Month: December 2020

NEEP Outlook report sees Vermont jobs recovery by third quarter of this year

first_imgThe Vermont economy should recover all the jobs lost during “The Great Recession” by the end of the third quarter of this year. This is one finding of The New England Economic Partnership, undertaken by Jeff Carr and Matthew Cooper, economists at Economic and Policy Resources in Williston. The latest Vermont Outlook report was released in May.The Outlook goes on to say that while Vermont suffered less than the rest of New England, and most of the rest of the nation, during the economic downturn that started in late 2007, the recovery has been slow and some employers are still looking for workers. While a slow recovery can be expected from a shallow downturn, the authors said, underlying demographic issues are one cause of the “mis-match” between available workers and available jobs. As younger workers leave the state, jobs are left begging in some industries unless they are filled with workers from out-of-state.In looking at the most recent downturn, it appears that it will have a recovery similar to that following 9/11 than the more severe, for Vermont, recession of 1991. The state took 60 months to regain the jobs lost from the early ’90s recession, while the NEEP report indicates this current recovery will last only 42 months.LINK TO REPORT PDFThe May 2012 Revised NEEP Outlook for VermontExecutive Summary: Vermontâ s proportionally better performance relative to the U.S. and New England economiesduring the â Great Recession’and the subsequently slow national and regional recovery hasVermont on a historically slow labor market recovery track. While a slower rate of recoveryshould be expected for a state that is recovering from a shallower economic trough, it is of littlecomfort to the still too many Vermonters that remain un‐ or under‐employed.o While historically, the pace of Vermont labor market recovery is somewhat strongerthan the Stateâ s labor market recovery from the very harsh early 1990s economicdownturn.o It took state labor markets 60 months to re‐capture all of the labor market ground lostduring that downturn, and this time the pace of the stateâ s labor market recovery looksto be on par with the speed of the labor market recovery for the 2001 recession when ittook 42 months to recover the payroll jobs lost during that downturn. The outlook for the Vermont economy over the calendar year 2012‐16 period is for moderaterecovery followed by moderate growth in the out‐years of the forecast.o If this forecast holds, the state economy will re‐capture all of the statewide payroll jobslost during the â Great Recession’by the 2012:Q3.o This recovery is expected to be fueled by a revival in the global economy,2 good nichepositioning by major Vermont firms to take advantage of that growth, a return tonormally functioning financial markets, and eventual resumption of positive pricemovement in Vermontâ s residential and second home markets. As mentioned above, the payroll job recovery and eventual resumption of payroll job growthwill be historically slow and uneven averaging only about 1.3% per year over the forecast period.o The recovery‐expansion in payroll jobs will hit +2.0 percent annual average in calendar2015, with payroll job growth easing back to an average growth rate of 1.5% in calendar2016. Improvement in the stateâ s unemployment rate will continue at a faster pace than either theU.S. and New England economies as a whole.o Average annual unemployment rate in Vermont is expected to drop over 2 percentagepoints over the calendar 2012‐16 forecast period, settling in at an average annual rateof 3.9% by calendar 2016. Positive job gains are expected in all NAICS supersectors3 under this Spring 2012 NEEP outlookrevision for Vermontâ including the Business and Professional Services sector (at a +3.1%percent annual average over the calendar year 2012‐16 period) and the Construction sector (ata +1.1% percent annual average over the calendar year 2012‐16 period).—————-1 NEEP means New England Economic Partnership.2 Including the avoidance of an economic‐financial implosion in Europe.3 NAICS means North American Industry Classification System. Labor data reported by the Bureau of LaborStatistics is classified by NAICS sector. Public and private reporting agencies follow this paradigm.—————- Near‐term economic prospects and the pace of economic recovery and the eventual resumptionof growth will also continue to be impacted by the lingering effects of Tropical Storm Irene,which hit Vermont at the end of August 2011.o Damage and repair assessments are updated on an ongoing basis in Vermont. Roughly75%, and possibly as high as 90%, of the funds required for repairs is expected to comefrom Federal emergency reliefâ providing a significant and positive economic stimulusto the Vermont economy. Just as for the U.S. and New England regional economies, the Vermont economy facessignificant headwinds as the state moves through the mid‐2000‐teens.o These include a still unfolding European debt, currency, and financial crisis, persistentlyhigh energy‐gasoline prices, a national housing sector that still has not firmly bottomed,and the macro economic implications of a structural federal fiscal imbalance that willrequire extremely deft policymaking to favorably resolve.o Deft fiscal policymaking is something neither major party has recently demonstrated theability to execute. For the greater part of three decades, policy in Vermont has tried to address what many believehas been a significant skills mismatch in Vermontâ s labor markets.o For a number of years, Vermontâ s demographics have indicated that there has been acontraction in the supply of young adultsâ which comprise a vital portion of the modernworkforce.o Employers have reported significant shortages in the supply of individuals with basictechnical or job‐specific skills they require, as evidenced by the high amount ofvacancies in middle‐skill occupations. While it is true that the educational attainment of the over 25 years population in Vermont hasbeen high and continues to rise, this has apparently done little to assist many state employerswith filling the type of jobs employers report as in demand and vacant.o Instead, attainment appears to be on the rise more because a highly educated, olderpopulation is continuing to choose to reside in Vermont, while younger, newlygraduated college degree holders appear to be moving away.o Although this trend seems to be impacting other New England states as well, it is of littlecomfort to state employers who have good job opportunities available but no onereadily available to fill themâ unless they move into Vermont from out‐of‐state. www.vermontbiz.com/files/VT NEEP_forecastoverviewt_05302012_v1.2-1.pdflast_img read more

Battle of the Bills: Lawmakers pass 1 in 7 proposed measures

first_imgby Alicia Freese May 21, 2013 vtdigger.org Vermont lawmakers introduced 713 bills this session, ranging from decriminalizing possession of small amounts of marijuana to naming a state native insect. Fewer than 14 percent of them passed in both the House and Senate. That might sound like a lot of legislation for 180 people working for four months to produce, but their bill-making is on pace to be pretty average this biennium.Lawmakers generally introduce a flurry of legislation during the first year of the biennium, and then the pace slows during the second year. William MaGill, the first assistant clerk for the House, said it’s typical to see 700 bills introduced during the first year and 300 during the second. During the previous five bienniums, the number of bills introduced ranged from 1,100 to 1,047, and the percentage of bills that passed hovered between 17 and 19.6 percent.Dwarfing those figures is the number of drafting requests the Legislature’s lawyers receive. This year, the 16 attorneys fielded 1,349 requests ‘this includes bills and resolutions but it does not count an untold number of amendments.The House introduced 544 bills this year, and the Senate produced 169. The House passed 81 of its own bills, and 63 of those bills also passed in the Senate.The Senate passed about a third of the bills it introduced. Of those 51, the House backed 35.That leaves Gov. Peter Shumlin with a stack of legislation 98 pieces high. He’s signed a few of them into law already, and he hasn’t given any indication about whether he’ll veto any bills.Among the 713 bills6 bills about marijuana;4 bills about dogs;3 bills about skiing;2 bills about drones;2 bills about libraries;1 bill lowering the maximum noise level of motorboats;1 bill prohibiting wiretapping unless all parties agree to it;1 bill prohibiting docking the tails of horses and bovines except under certain circumstances.A number of high-profile issues ended up in Shumlin’s stack ‘’death with dignity,’driver’s licenses for migrant workers, marijuana decriminalization. There were also plenty of bills ‘campaign finance, for instance ‘that ate up a lot of legislative time but didn’t make it to the governor’s desk.Some of the bills that never made it off the shelf still drummed up discussion ‘a total of 10 pieces of legislation, for instance, addressed firearms or ammunition and helped bring the national conversation about gun control to the state level.And then there were bills that didn’t gain any traction at all. Some of these more marginal pieces of legislation reveal the idiosyncratic concerns harbored by Vermont’s lawmakers.Lawmakers showed a particular proclivity for making it easier for veterans and the elderly to hunt and fish.One bill would have set aside five moose permits for Vermonters who have served in the Armed Forces.Another would have allowed people 65 years and older to use all-terrain vehicles to hunt on state lands. A third would allow people in nursing homes or in the care of health care professionals to fish by obtaining a ‘therapeutic group license.’Lawmakers also showed a penchant for designating state things ‘dogs, vegetables, reptiles. There was a push for making the state native insect the tri-colored bumblebee and a bill to designate the Governor Aiken bucktail streamer as the official state fly-fishing lure.There are some among the legislative ranks who think lawmakers should be more discriminatory about drawing up legislation.At the start of the session, Sen. Dick Sears, D-Bennington, offered an amendment to the budget adjustment bill that would have capped the number of bills that individual lawmakers can draft ‘representatives would be cut off after three bills and senators after five.‘Clearly the volume of bills is such that it’s hard to keep up with. I was hoping by highlighting the problem we could at least cut down on the number of bills introduced.’And, the workload this creates for the Legislature’s attorneys, Sears added, is ‘mammoth.’Sears, by his own admission, can be a prolific drafter of bills. He was the primary sponsor of 25 pieces of legislation this year; the average for senators was 5.6.Sears oversees the Senate Judiciary Committee, which, he says, has a high level of bill traffic. By his estimate, from 50 to 60 bills are referred to his committee, while they only have time to take up 10 to 15 of them.last_img read more

State of Vermont to provide technical training for solar project developers and installers

first_imgThe Vermont Agency of Natural Resources, in partnership with the Vermont Public Service Department and the Vermont Agency of Agriculture, Food and Markets will offer a day-long training and informational session on Ground-Mounted Solar Electric Generation Permitting and Siting.  The technical training is intended for solar project installers and developers, including environmental consultants and attorneys who work with solar project developers.  Regional and municipal planners, community energy committees and other groups or individuals interested in learning more about solar siting best practices are welcome to attend. The training will be offered on July 22, 2013 at the Green Mountain Club Headquarters in Waterbury Center, VT and will be free of charge.  The day-long session will cover a broad range of topics, with a particular focus on the State’s wetlands and storm water rules and regulations as they relate to solar project siting ‘ including information and resources related to wetland identification, delineation and avoidance.  In addition to the wetlands and stormwater technical training, the day’s agenda will include guidance for the consideration of: floodplains and river corridors,river and stream buffers,wildlife habitat,rare, threatened and endangered species,perimeter fencing and safety,secondary containment,aesthetics,decommissioning,primary agricultural soils, andthe conservation or current use status of a parcel The training will provide an overview of the Section 248 Public Service Board permitting process, as well as the other collateral permits projects may require from the Vermont Department of Environmental Conservation (DEC).  The session will conclude with a discussion of technical assistance, grants and other incentives available to solar projects. To register or for a complete agenda contact Billy Coster at [email protected](link sends e-mail)Montpelier, VT ‘The Vermont Agency of Natural Resources 7.1.2013last_img read more

Goddard College President Vacarr to leave at end of year

first_imgGoddard College,Goddard College in Plainfield announced Thursday that President Barbara Vacarr will step down at the end of this year.In a news release from the college board of trustees, Vacarr expressed her need to focus on her family. She will help prepare the college for her successor, the release said. Goddard College President Barbara Vacarr will step down on Dec. 31, 2013.Vacarr took over as president in 2010 after a career as a leader in developing innovative programs for adult learners, the release said. Vacarr’s tenure at Goddard has been rocky at times. A February story in Seven Days highlighted faculty opposition to some of Vacarr’s efforts to ‘corporatize’the liberal arts school.According to Seven Days, ‘faculty members complained that teachers haven’t had enough input into the restructuring of various academic programs at Goddard and alleged a ‘pattern of unilateral decision making’at the college.’There were also complaints about Vacarr’s opposition of a union-organizing effort on campus.In Thursday’s news release, Vacarr said, ‘In this challenging time of national economic and enrollment concerns for higher education, I remain focused on the issues paramount to Goddard’s mission. However, I have concluded that I must also pay more attention to the personal challenges facing close family members. Therefore, I look forward to working with the Board in leaving the College moving ahead. I am grateful for the opportunity to lead such a wonderful institution.’The release goes on to quote board chair Andrea Lebron-Clay, ‘Barbara has been tireless in facing the demands of the presidency, whether it has been fundraising in these difficult times or facing the dramatic changes coming in higher education. We are appreciative of her service and wish her and her family all the best for future health and happiness.’The release cited Vacarr’s accomplishments, including the launch of an undergraduate program on the West Coast, the implementation of a diversification plan of revenue and instituting a marketing outreach program to improve Goddard’s visibility in the higher education community.vtdigger.org 7.25.2013last_img read more

