by Hilary Niles vtdigger.org As part of a plan to shore up Vermont’s retired teachers’ health care fund, schools likely will have to pay an annual health care fee for new hires. The joint House-Senate budget conference committee gave preliminary approval to the $1,072 fee Thursday night, along with several other aspects of a multi-million dollar, decade-long plan to shore up the fund. State treasurer Beth Pearce asked lawmakers for a July 1 start date for the assessment on new teacher hires, which would have impacted current year school budgets. But lawmakers rejected that request. They do not want to disrupt school budgets that have already been set. The conferees decided the state will assess the $1,072 fee for new teacher hires after July 1, 2015.
By the time the new hire assessment kicks in, the fee will be slightly higher, as it is indexed to inflation.
The Vermont School Boards Association and the Vermont League of Cities and Towns have complained about the assessment, which they say will burden local property taxpayers.
The fund is created by the state, they maintain, and the state and teachers who pay into the fund should figure out how to pay for it.
But the state failed to fund the health care properly for years, instead borrowing money from the teachers’ pension fund. The pricetag has grown to roughly $28 million per year.
Pearce estimates the compromise package will save the state almost a half-billion in interest over the next 25 years.
But in order to get there, schools have to contribute, she and other stakeholders say. Lawmakers agree.
In addition to the annual fee for new hires, the pending budget and other legislation includes a $28 million General Fund loan plus other appropriations, higher employee contributions from new hires and as-yet unvested employees, and use of federal grants to cover proportional long-term health care costs.