Legislative Review: Budget, solar siting part of 2016 agenda
By Rep. Fred Baser, R-Bristol
The legislative session is upon us. What are some of the major topics for 2016? Dealing with the state’s fiscal problems, possible revisions to Act 46, last year’s major education bill, adding solar siting criteria that adds a dose of local control, marijuana legalization and mandatory sick days for most Vermont workers.
There are two bills that are in my committee, Commerce and Economic Development, which I feel are important. One is developing a clear definition of “independent contractor,” an issue that is of concern to many of the self-employed folks who are finding it difficult to act as a subcontractor on projects. The second is passing legislation that focuses on the construction of reasonably priced housing.
Vermont’s fiscal situation is unhealthy. For the last five years, our current administration and legislative leadership have approved General Fund budgets that exceed the state’s economic growth (as measured by the Gross State Product), our own economists’ income growth forecasts and growth in Vermonters’ paychecks. After dealing with shortfalls in preceding years, we enter this session with a $40 million (3 percent of budget) gap in this year’s General Fund budget and a projected $58 million (4 percent of budget) shortfall in 2017’s General Fund budget.
The main culprit this year is Medicaid spending. Medicaid is a health-care program designed to assist low-income people. Over 200,000 Vermonters (one-third of state’s population) benefit from Medicaid today. Our Joint Fiscal Office has suggested there will be future budget shortfalls unless some action is taken. What can be done? Raise revenue by increasing taxes is one step. Lowering costs by shaving program expenses is another. Or we could combine the two. As we raised taxes and fees by $50 million last year, I believe being more frugal on the spending side is the prudent course. We need to get a handle on the spending side of the equation. We can’t keep spending more than we take in.
Act 46, the education bill, faces criticism on many fronts. Some want to repeal the law. Others want to eliminate or postpone the growth limitations imposed on school districts. Other school leaders embrace the act. It is likely the law will remain intact with perhaps a tweak to the cap to recognize a teacher’s health insurance premium increase of 7.9 percent.
There are many more important state issues to address than the legalization of marijuana. If it can be demonstrated that Vermont and Vermonters will benefit from legalization, I’ll support it. If the negatives outweigh the positives, I’ll vote no.
Mandatory sick day legislation passed the House last year in a close vote. The Senate seems poised to move the legislation forward with modifications. It is likely we will see a mandatory paid sick day bill become law. We won’t know the details until the bill passes.
Act 56 established a renewable energy standard and energy transformation program. It also set up a Solar Siting Task Force whose duty is to report to the Legislature on siting issues. How town and city planning can influence solar siting and the local impact is expected to emerge from the groups’ work. There will be more to come when the task force makes its report.
The reasonably priced housing bill was introduced this month. It is a process that has towns involved in obtaining all the building permits required on the housing site(s). The town would also make sure infrastructure such as roads, sidewalks, power, etc., would be in place, and then the town turns things over to the developer. An approach like this should reduce construction costs by tens of thousands of dollars per unit. Loans and a streamlined Act 250 process are part of the bill. The state needs more low- and moderately priced apartments and homes. The marketplace is not working on its own, thus the new proposal.
With the magnitude of the anticipated budget shortfalls, expect talk and maybe action on new tax proposals. Two areas that have been discussed prior to the session are a carbon tax and taxing consumer services like gym memberships, haircuts, pet grooming, auto repair, etc.
Raising taxes in an election year is customarily discouraged. So the discussions and compromises in this session will be interesting.