Many exchange navigators are frustrated with tech problems

first_imgby Andrew Stein vtdigger.org Organizations charged with helping Vermonters navigate the state’s new health insurance market say its information technology (IT) systems are improving. But they are concerned about how ongoing IT hiccups and delays could affect Vermonters’ ability to enroll in new plans before their current ones expire.This summer, the Shumlin administration doled out $2 million in federal funds to 18 organizations. These so-called navigator groups and their 200-plus navigators are responsible for raising awareness and providing in-person help to Vermonters enrolling in the new health insurance market, called Vermont Health Connect. Navigator groups target different populations, from the uninsured to women to business owners and their employees.While many of these organizations note success on the outreach and education fronts, their effort to enroll Vermonters on new insurance plans has been far less fruitful.Lynn Raymond-Empey runs the Vermont Coalition of Clinics for the Uninsured. The organization supports 10 free clinics across the state and received about $205,000 in navigator funds to target uninsured and underinsured populations.The organization has helped more than 8,000 Vermonters understand the new market and subsidies. The market got off to a rocky start on Oct. 1, and in 2014 the state is requiring all Vermonters buying insurance independently or via businesses with 50 or fewer employees to buy plans on Vermont Health Connect.Part of the coalition’s education campaign includes sitting down individually with the roughly 1,500 Vermonters who seek treatment at its clinics every month.Raymond-Empey said that although the organization surpassed its projections for outreach, its enrollment numbers are far behind schedule due to IT issues.‘In the last week, we began seeing enrollments going through all the way to plan selection,’ she said. ‘The problem is: We’re still having people where we go through the process with them and something happens with the IT in the middle of the application. We lose all of the data and information and end up having to reschedule with that person again.’The payment mechanism that would allow Vermonters to buy plans on the market is not yet functioning, and the state system is not fully connected to the two health insurers that are selling a total of 18 plans on the market ‘ Blue Cross Blue Shield of Vermont and MVP Health Care.‘Everybody had been so focused on this being an online application system and this is the way to go that they hadn’t really put in place a good system for going back to paper applications,’ she said. ‘There wasn’t a good plan B in place. I think they expected to have some issues, but I don’t think they expected the size and the amount of the difficulties just with logging in.’Raymond-Empey’s chief concern is that thousands of lower income, working Vermonters will lose their current plans at the end of the year because the subsidized Catamount and VHAP programs are set to expire on the new year.‘We want this to work,’ she said. ‘We want to have more people insured. We’re doing everything we can to work with the state to problem solve because VHAP and Catamount go away on Jan. 1, and each week or day that goes by that we can’t successfully enroll people, it backs up and makes the demand for our work that much greater.’Raymond-Empey is not alone in her concerns.THE VERMONT CHAMBER OF COMMERCENavigators with the Vermont Chamber of Commerce (from left) Julie McDonough, Laura Doe, Kathy Megrath, Karen Winchester and Shannon Wilson. Photo by Andrew Stein/VTDiggerThe Vermont Chamber of Commerce received the largest navigator grant in the state, worth $260,000. It is teaming up with some of the other 34 chambers across the state to target employers and employees who are required to buy health insurance on Vermont Health Connect.The chamber has an experienced team of health insurance experts that is very familiar with the enrollment and billing systems.For decades, the Vermont chamber has administered a health insurance program for the members of all chambers in the state. The program, VACE Insurance, currently covers about 4,000 small businesses and 18,000 lives. At the end of 2013, it will no longer exist, and those businesses and their employees must buy coverage on Vermont Health Connect.Shannon Wilson, director of finance and insurance for the chamber, said that navigators ‘all along were being told that on Oct. 1, we’d be able to enroll people. There’s only so much time, and the demand has been huge from the business community.’Wilson and the four navigators that work with her are booked solid through the end of November, and they had expected to enroll employers and employees during this time. But the market hasn’t launched as planned.The chamber struggled to even get its navigators logged in to Vermont Health Connect for the first two weeks, let alone enroll businesses. Wilson said the system has improved, but it is still ridden with errors, and one error can cause a business to restart a tedious process from the beginning.Jan. 1 is when the plans of roughly 75,000 Vermonters are set to expire. Wilson and Vermont Chamber President Betsy Bishop say they were already concerned about the short time frame to enroll Vermonters in a completely new market. Add a constant stream of IT blips to the radar, and they say they doubt it is feasible to enroll all of the Vermonters who need insurance by that date.‘The math doesn’t work,’ Bishop said, looking at her navigators’ schedules. The navigators generally meet with employers for four to six hours, and many parts of the enrollment process that were supposed to be automatic are being done manually, she said.‘The math of the days and hours is what’s of concern to us,’ Bishop continued. ‘The initial thought was that many of these folks would be able to go into the system on their own without a navigator. Since the website is not working, we’re getting an increasing workload to help them, but there’s not enough people to do that.’Bishop has consistently advocated in recent years to make enrollment in the market voluntary and provide plans outside of the market. She has thus far been unsuccessful in that push.‘The reason we thought it was really important to be voluntary is because anytime you move a big database, it’s prudent to continue the existing database in the event things don’t go as smoothly as you think,’ she said.She also notes that the Legislature voted for and the governor signed off on a recent bill that included contingency language, which would allow Vermonters to keep their current plans in the event that the market is not functional. She said that language was included for an extraordinary circumstance like the one the state is now experiencing.Republican legislative leaders called on the Shumlin administration to use this measure if the site was not fully functional by Dec. 1, but Gov. Peter Shumlin kept mum on any and all contingency plans at a Thursday press conference.A DIFFERENT TAKE ON BEING A NAVIGATORPeter Sterling, director of the Vermont Campaign for Health Care Security, says he and his group’s two other navigators aren’t as concerned about enrolling Vermonters on Vermont Health Connect.Peter Sterling, executive director of Vermont Campaign for Health Care Security, which has three navigators. Photo by Alan Panebaker/VTDiggerAt the present, they are more focused on raising awareness about the new market and its products than they are about trying to help people actually buy the plans.‘In this first month, 99 percent of the people I’ve talked to are really more interested in information gathering than they are enrolling,’ Sterling said. ‘This is a lot for people to process. Nobody has called me up saying, ‘I need to be enrolled today, why isn’t this happening?’‘Sterling said that he tells those who want to enroll to wait a few weeks for the state to iron out the kinks.‘I want consumers to have a good experience enrolling,’ he said. ‘I don’t want to take the chance of the site crashing.’Sterling and his team are focusing on lower and middle income Vermonters earning up to 300 percent of the federal poverty line. Many of the Vermonters in that group are 18 to 30 years of age.‘The main challenge I encounter is that young people under 30 do not seem interested in receiving information about the exchange,’ he said. ‘Basically, they walk past me. Older people are much more interested.’Sterling says that most people have a low ‘health insurance literacy,’ and he finds that groups of fewer than 10 people are easiest to educate. He spends many days sitting by the Montpelier Department of Motor Vehicles and outside of public libraries.He regularly zigzags the state to meet with Vermonters one-on-one, and he regularly follows up with these residents.‘I would never view it as a waste of time to drive an hour to talk to four or five people,’ he said.last_img read more

DairyVision Vermont supports making farms successful businesses

first_imgOn December 12, a group of dairy farmers and dairy industry representatives met in Montpelier, Vermont for the first board meeting of DairyVision Vermont, a forward thinking program to assist and support dairy farm operations in building successful businesses. ‘ DairyVision Vermont will organize service provider teams composed of experts in all the aspects of dairy operations to work with individual farms to identify and implement steps to enhance profitable dairy production.’ DairyVision Vermont has secured a group of nationally recognized service providers, hired administrative staff and secured funding to launch the program. ‘ Mark Magnan of Magnan Brothers Farm, a Fairfield dairy farmer, and chair of the DairyVision Vermont board, sees the opportunity of the program to grow the Vermont milk supply in an environmentally and financially sound way. Magnan said ‘Farmers are always mindful of the bottom line and we need to balance our production practices with good environmental stewardship. DairyVision Vermont will help us to develop strong businesses and protect Vermont’s natural resources while we do it.’’ Mark Rodgers of Andersonville Farm in West Glover, Vermont’  and vice-chair of the DairyVision Vermont Board’  remarked on the need for a comprehensive approach to farm management. ‘The quality of expertise brought to farms by DairyVision Vermont will grow Vermont’s’  commodity milk industry.’  The management teams will help farmers address all the parts of their farm businesses including crops, animal management and employee management.’  We really need access to the best resources possible as we manage our businesses with an eye on the future.’ ‘ Jo Bradley, Chief Executive Officer of the Vermont Economic Development Authority and DairyVision Vermont board membercommented on the value of the program to the state’s economy. ‘Vermont has invested in the full circle of milk production, from feed producers to milk processors. DairyVision Vermont’s focus on commodity milk production provides support for a vital component of Vermont agriculture, dairy farmers who sell milk to processors. Everything we do to increase the profitably of dairy producers provides value to the entire economy of Vermont.’’ Roger Allbee, a former Vermont Secretary of Agriculture, is supporting this important initiative and will be working with Louise Calderwood, the Executive Coordinator of DairyVision Vermont. ‘When Reg called and asked to me work on development of DairyVision Vermont I knew it was a service that was needed,’ Allbee said. ‘We have a variety of technical assistance programs for farms in Vermont, but DairyVision Vermont is focused on one sector-commodity milk.’ Allbee went on to state that any size farm would benefit from the program and its services would be of equal value to conventional or organic dairy farms, ‘What we are looking for are farmers with forward thinking approaches to their businesses,’ Allbee said.’ Dr. Joe Klopfenstein and Dr. Rick Bartholomew will head up service provider teams consisting of Bruce Dehm, financial analysis; Tom Eaton and Brian Boerman, forage crop production and environmental protection; and Rick Hermonot, human resources management. Klopfenstein and Bartholomew will provide expertise in herd management and production. Dr. Brian Perkins and Dr. Gregory Bethard will serve as advisors to the service provider teams.’ The first round of six farms to enroll in DairyVision Vermont will be selected in early January, 2014 with services scheduled to begin soon after. ‘ DairyVision Vermont will pay for one half of participation in the initial business assessment and plan development and the farm business will pay for the remainder. Following the development of the plan, a three to six month process, farms will continue to utilize the teams of DairyVision Vermont service providers to implement and evaluate the strategies identified during the assessment. Applications for DairyVision Vermont are available from Louise Calderwood by calling 802-586-2239 or e-mailing [email protected](link sends e-mail)’ Financial and in-kind support of DairyVision Vermont has been provided by 15 individuals and organizations including: Ag Venture Financial Services, Agrimark, Andersonville Farm, Chaput Family Farms, Clifford Farm,’  Dairy One, Dairy Farmers of America,’  Dairylea, Magnan Brothers Farm, Miner Institute, ‘ Phoenix Feeds, St. Albans Cooperative Creamery, Vermont Economic Development Authority, Vermont Sustainable Jobs Fund, Vermont Agency of Agriculture and Vermont Agency of Commerce and Community Development.last_img read more

Vermont Chamber of Commerce adds to tourism staff

first_imgThe Vermont Chamber of Commerce has hired Danica Lamos for its Tourism Division. As Tourism Sales and Marketing Associate, Lamos will use her communication and organizational skills to help the Vermont Chamber’s tourism members promote their businesses through the official state tourism guidebooks and Vermont Chamber’s social media platforms. She will also help manage the Tourism Division’s educational programs, such as ServSafe.Lamos was born in Burlington and graduated from Champlain College with a bachelor’s degree in marketing. She enjoys hiking, biking, running, playing golf and improving her snowboarding skills. In 2009, she hiked 154 miles of the Long Trail with her brother, so appreciates the beauty that Vermont offers. Lamos, who will relocate to Waterbury in March, has lived in Vermont her entire life and has yet to find a good reason to leave.Montpelier, VT (January 13, 2014)’ The Vermont Chamber of Commercelast_img read more

