Scheuermann: Tourism Day success, paid family leave, fuel tax

Submitted by tim on Wed, 04/17/2019 - 03:37

by Representative Heidi Scheuermann, R-Stowe For the first time - in recent memory anyway - our state's tourism and hospitality industry came to Montpelier en masse two weeks ago for our First Annual Tourism Day at the State House.

Through my years in the House, I have seen far too often that many legislators and other state leaders simply don't understand the industry itself, or the incredible impact the industry has on our state as a whole. As such, investments made into the marketing of Vermont as a tourist destination have fallen further and further behind our competition - throughout the region, nationally, and globally.

The first Tourism Day at the State House was, therefore, the start of a concerted effort to bring more attention to the importance of our state's tourism industry and additional investment in it. And, frankly, we couldn't have asked for a better kick-off to that effort.

First, Governor Phil Scott wanted to be part of it, so brought his weekly Wednesday morning coffee hour, along with his Commissioner and Deputy Commissioner of Tourism and other senior administration officials, to Tourism Day. Speaker of the House, Mitzi Johnson joined us as well. And, legislators from across the political spectrum came to see the informational displays and videos, and to hear from Vermonters in the industry about the impact of tourism, and the need to increase our state investment in it.

Second, to further illustrate some of our tourism activities, the Vermont Ski Areas Association and Smuggler's Notch Resort set up a snowboard "Riglet Park" on the State House Lawn, and the Vermont Mountain Bike Association had a booth and demo bikes for individuals to ride.

Finally, the House Committee on Commerce and Economic Development held "The Importance of Tourism"hearing at which individuals from around the state from various economic sectors that depend upon tourism shared their knowledge, and their strong belief that increased funding is critical to our success as a state.

Specifically, each one of the witnesses expressed his/her hope that the legislature pass H. 298, a bill that would provide for a dedicated fund for tourism marketing. The bill would take a percentage of the revenues generated from tourism (rooms and meals tax) and direct that percentage into promoting and marketing Vermont as a tourist destination.

Our goal at this time it to ensure the passage of H. 298 next year.

While there are many who argue that investments in tourism marketing are wasted investments, I submit that the real impact is exactly the opposite.

In fact, the first year that Maine instituted a dedicated fund paid for by 5% of the lodging and meals tax to promote its tourism, the State saw a $20 million increase in gross receipts from the lodging and meals tax. And in FY 2019, the gross receipts from the lodging and meals tax was $208 million more than they were when the dedicated fund was instituted. While the overall tax rate in Maine increased from 7% to 9% in later years, thereby impacting the revenues further in recent years, the impact of the dedicated fund for tourism marketing is clear.

Vermont must follow the lead of the State of Maine and other locations. We can no longer sit idly by and watch as our competitors spend millions more than us to promote tourism in their states. After all, we are competing in an ever-increasingly global market. In order to grow and increase our market share of those global tourism dollars, we cannot lose sight of staying economically competitive.

Act 46 Involuntary Merger

Deadline Extension Update

I am afraid there is no new news to report in regard to H. 39, legislation that would provide for the ability for the Stowe and Elmore-Morristown School Districts to delay our forced merger for one year (to July 1, 2020 rather than July 1, 2019).

Different versions of the bill passed both the House and Senate, so it is now in a House-Senate Committee of Conference. This Conference Committee has met a few times to negotiate, but we're not quite across the finish line.

But, with the overwhelmingly favorable support in both chambers, I'm hopeful that this committee will be able to come quickly to resolution on a negotiated compromise.

In our particular case, the additional time the extension would provide is critical in our case to ensure this merger (if our appeal of the State Board of Education's decision to forcibly merge our two districts doesn't succeed) is done well, and in a way that ensures the confidence and support of all of our students, parents, teachers, and communities as a whole.

Doubling of the Heating Fuel Tax

I am pleased to see that Senate President Pro Tem, Tim Ashe, has expressed his "discomfort" about doubling the heating fuel tax on Vermonters.

As I wrote about in a prior newsletter, a few weeks ago the democratic majority in the House passed this heating fuel tax increase on Vermonters.

While the purpose of these funds would be for additional support for the weatherization program, keep in mind that the budget we passed already has significant further investments in weatherization. This would be in addition to that funding.

Is this good public policy, or does it do more harm than good?

In fact, all Vermont families will be paying these additional taxes - low-income, middle-income, high-income, and everybody in between. Yet, only some families will benefit from the weatherization program. So, in a nutshell, in many cases passage of this legislation would increase taxes on our low and middle income Vermonters to help pay for some low-income and middle-income Vermonters to weatherize their homes.

With Governor Phil Scott and the Senate President both skeptical, House Republicans and Independent united in its opposition, and some Democrats opposed to the idea, it is likely that the proposal will not advance this year, and for that, I am grateful.

Paid Family and Medical Leave

This year's legislation to create a brand-new, almost $80 million Paid Family and Medical Leave Program paid for by an increase in the payroll tax passed the House two weeks ago, and has been sent to the Senate for its consideration.

As I have been clear about time and again, I want to do all we can to ensure the ability of Vermonters to take the time needed to care for their family or themselves. As an employer myself, I know very well that my best assets in my business are my employees, and I do all I can to ensure they are compensated and treated fairly.

Toward that end, I am in favor of a voluntary Paid Family Leave Program. And I believe Governor Scott's proposal to join with New Hampshire to create a program for both states anchored by the state employees for each state deserves much greater consideration than what has been given to it in the legislature.

In fact, when H. 107 came to the House floor for consideration, I voted in favor of a start-small program with a more financially responsible budget and from which Vermonters could opt-out. Unfortunately, that proposal was defeated and the much-larger all-in proposal passed.

As background, here are the specifics of the program approved by the House:

Leave Duration
- Up to 12 weeks of parental/bonding leave
- Up to 8 weeks of own medical leave or family care leave
- Maximum leave is 12 weeks in a 12-month period

Benefit amount
- 90 percent of an employee's average weekly wage up to Vermont livable wage ($533.60 per week, or $27,747 per year) and 50 percent of an employee's average weekly wage in excess of Vermont livable wage
- Maximum weekly benefit amount is 2.5 times Vermont livable wage ($1,334 per wk.)

Funding: Payroll contributions
- Based on wages up to the Social Security taxable maximum ($132,900 in 2019)
  - 0.10 percent of wages for 6 months before benefits begin to cover administrative costs
  - 0.55 percent of wages once benefits begin to cover approximately $55 million in FY2021 ($76 million annualized)
- The employer has the option of paying some or all of the contributions due

While I have a number of concerns about this proposal, at this time, I will focus solely on the financial aspects.

First, this is a program that will be paid for by, or on behalf of, all Vermont employees in the form of a payroll tax. It will cost $220 per year for somebody earning $40,000 annually.

Second, from what I understand, it is estimated that 15,000 Vermont workers will take this leave annually. That number is 5% of our total 300,000 workforce. Yet, the program cost is estimated to be almost $80 million annually.

$80 million is more than we spend as a state on the Child Care Financial Assistance Program
$80 million is more than we spend on higher education for our young adults
$80 million is more than we spend on our Clean Water Initiatives
$80 million is more than what we are considering for the one-time infrastructure needs in our mental health system.

As one of my House colleagues said during the debate on the House Floor: "A collective expenditure of $80 million, in my view, is out of line for a benefit that will help 5% of our workforce (or 2.5% of our total population.)"

Rest assured, I will continue to be a vocal advocate of ensuring the viability of our small businesses - in this community and throughout the state - and the affordability of our state for Vermont individuals and families.

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