus increasing municipal taxes. The governor has proposed additional funding to soften the blow of the increases, but the federal government disallowed the funding formula and now that amount is reduced by $4.0 million from an original budget of $9.5 million.
Employers will be encouraged to drop their employee health care plans due to cost increases and low penalties for doing so, thus encouraging participation in the exchange, which is the goal of the state. I am concerned that many Vermonters will choose to go without coverage when this happens. Enrollment in the exchange will begin in October 2013 for coverage starting in January 2014.
Green Mountain Care 2017
Green Mountain Care--a single payer system mandatory for most Vermonters will begin in 2017. It will be funded by $1.6 billion in new taxes above what we pay today, or three times the current Vermont income tax collection of about $600 million.
Act 48 required the administration to produce a financing plan for Green Mountain Care, the single payer system by January 2013. The UMass report suggests that Green Mountain Care will require $1.6 billion dollars in new taxes, along with anticipated increases in federal Medicaid funding to finance the new plan. The plan did not provide a recommendation as requested by the legislature and there are many questions still unanswered in this proposal, such as health care out of state (portability) and how much out of pocket costs will increase under the system. The state paid $300,000 for the study which represents the 4th study regarding single payer health care the state has commissioned in recent years.
Environment & Energy Issues
A bill has been introduced by a bi-partisan coalition to establish a moratorium on industrial wind projects in the state in response to citizens’ concerns in northern and southern Vermont. It has recently come to light that the New England grid is capping the amount of energy it can accept from industrial wind or large solar arrays due to intermittent production issues.
A natural gas line is slated for construction from Chittenden County to Middlebury. If extended to Rutland this would be very beneficial to our region and I will continue to push for that.
Transportation
The Governor has proposed supporting the Western Corridor Rail. While this is welcome news, OMYA which had originally pledged $25 million for the construction of the Middlebury spur of the project, has withdrawn its support. Federal cut backs due to sequester may limit transportation funds for projects at the state airports, which will impact Rutland.
-Representative Larry Cupoli
It is an honor to represent you in our state legislature and communicate the activities of the general assembly to you in this newsletter. In this newsletter I hope to share the details of the top bills discussed so far at this half-way point in the session, and the impacts to you as a citizen. Please feel free to contact me with your questions or concerns. I urge you to visit the statehouse if you are able and I will meet with you to ensure your visit is productive.
My Assigned Committee-Education
I am a member of the House Education Committee and have been very busy hearing testimony from many organizations and legislators with regard to education bills.
With almost 90 percent of proposed school district budgets accounted for, the House Committee on Ways and Means has submitted its annual proposal for education tax rates for FY14. Rising health insurance, special education costs, contractual salary increases, and a shrinking student population have combined to drive spending per pupil sharply up; education spending is now projected to increase 5.5 percent, or around $64.4 million, from last year.
Coupled with a still-declining statewide grand list (down 1.5 percent) and revenues from other sources not keeping pace, the increase will put pressure on property tax rates. The House voted last week to increase the homestead tax rate to 94 cents per $100 assessed value, up from 89 cents in FY13. The non-residential rate will climb to $1.44, up from $1.38.
At the request of House Republicans the Shumlin Administration provided an overview of his education proposals and the costs so that we could see the entire concept. The Governor is proposing an increase to education costs which will include increasing public pre-K. Many of the proposals have merit, due to concerns over the workforce and recent news about Vermont’s low math scores on testing. Yet there appears to be no other state source of revenue to make up the difference in increased costs. The impact on the tax payers in the City of Rutland will be an increase in property taxes.
Budget and Tax Issues
The state’s budget has increased more than the rate of inflation for the last 5 years and revenues have not yet returned to 2008 levels. Therefore, the state budget is under considerable pressure.
Governor Shumlin has proposed the following:
• A general fund budget that is a 3.4% increase over last fiscal year, including 79 new positions in state government.
• A 4.0% sales tax on fuel in addition to the current state and federal gas taxes, equal to about 12 cents per gallon.
• A 5 cent increase in education property tax rates due to shortfalls in the Education Fund and increases in spending. This will mean at least a $73 increase for a typical Rutland City home assessed at $150,000.
• If the governor’s budget is passed--as is--the state’s contingency will dwindle to about $1.8 million or about 1% of the nearly $1.5 billion proposed budget. This puts the state at financial risk. The state treasurer asked the Appropriations Committees to consider appropriating an amount of $30 million to boost cash reserves and an additional $20 million for teacher’s retirement fund, neither of which is in the governor’s budget.
The Capital Fund will be required to focus much of the state’s bonding authority on the reconstruction of the Waterbury complex and the Vermont State Hospital to replace hoped for FEMA funding for these facilities in an amount of about $90 million.
The State Teacher’s Retirement Fund funding has dropped to 61% from 63%, and the State Employees Retirement Fund has dropped to 77% funding from 79% over last year. Given that the stock market has actually done well, despite the economy, this is problematic. The total unfunded pension liability is now $1.3 billion or $5,100 for each Vermonter. Funding this obligation will prove to be more difficult in the future given the budgetary pressure that will come from human services, education and health care.
Health Care
Vermont Health Connect (the exchange, 2014)
Insurance costs for approximately 110,000 Vermonters subject to the Exchange starting in January 2014 will increase if your previous coverage was through your employer’s association, Catamount or VHAP. This has been known since early 2012 and will have a direct impact on municipalities that employ fewer than 50 people, thus increasing municipal taxes. The governor has proposed additional funding to soften the blow of the increases, but the federal government disallowed the funding formula and now that amount is reduced by $4.0 million from an original budget of $9.5 million.
Employers will be encouraged to drop their employee health care plans due to cost increases and low penalties for doing so, thus encouraging participation in the exchange, which is the goal of the state. I am concerned that many Vermonters will choose to go without coverage when this happens. Enrollment in the exchange will begin in October 2013 for coverage starting in January 2014.
Green Mountain Care 2017
Green Mountain Care--a single payer system mandatory for most Vermonters will begin in 2017. It will be funded by $1.6 billion in new taxes above what we pay today, or three times the current Vermont income tax collection of about $600 million.
Act 48 required the administration to produce a financing plan for Green Mountain Care, the single payer system by January 2013. The UMass report suggests that Green Mountain Care will require $1.6 billion dollars in new taxes, along with anticipated increases in federal Medicaid funding to finance the new plan. The plan did not provide a recommendation as requested by the legislature and there are many questions still unanswered in this proposal, such as health care out of state (portability) and how much out of pocket costs will increase under the system. The state paid $300,000 for the study which represents the 4th study regarding single payer health care the state has commissioned in recent years.
Environment & Energy Issues
A bill has been introduced by a bi-partisan coalition to establish a moratorium on industrial wind projects in the state in response to citizens’ concerns in northern and southern Vermont. It has recently come to light that the New England grid is capping the amount of energy it can accept from industrial wind or large solar arrays due to intermittent production issues.
A natural gas line is slated for construction from Chittenden County to Middlebury. If extended to Rutland this would be very beneficial to our region and I will continue to push for that.
Transportation
The Governor has proposed supporting the Western Corridor Rail. While this is welcome news, OMYA which had originally pledged $25 million for the construction of the Middlebury spur of the project, has withdrawn its support. Federal cut backs due to sequester may limit transportation funds for projects at the state airports, which will impact Rutland.
-Representative Larry Cupoli
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