Long overdue Farm Bill clears conference on Monday night

first_imgNearly one month after a one-year extension of legislation to protect the nation’s farming, conservation and nutrition programs expired, the US Senate and House of Representatives are poised this week to consider a final, comprehensive agriculture reform bill that will net more than $24 billion in savings, support 16 million American jobs, and make considerable progress in advancing conservation and wildlife protections.’ Vermont’s Senator Patrick Leahy (D), the most senior member of the Senate Agriculture Committee and a member of the conference committee tasked with reconciling differences between the Senate- and House-passed bills, lauded the committee’s work. The Farm Bill will accomplish some of the most far-reaching reform of US agriculture policy in decades.’ ‘After more than a year of needless delays, the Senate and House have come together to do what is so rarely seen in Washington these days: resolve their differences and pass meaningful legislation that will protect the country’s agriculture industry, provide food security for millions of American families, and preserve millions of American jobs,’ Leahy said. ‘This bill is not perfect, and no bill is. But Vermont farmers, conservationists, and Vermont families can now have the certainty they need to plan for the coming years ahead.’’ In the closing hours of the negotiations over the conference report, Leahy negotiated a compromise to protect small dairy farmers in Vermont by securing drastically lower premium rates for Vermont’s small dairy farmers that will help them to better mitigate their risk through a new Margin Protection program for dairy farmers.’  House conferees had rejected the market stabilization program in the Senate-passed bill, then over the weekend also rejected a proposal offered by Leahy to implement a $1 million annual net-payment cap for the new Margin Protection Program for Dairy Producers or to create a new third tier of ‘actuarially sound’ premium rates for those with more than 2000 cows. ‘ The final compromise for lower premium rates for Vermont’s small dairy farms and substantially higher rates for the country’s largest dairy farms was agreed to in the final hours of the Farm Bill negotiations and will result in lower costs for Vermont’s family farms.’  ‘This will keep this program focused on the needs of smaller dairy farms,’ Leahy said.’ ‘The nation’s dairy industry endures more price volatility than almost any other agriculture sector in the country, and small dairy farms like Vermont’s are rightfully concerned about overproduction by larger farms,’ said Leahy.’  ‘It is unfortunate that House conferees rejected Senate-passed efforts to include a practical market stabilization program for dairy, as well as payment caps under the new margin protection program.’  But this compromise, to keep the dairy safety net focused on small farms and not abused by mega-farms, is a good step in the right direction.’’ While the agreement fends off some of the most harmful attacks to the nation’s hunger safety net originally approved by the House of Representatives, Leahy expressed strong disappointment that the final compromise contains more cuts to the Supplemental Assistance Nutrition Program (SNAP) than the Senate-passed measure, especially at a time when so many families continue to struggle to put food on the table, and just a few months after families nationwide saw a cut to benefits.’  Leahy was a lead Senate supporter of an amendment to remove these cuts, and the final bill pulls back from the most extreme cuts passed earlier by the House.’  ‘ The final Farm Bill also includes significant initiatives to encourage better health, increased access to local foods, improved nutrition for children and seniors, and support for programs that promote self-sufficiency and food security in the nation’s low-income communities.’ Leahy ‘ the ‘father’ of the national organic standards and labeling program — also worked successfully for Farm Bill programs to support organic agriculture, conservation and water quality work on farms and agricultural research programs.’  He also again led in winning renewal of the charter for the Rural Economic Area Partnership (REAP) Zone program.’  Vermont’s Northeast Kingdom is one of only three REAP Zones in the country, and the region’s REAP Zone designation has helped bring millions of dollars of improvements to the Northeast Kingdom. ‘ ‘ The House of Representatives is expected to consider the final compromise bill as early as Tuesday, and the Senate is expected to take it up later this week.’  Vermont And The Farm Bill ‘Top-Line HighlightsAt-A-Glance’ Dairy Margin Protection Program ‘ A’ new Margin Protection Program for Dairy Producers will replace the Milk Income Loss Contract (MILC) safety net. This new approach creates a federally subsidized margin protection program that will help dairy farmers to offset low margins caused either by low milk prices or high input costs, and prevent an erosion of equity. A key element of the Senate Farm Bill — the ‘market stabilization’ provision that would have discouraged the over-supply of milk and protected taxpayers from high program costs — was stripped out during the Conference negotiations due to objections from the House leadership.’  Through the final weekend of work on the bill, Leahy negotiated to secure new provisions to help Vermont’s small dairy farms to enroll at higher protection levels, and pay lower premium rates, while creating disincentives for mega-farms from enrolling and boosting production, which would have hurt smaller farms by depressing their market prices.’ ‘This is a new approach that will help farmers weather difficulties and ease the inherent uncertainties of dairy farming,’ Leahy said.’  ‘I felt it important to keep the focus of this new program on smaller farms, and I’m pleased that these late-inning negotiations accomplished that.’’ Dairy Product Donation Program ‘ The Farm Bill creates a new dairy product purchase program that would allow the Secretary of Agriculture purchase dairy products for donation to food banks and other nonprofits that help low-income groups when margins (the difference between the cost of animal feed and farm milk prices) fall below $4 per hundredweight for two consecutive months.’ Organic Certification Cost-Share Program ‘ The 2014 Farm Bill includes mandatory funding for the highly effective organic certification cost-share program.’  This program provides organic farmers and processors with 75 percent of, or a maximum of $750, toward the cost of their organic certification.’  Senator Leahy ‘ the ‘father’ of the national organic standards and labeling program ‘ noted that the organic agriculture continues to thrive as one of the fastest growing sectors of the agricultural economy.’  But he notes that continued demand growth threatens to outstrip U.S. organic supplies, encouraging a rise in imported organic products.’  This program will help farmers who want to undertake the costly transition to organic production to do that.’  Senator Leahy helped defeat attempts to eliminate this program, which has had a significant impact on the nation’s small farmers and can help to expand U.S. organic production.’  ‘We want U.S. organic agriculture to continue to thrive, and this will help,’ he said.’  ‘ Supplemental Nutrition Assistance Program ‘ ‘ Deepest House Cuts Removed — The Farm Bill has long supported the hunger safety net through the Supplemental Nutrition Assistance Program (SNAP).’  With so many Americans struggling to put food on the table, nutrition assistance and emergency assistance programs have become even more crucial.’  In Vermont more than one in five children and nearly one in seven households are food insecure, leaving families to rely on federal and state programs such as SNAP (renamed 3SquaresVT in Vermont), WIC, and the federal School Lunch and Breakfast Programs. Enrollment in 3SquaresVT has nearly tripled over the last decade, with more than 100,000 Vermonters now receiving benefits.’ The final Farm Bill does not include many of the harmful provisions and deep cuts included in the House-passed legislation.’  The conference agreement removes the House provisions that would have arbitrarily eliminated eligibility for millions of Americans and made the program more onerous for states to administer.’  ‘ ‘ Healthy Food Initiatives ‘The Farm Bill contains initiatives to encourage better health, increased access to local foods, improved nutrition for children and seniors, and support for programs that promote self-sufficiency and food security in the nation’s low-income communities. Specifically, these provisions include $100 million in mandatory funding to help bring healthy food to underserved communities; initiatives to encourage purchases of fruits and vegetables by SNAP consumers at retail outlets, including farmers’ markets and food hubs; support for food banks; allowing SNAP recipients to use their benefits to purchase a Community Supported Agriculture (CSA) share; and a pilot program to support bringing local food into schools.’ Vital Consumer Information ‘ The final bill eliminates the House provision that sought to place limits on the Country-Of-Origin Labeling (COOL) law that requires labels on packages of beef, pork, poultry and lamb sold in U.S. stores to carry specific information on the source of the meat. This law helps shoppers make informed decisions on their meat purchases.’ Improves Crop Insurance for Beginning Farmers ‘ The Farm Bill would give beginning farmers and ranchers a 10 percentage point discount for all crop insurance premiums. The bill also provides beginning farmers and ranchers with an improved production history when they have previous farming experience or when they face natural disasters.’ Crop Insurance for Specialty Crops and Organic Agriculture ‘ The 2014 Farm Bill expands risk management for specialty crops, organics, and underserved commodities by providing authority for the development of improved risk management tools. ‘ Regional Equity Program ‘ This program, which Senator Leahy initiated in the 2002 Farm Bill, helps bring more conservation resources to Vermont and other Northeastern states. The 2014 Farm Bill extends this program so that Vermont and other small states receive a fair distribution of USDA conservation funds. ‘By guaranteeing that each state receives a minimum share of program funding, the Regional Equity Program ensures that no state is left out in the cold and that Vermont will continue to get its fair share of conservation dollars to help farmers and Vermont’s environmental resources,’ said Leahy.’ Regional Conservation Partnership Program ‘ This new program is the result of the consolidation of the four existing regional programs into one new program that will support projects that improve soil quality, water quality, or wildlife habitat in specific areas or regions across the country.’  Projects for this new program will be selected through a competitive, merit-based process, and producers will be encouraged to leverage partner resources to achieve common goals.’  Within the program is a Critical Conservation Area component that funds projects in areas with particularly significant water quality and quantity issues, facing natural resource regulatory pressures.’  Leahy sees this new program as a great fit for Lake Champlain and the vital water quality work taking place in Vermont.’ REAP Zone Program Reauthorized ‘ Senator Leahy fought to continue the Rural Economic Area Partnership Zone initiative that has been so successful in Vermont’s Northeast Kingdom.’  REAP Zones set collaborative and citizen-led efforts to stimulate economic development.’ Northern Border Regional Commission ‘ The Northern Border Regional Commission was created in the 2008 Farm Bill with Leahy’s support.’  Since being funded for the first time two years ago, Vermont organizations have received more than $500,000 to spur economic development and job growth in Vermont’s six northern-most counties.’  The 2014 Farm Bill reauthorizes the program for five years and includes administrative improvements to make the program more effective and efficient. ‘ Forest Legacy And Community Forests ‘ The final agreement rejects House provisions that would have severely limited funding for these two private forestry programs ‘ originated in earlier farm bills by Senator Leahy ‘ that have helped to permanently conserve tens of thousands of acres of Vermont forestland.Vermont Farm Bill Details’ Dairy and LivestockDairy Margin Protection Program – The final Farm Bill creates a new Margin Protection Program for Dairy Producers to replace the Milk Income Loss Contract (MILC) safety net. This new approach creates a federally subsidized margin protection program that will help dairy farmers to offset low margins caused either by low milk prices or high input costs, and prevent an erosion of equity.’  