Blog

Last weekend, Brattleboro Town Meeting Representatives spent 14 hours debating the budget for our lovely little town— and we emerged with a strong mandate toward progressive spending and inclusive governance.

I’m looking forward to seeing what the year brings both for town government and for all of us living here. However, simultaneous to our endless zoom sessions, virtual motions and impassioned amendments, there was a white supremacist rally happening downtown. It’s been said so many times, but Vermont is not an island, hate does grow in our rocky soil, and we have so much work left to do. Every day we leave people behind with our policies, with our explicit practices, and sometimes just by looking the other way. We need to be explicitly anti racist, and I’m committing to do just that with all of you.

The Federal landscape continues to make so much more feel possible. We’re beginning to better understand the guidelines in the American Relief Act, and a large portion of the funds coming directly to the state is being appropriated in our budget bill that I describe in more detail below. There is also significant money going directly to towns and schools and we’re working hard to find appropriate support and guidance to ensure that money is used strategically.

Below you'll find:

• Updates From the Floor
• In Committee
• Pensions
• Bills I'm Working On
• Covid Connections
• Opportunities to Participate

Feel free to hop around!

Updates From the Floor

As I said in my last newsletter, these last two weeks have been incredibly busy ones on the floor. We’ve engaged in debate (sometimes fierce, sometimes curious) and come out the other side with an extensive set of legislation on behalf of our schools, health, criminal justice system, and farms. You can find a complete list of the bills that we voted out over the last few weeks here. Please reach out if you have questions about any of them.

The biggest bill of all is the BUDGET (and we actually refer to it as the big bill). Federal pandemic relief funds created a second “unprecedented year” for the State budget— almost doubling what we spend in a normal year. The bill includes significant one-time General Fund spending in both FY 2021 and FY 2022 and, in addition, establishes a broad spending frame and initial appropriations for the American Recovery Plan Act (ARPA) - Coronavirus State Fiscal Recovery Fund that totals just over $1 billion.

As I’ve said a few times before, Vermont’s economy is experiencing an unprecedented period. With over $10 billion of pandemic federal funds flowing into the Vermont economy, the General Fund and the Education Fund have been beneficiaries. As the Federal relief subsides, the amount of state funds is likely to be impacted. The federal funds received by Vermont represents both an opportunity and some trepidation as we carefully work to avoid future liabilities. Spending includes:

• $150 million for Broadband buildout in the most underserved parts of the state
• $685 million for our roads, railways and bridges while modernizing the state’s transportation system to make it accessible and green.
• $12.5 million for affordable childcare for all with fair wages for providers
• $3 million in innovative relief efforts, aimed at reaching our most vulnerable and underserved.
• $5 million for workings lands agricultural and forestry businesses
• $5 million to revitalize public spaces
• $50 million for affordable housing
• $20.5 million for expanded workforce development initiatives
• $70 million to help stabilize the Vermont State College System
• $150 million in one-time dollars to help address the state’s pension crisis on top of the $316 million the state will owe in pension and health care liabilities next year
• $100 million on clean water funding projects over the next five years
• $100 million to upgrade outdated state IT infrastructure

These investments aren’t all that we’re doing, and they won’t solve our systemic problems overnight. Still, in this moment, I am so grateful to be here on behalf of my communities and to work with colleagues who show up every day asking how we can support each other to build communities where we can all thrive.

In Committee

The Ways and Means Committee brought three bills to the floor this last week. The Yield Bill (which contained some extra pieces about Act 46), a Miscellaneous Tax Bill, and I was proud to report out on a third bill that expands the existing affordable housing tax credit by 250,000 per year for 5 years. This is a total of 1.5 million dollars to fund the replacement of manufactured homes throughout the state, including in Tri-Park in our very own neighborhood. The bill also creates a new surcharge on the transfer of high value properties, to be paid by the buyer at the time of sale.

As I said in my floor report, the committee on Ways and Means is tasked to raise revenue on behalf of Vermonters— in fact, specific to our charge, to examine the amount of taxes necessary to be raised for the support of the government and to inquire what measures, if any, ought to be adopted, the better to equalize the public burdens. We are all operating in a constantly changing landscape, and that means that the committee on Ways and Means must consistently reform our revenue streams, levels, and sources, so as to ensure that we can meet our obligations into the future. This new surcharge is one such measure, and I look forward to working on a few more in the near future.

Pensions

As COVID begins to seem manageable, or at least there is an end in sight, the issue of pensions, our pension liability, and how we can support our state workers is front and center of our legislative work and public attention right now. The issue is both complex, fraught, and exists within both the history of the labor movement and the history of our state budgeting. I hope you can bear with me through all the details.

I want to start by acknowledging that this feels like a terrible time to be making any changes— we are all coming out of the most stressful year of our lives, and teachers and state employees have been at the forefront of these struggles. This is also a moment where we have the leaders in place to make something happen and some extra federal money to smooth the edges of tough decisions.

This is not a conversation that started this year. We’ve been on a strict schedule to pay down the liability, the Treasurer has been working on proposed changes for the last year (in deep collaboration with the unions) and we just received a revision in actuarial assumptions.

The proposals being put on the table right now, are just that, proposed ideas in an unfolding process. It is not a "done deal." I understand that this isn’t what folks signed up for, and that so much else this year isn’t what you signed up for. I really hear the concerns and frustrations and fear, and I'd also like to share some of the perspective we're bringing to this challenge.

