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Leonine State House Report: The calm before the storm

Submitted by tim on

Leonine Public Affairs A sense of harmony prevailed in the Statehouse this past week, as evidenced by the passage of the the FY18 budget adjustment bill with only one dissenting vote. However, that harmony probably won’t last for long. Governor Scott is scheduled to outline his proposed FY19 budget in an address to a joint assembly of the House and Senate on Tuesday, January 23. The governor's speech will give legislators and Vermonters a better understanding of his priorities for the 2018 legislative session. It will also be an opportunity for legislative leaders to put forward their vision for Vermont and express where their budgetary priorities differ from the governor's.

Despite the sense of harmony there was plenty of chatter in the statehouse this week about a report from the Agency of Human Service (AHS) proposing that a 925 bed prison and mental health treatment facility be constructed in Saint Albans Town. The proposal, which we go into greater detail later in the newsletter, would involve CoreCivic, a company formerly known as Corrections Corporation of America (CCA). That company has a well known reputation for their management of private prisons across the country. This proposal will be a political football from now until the end of the session given the strong opinions many politicians and advocates have about the company and private prisons in general.

The action will certainly escalate next week and the session is already off to a much quicker start than last year with the legalization of marijuana and the passage of other bills by the House.

BUDGET ADJUSTMENT 
At the beginning of each session lawmakers revisit the current fiscal year budget to make adjustments based on updated revenue numbers and spending needs. The FY18 Budget Adjustment Act (BAA) is fairly routine this year, with just $5.767 million or (0.2 percent) in adjustments. Perhaps the most interesting aspect of the budget adjustment debate was a proposal from the Agency of Education (AOE) to spend $300,000 on a study of how rural schools are impacted by an element of the state’s complicated education funding formula. In 2017 the legislature directed AOE to study the issue, but AOE was unable to complete the request due to a lack of funds and subsequently requested additional funding as part of the FY18 BAA. The House opted not to include the proposed $300,000 in budget adjustment. 
E-BOARD REVENUE FORECAST 
The Governor and chairs of the “money committees” (Senate Appropriations, Senate Finance, House Appropriations, and House Ways & Means), who make up the Vermont Emergency Board, met Thursday in the Governor’s Ceremonial Office to consider the consensus revenue forecast prepared by economists employed by both the executive and legislative branches. The forecast includes projected receipts for the General Fund, the non-dedicated components of the Transportation Fund, and the non-property tax components of the Education Fund, and serves as the basis for decisions in the appropriations process. Economist Jeffrey Carr kicked off the meeting by saying that it was a “revenue forecast for the ages” due to the uncertainty associated with the impact of recent federal tax changes on state revenues. The initial analysis shows that General Fund revenues will increase. Specifically, the E-Board adopted a net revenue forecast of increases of $8.1 million in FY18 and $29.7 million in FY19. State revenues through the first six months of the fiscal year for all major funds were roughly two percent above targets. Some of the increase in General Fund revenues can be attributed to the accelerated estimated income tax payments by self-employed Vermonters.

MINIMUM WAGE
The Senate Committee on Economic Development, Housing and General Affairs continued deliberation on a proposal to raise the state minimum wage to $15/hour. S.40 as introduced would raise the state minimum wage to $15/hour by 2022 and the committee heard perspectives on the proposal from a variety of different interests including business owners, labor representatives, economists and state officials. There have been many concerns and benefits presented as reasons to either table or move forward with the proposal. To name a few, concerns have been raised about whether the proposal would be a disincentive for employers to grow their workforce and create a barrier to job creation. Proponents of the bill argue the proposal is an important step to making Vermont a more affordable place to live and work, which they say will help grow the workforce. Others have advocated for a longer phase in of the requirement.

Senate President pro-tem Tim Ashe, D-Chittenden, has indicated S.40 is a top priority and the Senate Economic Development Committee appears motivated to move the provision in some form. This creates and interesting political dynamic between the Senate and House as Speaker Mitzi Johnson, D-Grand Isle, has indicated a preference for sending a paid family leave bill to Governor Scott’s desk. The Governor has expressed opposition to both proposals citing concerns about the impact on economic growth and workforce development. 
INTERNET SERVICE PROVIDERS/PRIVACY/NET NEUTRALITY
The issues of the privacy that should be afforded by Internet Service Providers to their customers with respect to customers’ browsing history (“ISP Privacy”) and the separate issue of “net neutrality” were topics of discussion in the Senate Finance Committee Friday afternoon. The discussion was prompted by testimony from the Attorney General’s Office on S.289, which relates to ISP Privacy. Late in the 2017 session interest in ISP Privacy was piqued by Congress’s repeal of ISP privacy rules that had been promulgated by the FCC in the fall of 2016. Because of Congress’s action the Legislature tasked the AGO with studying the matter, with a report due in December 2018. However, S.289, which was introduced earlier this month, would require ISP’s operating in Vermont to abide by the same type of rules that were repealed by Congress. If enacted it would effectively render the study the legislature ordered last year irrelevant. The AGO suggested that the study process be allowed to move forward before the Legislature acts on the question. The conversation then morphed in a general, high level discussion of net neutrality. The Committee is going to take testimony on both issues next week and beyond. In addition to the discussion in the legislature the AGO joined 21 other attorneys general in suing the FCC as a result of net neutrality rule repeal. 
AHS FACILITIES REPORT
The state house was abuzz this week with the release of the Agency of Human Services (AHS) Facilities Report, which the Legislature requested last session. The purpose of the report was for AHS to develop a plan to support specific populations, including offenders in correctional facilities. AHS’ recommendation is that the State of Vermont take actions that would lead to the construction of a 925 bed facility in Saint Albans Town that would house male and female offenders and inmates with a history of mental illness. The plan also includes the closure of the Chittenden Regional Correctional Facility and Northwest State Correctional Facility. This new facility would be constructed by a private entity and leased to the State. CoreCivic, (formerly Corrections Corporation of America), a private prison company has already indicated an interest in obtaining the contract to build the facility, which AHS estimates could cost as much as $165 million.

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Source: Leonine Public Affairs, Montpelier, Week 3. 1.19.2018. leoninepublicaffairs.com. Through a special arrangement with Leonine, Vermont Business Magazine republishes Leonine's weekly legislative report on vermontbiz.com.