Unfortunately a key element of the Senate Farm Bill, the market stabilization’ provision that would have discouraged the over-supply of milk and protected taxpayers from high program costs was stripped out during the Conference negotiations due to objections from the House leadership.’  ‘I am disappointed that the final Farm Bill does not include the new Stabilization Program to help us break the harmful cycle of volatile milk prices, when supply and demand get too far out of sync.’  However, I am pleased that we were able to make improvements to the Farm Bill to help Vermont’s small dairy farms enroll at higher protection levels, while also creating some potential disincentives for the nation’s mega-farms from enrolling.’ said Leahy.’ Dairy Product Donation Program ‘ The Farm Bill creates a new dairy product purchase program that would allow the Secretary of Agriculture purchase dairy products for donation to food banks and other nonprofits that help low-income groups when margin (the difference between the cost of animal feed and farm milk prices) falls below $4 per hundredweight for two consecutive months.’ King Amendment Removed ‘ The final Farm Bill rejects the House provision that sought to limit the ability of states and local governments from regulating the production and manufacture of agricultural products in other states. Targeted at the strict animal welfare standards in California, this amendment would have forced states like Vermont to allow the sale of a product that meets federal standards even if it does not meet the state’s standards. Chairwoman Stabenow, Senator Leahy, and many others fought to stripe this dangerous language from the final bill. ‘ Fair Competition ‘ The 2014 Farm Bill rejects the House provision to obliterate the farmer and rancher protections provided by the Packers and Stockyards Act through USDA’s Grain Inspection, Packers & Stockyards Administration (GIPSA). As farmers face growing consolidation in the livestock sector, it is critical that the Secretary of Agriculture is able to address deceptive, fraudulent, retaliatory, and anti-competitive practices by meatpackers and poultry companies. Senator Leahy has remained strongly committed to fighting anti-competitive and unfair business practices that have become commonplace in the livestock and poultry sectors across the country.’ Livestock & Supplemental Disaster Program – The bill extends supplemental disaster assistance for producers whose livestock has been affected by high mortality rates caused by severe weather, disease, or other acts of nature. Additionally, it provides assistance to livestock producers who have experienced grazing losses due to drought, as well as assistance for recovery from natural disasters that destroy grazing land, honey bees, farm fish, orchard trees, and nursery trees.Commodities and Crop Insurance’ Eliminates Direct Payments — Direct Payments, Counter-Cyclical Payments, the Average Crop Revenue Election Program, and the Supplemental Revenue Assistance Payments Program are repealed, creating over $10 billion in savings for deficit reduction.’ Improves Crop Insurance for Beginning Farmers ‘ The Farm Bill gives beginning farmers and ranchers a 10 percentage point discount for all crop insurance premiums. The bill also provides beginning farmers and ranchers with an improved production history when they have previous farming experience or when they face natural disasters.’ Crop Insurance for Specialty Crops and Organic Agriculture ‘ The 2014 Farm Bill expands risk management for specialty crops, organics, and underserved commodities by providing authority for the development of improved risk management tools. The bill requires that the Farm Service Agency and the Risk Management Agency share information and encourages correction of errors in order to ensure accuracy of reported information.’ Non-Insured Crop Disaster Assistance Program (NAP) ‘ The 2014 Farm Bill includes Senator Leahy’s ‘Buy Up’ provision that will patch the hole in the safety net for producers of non-insurable crops, such as certain fruits and vegetables. For these producers, the level of risk protection they are currently provided under NAP only protects them from losses that could put them out of business. NAP was invaluable to Vermont producers after the devastating flooding of Tropical Strom Irene, but it would have been ineffective for less cataclysmic losses. Senator Leahy’s NAP Buy Up provision will allow the program to continue to offer the catastrophic-level coverage, but also gives producers the opportunity to elect higher coverage levels, which they pay a premium for based on the value of their production.’ Conservation and EnvironmentRegional Equity Program ‘ This program, which Senator Leahy initiated in the 2002 Farm Bill, helps bring greater conservation resources to Vermont and other Northeastern states. The 2014 Farm Bill extends this program so that Vermont and other small states receive a fair distribution of USDA conservation funds. ‘By guaranteeing that each state receives a minimum share of program funding, the Regional Equity Program ensures that no state is left out in the cold and that Vermont will continue to get its fair share of conservation dollars to help farmers protect Vermont’s environmental resources,’ said Leahy.’ Environmental Quality Incentives Program (EQIP) ‘ Established in the 1996 Farm Bill with the help of Senator Leahy, EQIP provides financial and technical assistance to farmers to implement conservation practices. This program has helped farmers control the nitrogen and phosphorus runoff that has contributed to toxic algae blooms in Lake Champlain. The 2014 Farm Bill funds EQIP at over $1.6 billion a year.’ Agricultural Lands Easement (ALE) Program ‘ The 2014 Farm Bill combines the Farmland Protection Program and the Grassland Reserve Program to create the new ALE Program. Operating through state and local partners, the ALE program provides permanent protection for working agricultural lands.’  Senators Leahy and Bennett offered an amendment, which was accepted during the Agriculture Committee markup, to allow greater flexibility for eligible entities to meet the financial matching requirements and to ease the determination for wetland easements. ‘This is a big step toward keeping viable working farms in business over the long term and ensuring that beginning farmers and ranchers are able to participate in the program,’ said Leahy. ‘ Compliance for Crop Insurance ‘ The longstanding policy of requiring farmers to maintain a minimum level of conservation on highly erodible land and to preserve wetlands in exchange for federal benefits is continued in this Farm Bill. However, with the elimination of direct payments, conservation compliance is now linked to crop insurance subsidies rather than direct payments.’  This slight modification is nothing new for the majority of farmers, who are already in compliance because of the direct payment benefits they received last year. In Vermont, participation in the current dairy support system also requires compliance with conservation programs, which has resulted in significant improvements to Vermont’s water quality and a reduction in environmental damage. ‘ Sodsaver ‘ This program is an important measure for protecting the nation’s native grass and prairie lands. The sod saver provision expands protection of native grasslands to additional prairie pothole states.’  Sodsaver seeks to protect our quickly disappearing native grasslands that are causing significant impacts on ranchers, hunters, rural communities and wildlife. ‘ Conservation Innovation Grants (CIG) ‘ Provided on a competitive basis to encourage the development of new or improved conservation practices, CIG is geared toward projects that offer new approaches to providing producers environmental and production benefits. The Farm Bill added a new reporting requirement to increase program transparency.’ Regional Conservation Partnership Program ‘ This new program is the result of the consolidation of the four existing regional programs into one new program that will support projects that improve soil quality, water quality, or wildlife habitat in specific areas or regions across the country. Projects for this new program will be selected through a competitive, merit-based process, and producers will be encouraged to leverage partner resources to achieve common goals. Within the program is a Critical Conservation Area component that funds projects in areas with particularly significant water quality and quantity issues facing natural resource regulatory pressures. This new program would be a great fit for Lake Champlain and the important water quality work taking place in Vermont.’ Congressional Mandated Use of Science ‘ The 2014 Farm Bill rejects the House amendment that would undermine federal agencies’ ability to use scientific processes in policy decisions. Senator Leahy supports scientific innovation and will continue to fight against efforts to limit important research.’ Hunger Safety Net’ Supplemental Nutrition Assistance Program ‘ The Farm Bill has long provided our nation’s hunger safety net through the Supplemental Nutrition Assistance Program (SNAP).’  With so many Americans struggling to put food on the table, nutrition assistance and emergency assistance programs have become even more crucial. In Vermont, more than one in five children and nearly one in seven households are food insecure, leaving families relying on federal and state programs such as SNAP (renamed 3SquaresVT in Vermont), WIC, and the federal School Lunch and Breakfast Programs. Enrollment in 3SquaresVT has nearly tripled over the last decade, with over 100,000 Vermonters now receiving benefits.’ Healthy Food Initiatives ‘The Farm Bill contains initiatives to encourage better health, increased access to local foods, improved nutrition for children and seniors, and support for programs that promote self-sufficiency and food security in the nation’s low-income communities. Specifically, these provisions include $100 million in mandatory funding to help bring healthy food to underserved communities; initiatives to encourage purchases of fruits and vegetables by SNAP consumers at retail outlets, including farmers’ markets and food hubs; support for food banks; allowing SNAP recipients to use their benefits to purchase a Community Supported Agriculture (CSA) share; and a pilot program to support bringing local food into schools.’ Deepest Cuts to SNAP Removed ‘ The final Farm Bill does not include many of the harmful provisions and deep cuts included in the House-passed legislation.’  The conference agreement removes the House provisions that would have arbitrarily eliminated eligibility for millions of Americans and made the program more onerous for states to administer.’  ‘ ‘ Pilot Program to Bring Local Food into our Schools ‘ The bill allows up to eight pilot states the flexibility to purchase more local fruits and vegetables through the Department of Defense Fresh Program by prompting USDA to take geographic locations into account when purchasing foods for this program.’ ‘  If successful, this could be implemented nationwide to ensure fruits like apples won’t be too ripe by the time they reach students in rural areas.’ Preserves SNAP Nutrition Education ‘ It is no coincidence that Vermont was rated the second healthiest state in the nation for 2013.’  The Farm Bill helps Vermonters to stay healthy by maintaining current funding levels to help eligible SNAP recipients learn how to eat healthily and maintain an active lifestyle on a limited budget.’  This program has seen increased interest in Vermont in recent years as the program helps teach families how to make healthy food choices and get the most nutrition out of their limited food budget.’ Continues Employment and Training Program ‘ The 2014 Farm Bill is focused on helping Vermonters find jobs by continuing Employment and Training activities.’ Local Foods, Organic Agriculture, and Food Safety’ Organic Certification Cost-Share Program ‘ The 2014 Farm Bill includes mandatory funding for the highly effective organic certification cost-share program. This program provides organic farmers and processors with 75 percent, or a maximum of $750, toward the cost of their organic certification.’  Senator Leahy ‘ the ‘father’ of the national organic standards and labeling program ‘ noted that the organic agriculture continues to thrive as one of the fastest growing sectors of the agricultural economy.’  But he noted that continued demand-growth threatens to outstrip U.S. organic supplies, encouraging a rise in imported organic products.’  This program will help farmers to undertake the costly transition to organic production.’  