Pension challenges aren’t unique to this moment or to our state. However, the moment we find ourselves in is a once-in-a-lifetime opportunity to address the escalating pensions crisis. Underfunding the pension funds, low returns on investments, and incorrect actuarial assumptions going back to the 1990's have created a current trajectory that is not sustainable. The challenge before us was created by legislators and union members who share governance of the system, and we must reform it together if we’re going to fulfill our obligations and retain defined benefits into the future.

Legislators are balancing multiple commitments- one made to state employees and teachers - and the other to all Vermonters who now face a $5.6 billion unfunded liability that will soon spiral out of control if we fail to act. Resolving this pension crisis in the short-term with robust participation from all stakeholders is the fair and responsible thing to do for all concerned. Explicitly— we want to restore the pension system so it can be here for you into the future.

While Federal stimulus funds cannot be used or applied to the pensions system directly, we can use this federal support to free up General Fund dollars to make a significant pension investment. This week we passed a House Budget for FY22 that reserved $150M of General Fund dollars for pension and retiree health care. This reserve is in addition to the $316.2M we have appropriated in total for both pension funds and the $72.3M we have appropriated for teachers and state employee post employment benefits. Of the $316.2M we have appropriated for pensions, $249.5M is from the general fund—more than 13% of the total general fund dollars available to the state. It does not include an additional $37.6M for the teachers pension system paid for from the Education Fund or federal dollars that pay costs associated with salaries. In one year, from FY21 to FY 22 the pension obligation for the state employees and teachers grew from $216.5M to $316.2M. Just shy of $100M in one year. While this spending is a massive amount of money by any Vermont budgeting standards, it is not enough to transform our obligation, we will need to do more.

In addition to concerns about the size of the liability, we’ve regularly miscalculated our actuarial assumptions and our return on investment. While the Stock Market has been booming over the last 10 years, our pension investments have languished. Approximately 30% of the current unfunded liability is due to the joint investment decisions over our boards resulting in performance goals NOT being met in each of the last 10 years- again, while the Stock market was booming. That's why part of the proposal is to transform the governance of our Pension boards and to take more frequent and deeper looks into fund performance. We can't expect the Stock market to keep booming, so these investment decisions are going to become even more crucial.

I’m deeply committed to an equitable, progressive tax system, one where everyone pays their fair share, and a state budget that reflects our values. One of the challenges we grapple with is the ongoing nature of the challenge, putting money in this year makes some difference, but it is the ratio between the ongoing costs and our ability to pay that is where the crisis lies. This is why temporary surcharges, federal dollars, and the like aren’t likely solutions.

Some of the other ideas being looked at :

• No impacts to current retirees’ benefits
• Minimal changes for those close to retirement
• Preservation of the defined benefits pension model
• Investment of significant one-time money to increase assets and reduce unfunded liability
• Adding expertise and removing politics from board governance
• Ensuring contribution rates are fair and equitable for employees and employers
• Possible surcharge for higher-paid employees, up to a threshold, if assumed rates of return are not met
• Building in flexibility and progressivity to account for changes in plan experience and demographics

I genuinely want to hear from you and all participants in the Pension system— about what the impacts of changes would look like for your life and for your profession. It's why we held hearings this Friday from 4-6pm, and again on Monday from 4-6pm. If you weren’t able to make it, you’re welcome to reach out to me directly with written testimony that I can make sure goes to the House Government Operations Committee.

Bills I'm Working On

In the last newsletter I ran through the nine bills I’m lead sponsor on this biennium. You can find hyperlinks to all of them, as well as bills I cosponsored here.

COVID Connections

More Vaccines are here! Starting April 5th, Vermonters that are 40 years or older will be invited to register for COVID vaccines! Currently, Vermonters 50+ are eligible for the vaccine, as well as people 16 years or older with high-risk health conditions, school staff and child care workers, and public safety personnel.

Given the overrepresentation of COVID cases and deaths within the BIPOC and immigrant/refugee communities, as well as the fact that these communities have been shown to have less access to vaccines in VT, members of BIPOC, immigrant, or refugee communities are eligible to receive the vaccine if a member of their household is eligible to receive the vaccine through age, health, or professional requirements.

Register for a vaccine appointment here (preferred), or call 855-722-7878. You will be asked to provide your name, date of birth, address, email (if available), phone number, and health insurance information (if available, but not required). If you have any challenges with sign up please reach out to me or Senior Solutions at (802) 885-2669.

We recently were able to reinstate both rental assistance and utility assistance programs. You can learn more about both locally through SEVCA or by going to the Vermont State Housing Authority and the Vermont Public Service Department websites.

Unemployment assistance continues to be problematic— extended benefits should be available and tax documentation should be straightened out— if you need any help, please be in touch.

Opportunities to Participate

As always, please connect with me through:

• My weekly virtual coffee hour every Sunday at 11am, registration link here;
• The Montpelier Happy Hour where I unpack legislation with Olga Peters each Friday. We’re on ITUNES now, you can subscribe here. These last couple weeks we reflected on a year of COVID, talked about Land Sovereignty, and Climate Change, and will tackle broadband and pensions in the coming days;
• My newsletters and social media feeds (Facebook, twitter, insta). You can find past newsletters on the “blog” tab of my website.

And please keep in mind, I’m still available for help navigating any services (or lack thereof) with you: unemployment insurance, housing challenges, health care. Now more than ever, I’m honored to do this work with all of you. Thank you, and please be in touch.

Yours in solidarity,

Emilie