Senator Leahy helped defeat attempts to eliminate this program, which has had a significant impact on the nation’s small farmers and can help to expand U.S. organic production.’  ‘We want U.S. organic agriculture to continue to thrive, and this will help,’ he said.’  ‘ Organic Data Initiatives Program ‘ The 2014 Farm Bill continues the organic data initiatives program at USDA for important national data collection about the organic sector. The bill also directs the Secretary of Agriculture to collect data on the production and marketing of locally or regionally produced agricultural food products, facilitate interagency collaboration and data sharing on programs related to local and regional food systems, and evaluate the success of current local promotion programs.’ Farmers Market and Local Food Promotion Program ‘ The Farm Bill expands this program which has yielded widespread success and participation throughout Vermont. Funding for the Farmers Market and Local Food Promotion Program is crucial to the growing number of Americans who look to local farmers to supply healthy food.’  It will be important to Vermont’s Farm to Plate initiative. Senator Leahy said, ‘The Farmers Market and Local Food Promotion Program results in improved local food hubs and supports farm to plate initiatives like the ones that are thriving in Vermont.’ One success story among many is Vermont Farm-to-School Inc., in Newport. In 2011, this organization received funds from the program to launch a new mobile farmers’ market.’ Promoting Maple Syrup Research and Marketing ‘ The new ACER Access and Development Program is authorized by the 2014 Farm Bill to provide grants to support the domestic maple syrup industry through promotion of research and education related to maple syrup production, promotion of natural resources sustainability in the maple syrup industry, market development for maple syrup and maple-sap products, and encouragement of private land owners to initiate or expand maple-sugaring.’ Specialty Crop Block Grants ‘ The 2014 Farm Bill includes a healthy increase in funding for Specialty Crop Block Grants. This program enhances the competitiveness of specialty crop groups by promoting local and regional farm and food system specialty crop development within each state. These grants can be used to enhance state and regional marketing programs, direct-to-consumer and direct-to-store marketing, access to specialty crops for low-income consumers, food hubs, and new-farmer specialty crop development.’ Appropriate Technology Transfer for Rural Areas ‘ The Farm Bill reauthorizes the National Sustainable Agriculture Information Service, an important program that awards competitive grant funding to national non-profit organizations that provide agricultural producers information on input cost reduction, conservation of energy resources, and expansion of markets through the use of sustainable farming practices.’ Combats Pest and Disease Focusing on Early Detections ‘ The Farm Bill reauthorizes and consolidates two very effective programs, the Plant Pest and Disease Management and Disaster Prevention Program and the National Clean Plant Network. Detecting and responding to a plant pest or disease in the early stages of its introduction saves taxpayer dollars and minimizes the potentially devastating impact on Vermont’s farms and forests.’ Agricultural Management Assistance (AMA) ‘ Senator Leahy continues to fight hard for AMA to better serve Vermont’s organic farmers. AMA helps producers develop sustainable practices that protect their farmland and ensure that the health of our shared water systems is protected. This program is especially important when major storms, such as Tropical Storm Irene, devastate a landscape, erode soil and spread contaminants into the water system. AMA lessens the toll of natural disasters like Irene, paying long-term dividends and greatly reducing future mitigation costs.’ Research’ Organic Research Initiative ‘ The 2014 Farm Bill reauthorizes the Organic Research and Extension Initiative and provides $20 million a year in mandatory funding.’ Foundation for Food and Agriculture Research ‘ The Farm Bill creates a new non-profit foundation, the Foundation for Food and Agriculture Research, to leverage private funding, matched with federal dollars, to support agricultural research. This innovative approach will foster continued innovation in agricultural research, and the Farm Bill authorizes $200 million a year for the foundation.’ Addressing Shortages of Veterinarians — The bill would help address the shortage of veterinarians in rural agricultural areas by supporting veterinary education and rural recruitment.Continues Specialty Crop Research ‘ The Farm Bill provides $55 million in mandatory funding for the Specialty Crop Research Initiative, ensuring funding will be available for key research projects for fruits, vegetables and other specialty crops. The bill also ensures that funding will be available for this program in the next Farm Bill.’ Hemp Research ‘ The 2014 Farm Bill authorizes institutes of higher education to cultivate hemp for agricultural purposes or for academic research.’ National Oilheat Research Alliance (NORA) – The Farm Bill reauthorizes NORA, a collaborative program established by the oilheating industry to strengthen and improve the industry through education and training for employees, providing consumers with information on how they can increase efficiency and reduce their environmental impact, and developing new products for consumers.’ Rural Communities’ Leahy Gigabit Pilot Program ‘ The 2014 Farm Bill establishes a new pilot program to fund gigabit projects in rural areas. While it is important that the broadband program focus on truly unserved areas, Leahy believes that it is vital to ensure that investments are also made in networks that will not become obsolete within the next few years. Gigabit Internet is spreading to cities across the country and this pilot will allow USDA to test out investment in gigabit networks in rural areas before rural America falls further behind. To learn more, click here. ‘ State Rural Development Councils ‘ When the Senate considered the Farm Bill in 2012, Senator Leahy offered an amendment to continue the authorization for State Rural Development Councils. The Senate passed the Leahy amendment with bipartisan support and this language was included in the 2014 Farm Bill. Reauthorization of these effective and efficient councils will allow them to continue their important work of strengthening rural communities in Vermont and across the country.’ Encourages Rural Entrepreneurship ‘ The 2014 Farm Bill reauthorizes the Rural Microenterprise Assistance Program that provides entrepreneurs in rural areas with the skills necessary to establish new businesses and continue operation of existing rural microenterprises. The program awards grants to microenterprise development organizations to provide training, business planning assistance, market development assistance, and other services to rural businesses. This program also awards funding for the establishment of microloan programs designed to support entrepreneurs in rural areas.’ Water, Waste Disposal and Wastewater Facility Grants and Loans ‘’  This program provides grants, loans and loan guarantees to public agencies for projects that support the development, storage, treatment, purification, or distribution of water or the collection, treatment, or disposal of waste in rural areas’ Rural Energy for America Program (REAP) ‘ This extremely popular program has helped many Vermont farms and sugarmakers lower their energy bills through the installation of energy efficiency and renewable energy projects, including methane digesters. The Farm Bill simplifies the application process for farmers and rural businesses applying for small and medium sized projects. The Farm Bill includes $50 million in mandatory funding each year for REAP, with an additional authorization of $20 million in discretionary funding.’ Community Wood Energy Program ‘ The Farm Bill reauthorizes the Community Wood Energy Program which is designed to provide competitive, cost-share grants for communities to supply public buildings with energy from sustainably-harvested wood from the local area.’ Animal Fighting Spectator Prohibition ‘ The Farm Bill recognizes that animal fighting spectators, through their attendance, admission fees, and wagers are active participants in and enablers of these cruel criminal enterprises. The bill creates federal criminal penalties for any individual who knowingly attends or knowingly brings a minor under the age of 16 years old to one of these violent events. This provision will address the challenge that law enforcement faces when a fight is raided and the organizers, promoters, trainers, and owners are able to disperse and blend into the crowd to escape arrest.’ REAP Zones ‘ Senator Leahy has fought to continue the Rural Economic Area Partnership (REAP) Zone initiative that has been so successful in Vermont’s Northeast Kingdom. REAP Zones set up collaborative and citizen-led efforts to enhance economic development. This effort is a great model for building a new rural economy that other rural areas are sure to emulate.’ Northern Border Regional Commission ‘ The Northern Border Regional Commission was created in the 2008 Farm Bill with the support of Senator Leahy. Since being funded for the first time two years ago, Vermont organizations have received more than $500,000 to spur economic development and job growth in Vermont’s six northern-most counties. The 2014 Farm Bill reauthorizes the program for five years and includes administrative improvements that will make the program more effective and efficient.’ Forestry’ Forest Legacy and Community Forests ‘ The 2014 Farm Bill rejects the House provisions that would have severely limited the authorized funding levels for these two indispensable private forestry programs ‘ originated in earlier Farm Bills by Senator Leahy — that have helped to permanently conserve tens of thousands acres of Vermont forestland.’ Addresses Insect and Disease Infestations ‘ The nation’s forests experiencing epidemic levels of insect infestations and New England is facing threats from the Asian longhorned beetle and the Emerald Ash Borer. The bill focuses on areas and watersheds where help is needed most to improve or protect forest health. ‘ Forest Stewardship Contracting ‘ The Farm Bill reauthorizes this effective tool for land management that allows the Forest Service to conduct important restoration work to improve the health of our nation’s forests and has been responsible for important forest work in Vermont’s Green Mountain National Forest.’ International Food Aid & Agricultural Trade Promotion ‘ Market Access Program – This program is reauthorized and provides important matching funds to promote U.S. agricultural products in overseas markets. MAP has been an important tool for the dairy industry and U.S. cheese producers looking to market products abroad.’ Foreign Market Development Program ‘ The Farm Bill reauthorizes this key trade program that provides matching funds to nonprofit commodity or trade associations to aid in the long-term expansion of export markets for U.S. agricultural products. This program has helped to create, expand, and maintain foreign markets for U.S. dairy exports.’ Local and Regional Food Aid Procurement ‘ Recognizing the importance of flexibility to respond to changing food aid needs the 2014 Farm Bill expands on the success of a pilot program from the 2008 Farm Bill, Local and Regional Food Aid Procurement allows organizations to purchase food through local and regional markets. This promotes stability by supporting local producers and economies. ‘ Prepositioning – The bill increases the amount of funds available to support strategic prepositioning, which brings food aid commodities to at-risk regions before food emergencies strike.’ Food for Peace ‘ The largest food aid program under the Agriculture Committee’s jurisdiction, Food for Peace provides for emergency aid and non-emergency development projects. This notable program enables the U.S. to donate food overseas to promote food security and the 2014 Farm Bill reauthorizes the program and makes important reforms that will improve the U.S. response to crisis.’ McGovern-Dole ‘ The McGovern’Dole International Food for Education and Child Nutrition Program facilitates distribution of food commodities through schools in developing countries through partner organizations to improve food security, reduce hunger, and improve literacy in low income and food deficit countries. The program has projects in over 40 countries and feeds about 5 million children in need every year.WASHINGTON (MONDAY p.m., Jan. 27, 2014) ‘Leahy’s officelast_img read more

Governor Shumlin talks taxes, education reform and Medicaid in sprawling budget speech

first_imgVermont Business Magazine Governor Peter Shumlin took to the podium before a joint meeting of the Legislature in the House Chamber this afternoon to outline plans to increase Medicaid payments to providers, with the help of a $90 million payroll tax on every employer; to close a loophole in the income tax of $15 million to help pay off a $94 million budget shortfall in order to balance the FY 2016 Vermont state budget; and to use a carrot-and-stick approach to find a way to increase public education quality while lowering property taxes. He did not explicitly enunciate an immediate way to lower property taxes, but hopes that local communities and the state can develop a partnership to do so. To that end, he suggested the state offer $3 million carrot to help schools consolidate, while at the time holding a stick to ensure that local districts could be forced to close schools if standards are not met. Shumlin acknowledged, to some laughter from legislators, that they might not all agree with such a tactic, but urged them to keep an open mind to every possible solution, because, he warned, if lawmakers do not find a way, voters will take action.Broadcast live streaming video on Ustream(link is external)VERMONT PBS VIDEO. TEXT OF THE ENTIRE ADDRESS IS PRESENTED BELOW.In a detailed address outlining many of the important issues he will seek to address this legislative biennium, Shumlin outlined his fiscal year 2016 budget and Part II of his Agenda for Progress to grow jobs, expand affordability and preserve quality of life for Vermonters.While his proposal to outlaw teachers strikes, as part of the carrot and stick approach to public education, is probably a non-starter in a Democratically controlled Legislature (and it’s doubtful the Legislature even has jurisdiction over a process with federal oversight), and while the cut in low-income heating assistance likewise will probably not see the light of day in any committee room, the Medicaid funding likely will get at least a hearinig. The governor’s single-payer plan wilted under the garrish light of new taxes, which included a massive payroll deducation. But this proposal of a seven-tenths of 1 percent tax (0.7%) on every business will be enticing for two reasons. One is that a bit more than half of the $90 million raised will come from a federal match. And two, it helps lessen a growing problem of cost-shifting to cover Medicaid patients, while providing more incentive for primary care physicians to take on Medicaid patients. The pushback from business might not be as bad as one might anticipate because small businesses who now offer health insurance to their employees could be — and this is how Shumlin presented — less burdened for “doing the right thing” by their employees by covering some or all of their premiums, as less money is needed to be cost-shifted from privately covered individuals.In addition to a balanced budget that closes a $94 million budget gap, the Governor laid out the rest of his aggressive agenda that includes proposals to cut in half the Medicaid cost shift; reduce private health insurance premiums; help get school spending under control; eliminate the cost of an associate’s degree for some Vermont students and provide Vermont employers a pipeline of skilled workers; and increase economic development incentives.All of these proposals are designed to help working Vermonters by growing jobs and economic opportunity for the state.“When you listen to the voices of so many Vermonters, from every corner of our state, from every background, and of every political persuasion, their frustration and uncertainty about their future is clear,” the Governor said.  “We know many of the drivers of this unease: Rising health care costs and rising property taxes, among others, and no corresponding rise in incomes and property values. Many hardworking Vermonters who would be proud to call themselves members of the middle class are left with a feeling that they are treading water or, worse, dipping below the surface.”FISCAL YEAR 2016 BUDGETREACTIONVermont Tech President Dan Smith’s Response:“We are pleased that the Governor has highlighted this strategy. In establishing these employer partnerships, we can align existing state programs in a manner that can help Vermont employers build a pipeline of new workers, at a time when the manufacturing sector in particular reports a workforce that is both aging and scarce. These are good clean jobs and this is an affordable way to attain the necessary degree.This summer, as the state began to frame out the Vermont Strong Scholars program passed in the last legislative session, we recognized an opportunity for alignment between two state programs. A Vermont student, in a Vermont Strong eligible program like mechanical or electrical engineering technology, or software engineering, who enrolled in the Vermont Academy of Science and Technology at Vermont Tech, could be eligible to have tuition for three out of the four semesters of an associates’ degree covered by the state.     The Vermont Academy of Science and Technology (VAST) has been run by Vermont Tech for twenty years and offers Vermont students an alternative senior year of high school, concurrent with their first year of college. The college accepts a discounted tuition rate, paid by the state of Vermont, for VAST-enrolled students. The state pays roughly 3/4 and the college subsidizes by 1/4. Students pay room and board if they live on campus. There are currently 48 students enrolled in VAST at Vermont Tech.The Vermont Strong Scholars program was passed by the legislature last year and it created an obligation for the state to cover the loan forgiveness as envisioned in the program. The Agency of Commerce narrowly crafted the eligible sectors to prioritize key industries and enable accurate projections and manage the scope of the liability. As students complete the program and get reimbursed over time, the state will carry that obligation. The state’s current plan is to work with VSAC to administer the loan forgiveness aspects of the program,” said Dan Smith, the President of Vermont Tech. “If an employer, thinking long term about their workforce in Vermont, is willing to work together with us to recruit, provide an internship and a scholarship to these incoming students, these students can attain an associates’ degree tuition-free.”For more information about the Vermont Academy of Science and Technology, please visit: http://www.vtc.edu/academics/vermont-academy-science-technology-vast(link is external)Lieutenant Governor Phil Scott:“I was encouraged to hear the Governor acknowledge the fact that we are, and have been, spending beyond our means. There was a lot of information in the speech, and it will take some time to gather the facts before delving into too many specific details. For example, during the speech I was having difficulty adding up the cuts proposed versus the additional taxes levied.“There were a number of areas within the speech where I do have concerns, one being that, while I agree we have a structural problem with the Medicaid cost shift, I’m hesitant to fund the ‘fix’ through a payroll tax. Opening the door to even a small increase will, in my opinion, lead us to further tax growth. Once that seed is planted, we have a tendency in this building to over-fertilize, and I fear there will be further proposals to increase taxes on Vermonters and small Vermont businesses, who are already struggling to make ends meet. I am also concerned the Governor may be overly optimistic in regard to negotiating $9 million in savings with the Vermont State Employees Union, as well as the sustainability of leveraging state dollars in order to receive what could be one-time federal money.“However, growing partnerships with Vermont businesses which will in turn grow the workforce, forging a new partnership with Vermont Technical College, and imposing a moratorium on unfunded school mandates are good first steps toward turning the receding fiscal tide.“Affordability, finding ways to grow our economy, and listening to Vermonters must be our top priorities from this day forward. This is something I’ve been talking about for a number of years, and I am thankful that it seems the Governor is in agreement.”House Speaker Shap “The Governor’s budget reflects the tough choices we have to make due to slower than expected revenue growth. In his address, the Governor acknowledged Vermonters’ concerns about the unsustainable cost of health care, burdensome property tax increases, and the need to clean up our waterways. As I noted in my opening session remarks, these are the key priorities of the House. I look forward to working with the Administration to make Vermont the best possible place to work and live, and one that provides opportunity for all Vermonters.”Vermont Association of HospitalsThe Vermont Association of Hospitals and Health Systems welcomed the Medicaid funding plan that Governor Shumlin outlined in today’s budget address, which is a strong step toward making health care more affordable for Vermonters.The plan, as outlined by the Governor, would put significant resources toward addressing what is referred to as the “Medicaid cost shift.” In today’s system, Vermonters who buy insurance on the market have been paying higher rates to make up for shortfalls in the Medicaid program.”As we look to the future of health care reform, a key component of that work is bringing down the cost of care for Vermonters. Reducing the cost shift as Governor Shumlin proposed today is essential to making health care more affordable in our state,” said Bea Grause, CEO and President of VAHHS. “We are committed to working with the Green Mountain Care Board and other health care leaders to make sure that this improvement in Medicaid payments directly benefits Vermonters who purchase insurance.”VAHHS reinforced its commitment to meaningful health care reforms.”The work to reform health care and make it more affordable for Vermonters continues,” Grause added. “Physicians and hospitals are good at taking care of the sick and the injured and that’s work we need to keep doing. At the same time, we need to do a better job helping people stay as healthy as possible. By leading on payment reform, we will make progress this year toward a system where every Vermonter has coverage they can afford, and gets high quality care from the doctor and hospital of their choice.”NFIB/VTThe following statement may be attributed to Shawn Shouldice who serves as NFIB/VT’s State Director in response to Governor Shumlin’s Budget address. “The National Federation of Independent Business (NFIB/VT) couldn’t agree more with Governor Shumlin that government should live within a budget equal to (or less than) the rate of inflation. We agree, Vermont must eliminate the cost-shift related to health care. We agree that double digit property tax increases should be addressed, that our economy requires a highly trained workforce and that there as some economic green shoots beginning.“However, NFIB/VT was hoping to hear the promotion of visionary plans from Governor Shumlin for how he would address affordability in Vermont. Rather we heard more of the same; tax increases on businesses, an over-reliance on federal dollars to expand programs, and financial incentives for certain sectors of our economy in hopes of minimizing public criticism.“Access to affordable high-quality health care remains NFIB/VT’s top priority. Governor Shumlin promised to remove the burden of health care from Vermont employers; rather he shifts more and more of the burden to small business. We find an increased payroll tax an insult to our intelligence.“Small businesses already pay an employer assessment to fund Vermont Health Connect (formerly Catamount Health Plan) to the tune of $18 million per year. Now, Governor Shumlin proposes an additional $90 million increase.“On December 17, we applauded Governor Shumlin’s announcement that he would push aside his $2 billion single-payer scheme because he understood the enormous cost would have a negative impact on our economy. Today he said, in his opening remarks, that he’s ‘heard clearly in the election this fall that Vermonters expect more from me and from the state to help improve their lives’. Rather we find instead his calling for more regulation, higher state spending and increased taxes.“Small businesses in Vermont represent 96% of all businesses, while we see some green shoots in our economy; most are still struggling under the high costs of owning and operating their businesses in Vermont. Overall, the outlook Governor Shumlin laid out today will not help small businesses to grow and prosper in our state.”Vermont Human Rights CouncilToday, organizations affiliated with the Vermont Human Rights Council [1], a coalition of disability rights, climate justice, and workers’ rights organizations, released the following statement in response to Governor Shumlin’s budget address:“The purpose of our state budget is to address the fundamental needs of all residents, and to advance dignity and equity. These are common sense goals that reflect the shared values of the people of Vermont. They are also stated in Vermont law (32 V.S.A. § 306a).Yet today we witnessed once again the failure of state government to fulfill this basic obligation. Proposed budget cuts range from libraries to heating assistance, and from wage cuts for state workers to cuts to the Reach Up program, as well as continuing many of the additional cuts made to this year’s budget ($30 million in July and $12 million this month). Gutting public services and programs will harm many people in our state, at the same time as our tax system continues to privilege the wealthy and increases tax breaks for larger businesses.Even though Vermont’s economy is now one of the fastest growing in New England, most people are not benefiting from this. On the contrary, the gap between the rich and the rest of us is widening. Median household income dropped to its lowest level in 10 years, poverty and homelessness are on this rise, and 1 in 6 Vermonters are forced to rely on food stamps to feed their families.The Human Rights Council calls on our elected representatives to recognize that growing inequity in our state is a product of failed policies, and as such is up to legislators to change.Here are just two examples: Vermont tax policy disadvantages low- and middle income people, who pay a greater share of their income in taxes than the wealthy. This unjust burden on the majority of residents has grown over the past few years: middle income people now pay almost 3% more of their income in taxes than the rich, compared to around 2% in 2007. The proposed elimination of the income tax deduction for state income taxes, while a step in the right direction, will not change this significantly.  Growing inequity in the tax system is mirrored by inequity in healthcare financing, as a RAND study released this week reminded us: low- and middle-income residents pay a much greater share of their income for healthcare costs.Our budget and revenue policy can change this, by developing spending initiatives that meet people’s needs and raise revenue equitably. Similarly, equitable public healthcare financing can offer huge financial relief to low- and middle income families. Yet the piecemeal health reform measures announced today fail to address the underlying problem of inequitable healthcare costs. As much as we welcome the long-overdue increase in Medicaid provider payments, along with cost relief for people on Vermont Health Connect – who were kicked off of public healthcare programs when these were eliminated by the Affordable Care Act – we have learned over the years that no single band-aid can cure the systemic flaws of a healthcare system whose goal is not to meet health needs but to generate revenue for a myriad of interests.  As a key budget and revenue issue, healthcare financing appears to have fallen prey to the administration’s refusal to make the wealthy and big businesses pay their fair share in taxes. Instead of offering relief to the smallest businesses and asking big businesses to pay more, based on their ability, the governor now proposes to fund his band-aid measures with a small flat payroll tax – the same type of tax that led him to drop financing reform in the first instance. Due to its regressive nature this tax continues to shield bigger corporations and the wealthy from more equitable taxation.“Vermont needs a budget and a healthcare financing plan that start with people’s needs and raise money equitably to meet those needs,” said James Haslam, director of the Vermont Workers’ Center, “yet every year politicians do just the opposite: cutting the budget, giving tax breaks to large businesses, and defending private healthcare financing that hurts low-income people the most. Why do they not follow Vermont law, which requires us to advance dignity and equity in our state and to provide healthcare as a public good?”Karen Topper, of Green Mountain Self-Advocates, said: “A budget is a document of values. We need our Vermont state budget to ensure that every person counts and is supported to live with dignity, respect and independence.”Workers’ rights are also under attack in this budget proposal: the governor seeks to outlaw educators’ right to strike, cut wages and benefits of state workers, and lower the wage rate requirements for businesses that receive tax incentives.Members of the Human Rights Council emphasize that budgeting must be a participatory, transparent and accountable process that involves the public in a meaningful way and avoids pitting different needs and rights against another. Will Bennington of Rising Tide Vermont said: “The Vermont Human Rights Council works collaboratively because we know that there is no climate justice without migrant justice, no workers rights without disability rights.”The Human Rights Council calls on our elected representatives to change the budget and revenue process by instituting comprehensive and participatory needs assessments and an accountability framework that evaluates public policy decisions using accurate measures of unmet human need.  This year, as in previous years, we request that our representatives recognize that the current goals and processes used in developing the state budget are inadequate. The outcome of the current way of doing things is failing the people of Vermont.”1] The organizations signed onto this statement so far include Green Mountain Self-Advocates, Rising Tide Vermont, and the Vermont Workers’ Center. More will be added over the next 24hrs and posted at www.workerscenter.org(link is external)Public Assets InstitutePoverty, hunger, and homelessness are on the rise in Vermont. Meanwhile, median household income has been steadily declining since before the recession, and the gap between those at the top and everyone else is getting wider. In his budget address, Gov. Peter Shumlin acknowledged some of these struggles that many Vermonters face, but the real test of his spending proposal for the coming year is how well it addresses Vermonters’ basic needs and helps bend the curve on these troubling trends.Strengthening Medicaid with a new payroll tax and matching federal dollars is a step in the right direction toward a fairer way to pay for health care. But the proposed cuts to Reach Up and the Low-Income Home Energy Assistance Program (LIHEAP) are going to make life much harder, not better, for some of the state’s most vulnerable families. It appears the governor also wants to lower the threshold for the wages a business must pay in order to qualify for tax breaks. Vermont families need jobs with higher, not lower, wages if we hope to reduce income inequality and poverty in the state.The Legislature has committed itself to following fiscal policies that address Vermonters’ needs. We encourage lawmakers to keep that commitment in mind as they take up the governor’s fiscal 2016 budget.- See more at: http://publicassets.org/blog/statement-on-gov-peter-shumlins-fiscal-2016…(link is external)Poverty, hunger, and homelessness are on the rise in Vermont. Meanwhile, median household income has been steadily declining since before the recession, and the gap between those at the top and everyone else is getting wider. In his budget address, Gov. Peter Shumlin acknowledged some of these struggles that many Vermonters face, but the real test of his spending proposal for the coming year is how well it addresses Vermonters’ basic needs and helps bend the curve on these troubling trends.Strengthening Medicaid with a new payroll tax and matching federal dollars is a step in the right direction toward a fairer way to pay for health care. But the proposed cuts to Reach Up and the Low-Income Home Energy Assistance Program (LIHEAP) are going to make life much harder, not better, for some of the state’s most vulnerable families. It appears the governor also wants to lower the threshold for the wages a business must pay in order to qualify for tax breaks. Vermont families need jobs with higher, not lower, wages if we hope to reduce income inequality and poverty in the state.The Legislature has committed itself to following fiscal policies that address Vermonters’ needs. We encourage lawmakers to keep that commitment in mind as they take up the governor’s fiscal 2016 budget.Vermont’s economy has shown many signs of recovery since the Great Recession. State revenues have rebounded, growing by $175 million between 2011 and 2014 after falling by more than $97 million between 2008 and 2009. This has coincided with increased job growth, a steady decline in the unemployment rate, and a drop in the number of foreclosures. But while Vermont’s economy continues to grow, the growth rate has not been as robust as economists had predicted. In early 2014, the consensus economic forecast was that State revenue would grow by 5 percent over the prior fiscal year. Revenue is now expected to grow by only 3 percent for this fiscal year and general fund revenue growth is expected to remain around 3.5 percent for the next five years.The Governor noted that these realities lead to a simple yet challenging conclusion. “Like a family trying to adjust its budget to meet reality, it is our responsibility as state leaders to match state government spending with Vermonters’ ability to pay,” he said.To meet that challenge, the Governor today laid out a balanced budget that begins to address the structural deficit by continuing to practice fiscal responsibility; reducing reliance on one-time funds; restructuring some state programs while making difficult cuts to others; investing in programs that deliver more to Vermonters in economic opportunity and support than they cost; and raising revenue without asking Vermonters to pay higher income, sales, or rooms and meals tax rates.·       Promote Fiscal Responsibility: To maintain Vermont’s top bond rating and avoid charging current budget challenges to future generations, the Governor’s budget fully funds retirement contributions and debt obligations. It also fully funds the General Fund transfer to the Education Fund, recognizing that Vermonters cannot afford to shoulder additional property tax expenses.·       Reduce Reliance on One-time Funds: The FY2016 proposal relies on $11 million in one-time funds, down from a high of $59 million in FY2012. While federal stimulus funds helped pull Vermont, and many other states, through the Great Recession, it is time to wean the state off those funds in order to chart a fiscally sustainable path forward.·       Find Efficiencies through Restructuring and Difficult Cuts: The Governor’s budget proposes more than $15 million in ongoing savings through the streamlining, consolidating and restructuring of some government services. Among others, this includes the consolidation of some libraries, public safety call centers, the on-site septic program, and the Community High School of Vermont. The budget also cuts some programs such as the state LIHEAP appropriation, instead relying solely on federal funds as neighboring states do. The Governor acknowledged the difficult choices presented in the budget, but said those choices must be made if we are to finally shed the harm of the great recession and put the state on a sustainable fiscal path. “I ask critics of my proposals for restructuring to follow a simple rule:  If you don’t like my recommendations, make your own that achieve equal ongoing savings,” he said.·       Invest in Programs that Deliver Economic Opportunity and Support to Vermonters: Wherever possible, the Governor’s budget makes smart choices by not cutting programs that deliver more to Vermonters in economic opportunity and support than they cost, such as the Vermont Rental Subsidy, the Family Supportive Housing Initiative, and the Emergency Solutions grants. The Governor’s budget does not cut one dime from critical child protection services. In fact, it supports increased staffing and other changes made in response to the tragic deaths of Vermont children last year. The Governor will also lay out proposals this year to strengthen communication, transparency, enforcement and protection in Vermont’s child safety work. Closely related to the issue of child safety is continuing to make progress on addressing and preventing opiate and heroin addiction. While Vermont has made incredible progress, there is more work to do. To that end, the Governor’s budget increases by 16 percent overall drug treatment spending, providing continued support for treatment and recovery centers as well as the statewide rapid intervention program.·       Raise Revenue: To meet a portion of the budget gap, the Governor is proposing to close an income tax loophole that allows Vermonters to deduct from the current year’s state taxes the taxes they paid the previous year. The majority of income tax states already disallow this exemption. Reforming this loophole will cost taxpayers who use it an average of $175 and raise an expected $15.5 million.HEALTH CARE: CUTTING BY HALF THE MEDICAID COST SHIFT AND REDUCING PRIVATE INSURANCE PREMIUMSThe Governor laid out an aggressive health care reform agenda that will continue to make progress on moving to payment for quality outcomes instead of number of procedures, fixing the state’s chronic underpayment of Medicaid which shifts costs and artificially inflates private insurance premiums and increasing access to and affordability of health care for Vermonters. The Governor outlined a five-point plan to make progress towards these goals:·       Pursue the Federal “All Payer” Waiver: Vermont must continue work to become the first state to move from the current quantity based, fee for service system to one that pays providers for the quality outcomes they produce by pursuing an “all payer” waiver with the federal government.  The Green Mountain Care Board (GMCB) is working closely with the Administration to submit a waiver application to the federal government that will allow the alignment of how providers are paid across private insurance and public programs to ensure that providers have the right incentives for improving quality and reducing cost. The Governor wants to secure this waiver by January 1, 2017.·       Strengthen the Green Mountain Care Board: To make sure that the Board institutionalizes its early cost containment success, the Governor is asking the legislature to enhance its role as a central regulator so it can treat health care like the public good that it is and ensure that Vermont has an integrated, cost-effective health care system for the long run. Specifically, the Governor wants to give the Board the ability to act where needed to open investigations into pressing issues and problems; programmatic and budget approval of the Vermont Information Technology Leader, VITL, to ensure alignment of health care technology investments with a more integrated, universal statewide system; and the power to approve innovative payment and delivery models promoted by Accountable Care Organizations, physicians, and clinics.·       Invest in Vermont’s Blueprint for Health and Payment Reform: To build on the early success this effort has shown in bending the cost curve while ensuring high quality health care for Vermonters, the Governor’s budget more than doubles payments to Medicaid’s Blueprint providers with a new $4.5 million appropriation, which includes increasing Medicaid’s community health team payments by $1 million and adding $3.5 million to Medicaid medical home payments. The budget also supports Home Health organizations with an additional $1.25 million to help them move forward with payment reform and invests $500,000 to leverage $5 million in federal funds to expand and support community providers such as the Support and Services at Home (SASH) program, Vermont Care Alliance, and others.·       Reduce by Half the Medicaid Cost Shift:  To address the Medicaid cost shift that drives up private insurance premiums by an astonishing $150 million every year, the Governor is proposing to invest $25 million in the latter half of FY 2016, when new insurance rates begin, for payments to health care providers. On an annualized basis, this will mean $50 million in cost shift reduction. To ensure that the cost shift is not further exacerbated by the nearly 20,000 newly insured Vermonters resulting from Vermont Health Connect, the budget also includes $30 million to cover these Vermonters in Medicaid. All of these increases will help compensate Medicaid providers more fairly for the work that they do to keep their patients healthy, stabilizing the entire health care system for the benefit of all.  Together, these increased payments will reduce the current Medicaid cost shift by half. The Governor’s budget proposal includes language to ensure the Green Mountain Care Board with insurers and hospitals will recover the savings created by these increased payments, reducing premiums by up to 5 percent from what they would have been. ·       Cut the Uninsured Rate by Expanding Access and Increasing Affordability: The Governor’s budget sets aside an additional $2 million to help Vermonters pay for their out of pocket health care costs, doubling state funding available to help Vermonters afford to go to the doctor when they are sick, treat their chronic conditions, and pay for their prescriptions through Vermont Health Connect Cost Sharing Reductions. These funds will be targeted to families with income between $48,000 and $72,000 who often feel the burden of high out of pocket costs. The Governor reiterated that he is open to other ideas to increase health care affordability, increase coverage, or provide backstop care for our few remaining uninsured.To pay for these health investments, the Governor is proposing a seven tenths of one percent (0.7 percent) payroll tax on Vermont businesses. Every dollar raised will draw down $1.10 in federal funds, more than doubling the money raised through the payroll tax. In FY2016, the proposal would raise $41 million in state funds matched with an additional $45 million in federal dollars. The money raised from this tax will go into the State Health Care Resource Fund and all of it will be dedicated to reducing the cost shift and improving health care quality and delivery.About $55 million of will be applied directly to the cost shift to reduce private insurance premiums, essentially getting $55 million in relief for $45 million raised in state funds.SCHOOL SPENDING, EDUCATIONAL OUTCOMES AND PROPERTY TAXESWith student enrollments down 20 percent since 1998, a 4.6 to 1 staff to student ratio, and property taxes rising fast, the Governor outlined a number of proposals to help address the education spending problem in Vermont while improving education quality, including:·       Release a new online tool developed by the Agency of Education that allows for a clearer understanding of education spending, tax rates by district, and implications of declining enrollment and staffing to inform the conversations at the local level. To see the tool, CLICK HERE(link is external).·       Place a moratorium on any new legislation that adds costs to districts.·       Phase out contradictory, expensive incentives including the small schools grant and the phantom student provision.·       Target construction aid for districts that are actively trying to right-size through a merger. The capital budget proposes $3 million for State Aid for School District consolidation.·       Pass no strike imposition legislation prohibiting teacher strikes and board-imposed contracts while requiring both teachers and school boards to agree to a process for resolving labor disputes through third party decision making in the rare but disrupting instances when no negotiated agreement is reached.·       Enhance authority of the State Board of Education to redistrict in cases where a school or district is orphaned and needs to be part of a bigger union.·       Ensure decisions such as principal hiring, health care contracting, and other significant spending take place at the supervisory union level and empower Principals to hire all staff at their schools.The Governor is also proposing that the state take its data sharing to the next level by partnering with all districts, starting with the most vulnerable, to create tailored performance measures, including targets for student outcomes, school climate, staff to student ratios and per pupil spending. Districts will get feedback, and if changes are needed, they will receive guidance and time to make progress. For those districts that do not make progress despite feedback from this process, the Governor will work with the Legislature this session to determine possible monetary or restructuring penalties. This work will add no additional burden to the education fund.The Governor concluded with a plea to Vermonters and the legislature on the issue of property taxes and school spending. “This is my plea: let’s all commit ourselves to an environment where we listen to all ideas, and do not judge them too soon. Let’s investigate them, challenge each other respectfully, and be open to change,” he said.HIGHER EDUCATION: FREE ASSOCIATES DEGREE IN ENGINEERING TECHNOLOGY AND ENHANCED JOB TRAININGBuilding on expanded dual enrollment and early college programs as well as the Vermont Strong Scholars Program, the Governor announced that he will implement an innovative new public/private partnership to create a pathway for Vermont Technical College (VTC) students to earn a free Associates Degree in Engineering Technology and a pipeline for Vermont employers looking for skilled employees.Overseen by the Agency of Commerce and Community Development (ACCD), the new program will work like this: ACCD will partner with VTC to recruit employers who have job openings. VTC and participating employers will then work together to recruit motivated high school seniors, through campus visits and employer tours. Students who sign up for an Engineering Technology degree through VAST early college at VTC will get their first year of higher education free while finishing high school, then will be guaranteed a summer internship at the partnering employer to gain critical job skills. When they return to VTC for their second year, the employer will pay for their first semester’s tuition, a cost of about $5,000. The Vermont Strong Scholars program will then pay back their loans for their final semester if they stay and work in Vermont after graduation.This program will increase enrollment at VTC, connect young people to education, a job, and a future in Vermont while supplying trained, well-educated workers to Vermont employers who need them.To build on Vermont’s high school and higher education programs like VAST, targeted job training programs and state-registered apprentice and job training programs, the Governor is proposing this year to increase job training efforts to match Vermonters with current job openings and areas with projected job growth.The State has made a significant commitment to workforce training through funding of the Vermont Training Program and the Next Generation Program, with more than $3.3 million available to utilize and leverage with federal funds.  Through the Agency of Commerce and the Department of Labor, this money can also be supplemented by targeted funds in response to economic challenges facing a region or county.Just recently, the State also received an influx of more than $6.6 million in federal grants to engage in workforce training, which it will use in partnership with the University of Vermont, Vermont Technical College, Community College of Vermont, and Vermont HITEC. These grant awards will allow Vermont to focus job training at key existing employers with high need and to create a ready workforce for new employers in Vermont, such as Precyse and GlobalFoundries, looking to expand their job offerings.ECONOMIC DEVELOPMENT: BOOSTING VEGI, MARKETING AND GLOBALFOUNDRIESVermont’s future lies in the amazing success of the many high tech and advanced manufacturing companies that are growing statewide. The signs of success are everywhere, from Burlington being named one of the top emerging tech hubs in America to growing companies like Dealer.com, MyWebGrocer, and Logic Supply to new high tech startups like the new ad-free social media site Ello and Designbook, a new crowdsourcing and start-up platform. But it’s not just Burlington: Pwnie Express in Barre has been recognized by Wired magazine for its cyber security devices; Global Z in Bennington has been quietly growing into a global leader in data management; Yonder, the app Backpacker Magazine described as “what happens when Instagram and Foursquare meet at REI and have a baby together,” is growing in Woodstock.Vermont’s manufacturers are also on a comeback, employing more than 11 percent of the State’s workforce. Innovative companies such as Mack Molding in Arlington and Cavendish and GW Plastics in Bethel have successfully expanded into new areas. Vermont Precision Tool in St. Albans has taken on some of the very capable workforce that Kennametal left behind in Lyndonville. In Bennington, car parts fabricator NSK is adding jobs and has employed some of Plasan’s former workforce. Cabot Hosiery has seen orders for their Darn Tough “Made in Vermont” brand double.A part of this success has been Vermont’s targeted incentives like the Vermont Economic Growth Incentive (VEGI) program. In this most recent round of funding the Vermont Economic Progress Council is using VEGI to leverage $21.4 million in new full-time payroll and over $37 million in qualifying capital investments in the recipient companies over the next five years. These investments are spread throughout the state, from National Hanger Company in North Bennington to Cabot Hosiery in Northfield, Vermont Packinghouse in Springfield, and Blodgett Ovens in Essex. With their awards, these companies will create over 550 new jobs for Vermonters, with an average yearly salary of more than $50,000.To build on this success and bolster the VEGI program, the governor proposed three improvements, including:·       Remove the $1 million cap for special projects outside of Chittenden County.·       Work to change the qualifying wage rate to recognize regional economic differences, increasing the number of companies around the state that qualify for job creation support·       Enable companies to use VEGI dollars earlier for training new hires.With tourism supporting 30,000 jobs, the Governor is also proposing to partner with the Vermont Chamber of Commerce to use increased revenue from the rooms and meals tax to boost tourism and marketing funding. Under the proposal, 15 percent of Rooms and Meals tax receipts above budgeted projections will be invested in increased tourism and marketing support. The fund will also be used to promote remarkable companies like Ello, Faraday, Dealer.com, Keurig Green Mountain, Rhino Foods, and so many more that show what a great place Vermont is for technology businesses, manufacturing and entrepreneurship.Lastly, Vermont is entering a new era of advanced manufacturing with the pending purchase of IBM by GlobalFoundries. The company is committed to Vermont, and they backed that talk up with action by offering jobs to every single one of the IBM employees that are a part of the deal. If the sale is approved, GlobalFoundries wants to build on IBM’s strong foundation here in Vermont and grow jobs as it seeks to become the worldwide leader in chip R&D and radio frequency silicon chips, the kind that nearly every wireless device use. To make sure GlobalFoundries is a success in Vermont, the Governor has asked his Commerce Secretary Pat Moulton to work closely with the company to support further investments as the company takes over the operation of this critical economic engine for Vermont.The Governor concluded his address by saying, “It is an extraordinary privilege to govern a state where we all know each other, where a citizen legislature shows the country how to take on the biggest challenges we face, and where we really do put aside partisan differences that can paralyze democracy.  Each of us comes to elected office filled with the intention to do good for our communities and our state.  Every election is an opportunity to remind ourselves of our purpose, and renew our commitment to help Vermonters through our service.  Vermonters expect nothing less from us, and I believe they deserve even more.  I hope the proposals presented today and last week will help tackle the big problems we currently face and leave Vermonters with a feeling that state government can make their lives and our state better.  I look forward to the opportunity to debate, shape, and implement these proposals with you this session and beyond, to make lasting progress for jobs, our kids, our quality of life, and our environment.”Budget Address Governor Peter Shumlin January 15, 2015 Mr. President, Mr. President Pro Tem, Mr. Speaker, members of the General Assembly, Mr. Chief Justice, distinguished guests, and fellow Vermonters:As I stated here a week ago we have many challenges and opportunities ahead. Today, as I deliver the toughest budget I’ve put together, I will present to you Part 2 of my plan for how we can help secure a better future for all of us.When I listen to the voices of Vermonters, from every corner of our state, from every background, and of every political persuasion, their frustration and uncertainty about their future is clear. They play by the rules, work hard – sometimes at more than one job, but their bills keep piling up faster than they can bring in the money to pay them. At a time when the wealth gap between the people at the top and everyone else is more extreme than since before the Great Depression, Vermonters hear about the recovery both in Vermont and nationally; they hear about our state’s low unemployment numbers; and they wonder: Why aren’t I seeing it? Why is my family being held back?We know many of the drivers of this unease. Rising health care costs and rising property taxes, among others, with no corresponding rise in incomes and property values. Many hardworking Vermonters who would be proud to call themselves members of the middle class are left with a feeling that they are treading water or, worse, dipping below the surface.Like a family trying to adjust its budget to meet reality, it is our responsibility as state leaders to match spending with Vermonters’ ability to pay. Government must be effective, efficient, and affordable.Let’s not forget that the budget is just the math that shows us how we will achieve what really matters: to provide the services Vermonters need while creating opportunity for all of us to fulfill our full potential as citizens, family members, workers, and business owners.Though many Vermonters are struggling with affordability, all the news is not bad news. Our state economy is doing much better now than when I became governor four years ago. Unemployment is down; jobs are up; and foreclosures and bankruptcies have dropped sharply. General Fund revenues grew $175 million from FY11 to FY14. Contrast that with 2008 and 2009, when state revenues fell by more than $97 million and Vermonters were losing jobs left and right.Nevertheless, when I gave this speech last year, the official revenue forecast for FY16 was $40 million higher than it is today. A year ago, the consensus economic forecast was that our state revenue would go up by 5% in this budget year enabling us to grow our way back to a balanced budget. That has not happened. We now know that revenue this year will, at best, grow only by 3%, and we continue to expect a downgrade in projected growth when our economists release an update later this month. Looking ahead, the General Fund is expected to grow around 3.5% for the next five years.We have already made some tough decisions together and reduced the FY 15 budget by $34 million. Many of these ongoing spending reductions are carried forward into the FY16 budget. Over the past four years we have also been weaning the State off the significant one-time federal stimulus dollars that helped pull Vermont, and many other states, through the downturn without completely eviscerating state government. We have reduced our reliance from a high of $59 million in FY12 to the FY16 proposal which includes only $11 million of non-recurring funds.Reduced growth rates in Vermont and across the country; dried up federal funds; the need to promote affordability for Vermonters – these realities lead to a single challenging conclusion: working together, we must take a different approach by curbing state spending to bring the cost of state services back in line with growth. While it will take more than one year to adjust to this new reality, my FY16 budget makes a strong start.To those who would call upon us to solve our $94 million budget gap by raising it in taxes, I am here to tell you that will not work, even if we could afford it, because our economy is growing more slowly than our state spending. Simple math tells us that we would have to raise revenue year after year if we fail to match our spending rate with our growth rate.With all of this in mind, I am presenting a balanced budget knowing that it is the beginning of a conversation regarding how to structure state government sustainably to meet the needs of Vermonters. You can expect me to engage deeply with you on how best to do this.I want to share the five principles that guided our work:First, I won’t charge our budget challenges to our kids and grandkids. My budget fully funds our retirement contributions and debt obligations. I am proud that we have maintained one of the strongest bond ratings in the country. With Vermonters struggling to pay their property tax bills, I also fully fund the General Fund transfer to the Education Fund.Second, state government must address ways to be more efficient. Therefore, I propose more than $15 million in ongoing savings driven by this principle. These include streamlining and consolidating government services and restructuring some programs. It is a necessary job of all good organizations – public and private – to continually look at what they do and ask: Is what we are doing meeting our core principles, and are we doing it the best way we can? These choices are rarely popular or without critics. Change is always hard. All of these cuts, and others detailed in the budget, have been proposed because I believe we can offer them while still providing core state services. But let me be clear – they are real; I know each matters deeply; and they are tough: In addition to personnel or labor cost savings, I am proposing consolidation of some libraries, public safety call centers, the onsite septic program, and the Community High School of Vermont. I propose that we not include state LIHEAP in the base budget this year, relying instead on our past practice of stretching our $18 million federal appropriation. While we cannot fill all the holes left by federal cuts, we will use the budget adjustment to make necessary enhancements. My budget counts $125 of social security income toward Reach Up eligibility to make it consistent with some other state programs. This reduces total Reach Up spending while preserving all other aspects of the program including those we added with you last session to help fix the benefits cliff.My budget also presents a net reduction of funding for 11 state employee positions and requests additional savings of approximately $9 million in personnel costs. This will require the Vermont State Employees Association to support some of the choices our budget will present – through reduced salaries and expenses and other ways – to avoid even larger problems if we fail.I know we will debate these and other parts of the budget throughout the session, but I ask critics of my proposals for restructuring to follow a simple rule: If you don’t like my recommendations, propose your own that achieve equal ongoing savings.Our third principle is this: wherever possible, make smart choices by not cutting programs that deliver more to Vermonters in economic opportunity and support than they cost. You will see that we retain investments in the Vermont Rental Subsidy, the Family Supportive Housing Initiative, and the Emergency Solutions grants that have a proven record of avoiding temporary motel shelters and helping the homeless move to stable housing. For programs that help sustain our most vulnerable, we have held spending wherever possible at last year’s levels.The fourth principle underlying our budget proposal is that we should not cut state programs if it will do far more harm than good down the road – as we saw in the depths of the recession with cuts that eroded our ability to adequately protect Vermonters, including vulnerable children. My budget does not cut one dime from Child Protection services; in fact, it supports the increased staffing and other progress we made in response to the tragedies last year. While we may never entirely prevent people with empty hearts from committing horrible crimes against those they should love and protect, the state must do everything it can to help our vulnerable children.We will present proposals to you this year to strengthen communication, transparency, enforcement, and protection in our child safety work. We also used the position pilot you wisely authorized last year to allow DCF to better manage the workload within its existing appropriation by adding social workers, as well as other child protection staff, within its present budget authority. While this is a necessary and substantial start, more is needed. I want to thank the Department and its hard-working staff for the improvements they have already made and the further work they will do with Senators Sears and Ayer, Representatives Lippert and Pugh, and all of you to better protect our children.One truth we should all acknowledge: the horrible tragedies inflicted upon innocent children across our state last year were driven by addiction. In their memory we must continue our work to prevent opiate and heroin abuse. The budget I propose continues support for treatment centers, recovery centers, and our statewide criminal justice rapid intervention program, and increases by 16% overall drug treatment spending to make sure last year’s progress is more than a one-time success. Together, Vermonters are facing the ravages of heroin and opiate addiction in our families, friends and communities, and we must continue to fight.Finally, my budget relies on the principle of balance. We cannot just restructure and cut to close our $94 million hole without inflicting significant damage upon Vermonters who need us. You have heard many times over the past four years my opposition to raising income, sales, and rooms & meals tax rates to fund state government. I remain convinced that our tax rates are already high enough, and as I travel across our state, Vermonters echo that view.Nevertheless, to meet a portion of our budget gap, I am proposing we close an income tax loophole that we partially fixed in 2009, by eliminating the deduction of state and local taxes paid from state tax returns. Vermont is in the minority of income tax states that still allow taxpayers who itemize to use this loophole to deduct from this year’s state taxes the taxes they paid last year. The average benefit for those who use this deduction is $175. Eliminating it raises $15.5 million toward our budget gap. This progressive and principled approach is sensible and timely.I hope we can return to these five principles as we debate this year’s tough budget together. I do not insist that I have all the answers; I do know we must work together to fund state government and deliver services affordably to Vermonters.Balancing our budget is only part of our responsibility this year. The key to our future is a growing, vibrant, entrepreneurial economy that supports jobs and better wages. Last week, I urged us all to seize our advantage to power Vermont forward in energy innovation to grow more jobs and lower our energy bills. I urged us to take the anger and frustration we feel when we see and smell algae blooms in our lakes to do more to protect our waters that are so vital to our economy and our way of life.We also know that the future of our working families and job creators depends upon improving access and affordability of health care by getting control of the unsustainable increases in health care spending. The future of our children depends upon finding solutions to the high costs of public education while improving quality and moving more of our kids beyond high school. The future of our state depends upon offering greater access to higher education and job training, and providing better support for our employers who drive economic development and job creation.Let me tell you my proposals in each of these areas.HEALTH CARE I have pursued health care reform for nearly two decades because I know how much the ever-rising cost of health care hurts families and businesses. The U.S. health care system is unsustainable, unfair, and unaffordable for too many. I know, perhaps better than anyone else in this room, just how hard it is to change the health care system. Yet it is absolutely critical that we do so or it will destroy the rest of our economy and the ability of Vermonters to pay their bills.That is why, despite great challenges and recent setbacks, I remain absolutely committed to continued improvement to our health care system so that we can fulfill the vision set forth by Act 48.Let’s make real progress together by moving to payment for quality outcomes instead of number of procedures; by fixing the state’s chronic underpayment of Medicaid which shifts costs and artificially inflates private insurance premiums; and by increasing health care access and affordability for Vermonters. Here are the five ways I propose we accomplish these goals:First, we need to accelerate the hard work we’ve begun on cost containment and move to a more rational way to pay our providers. It does not make sense that doctors and hospitals receive different amounts of money for the same procedures, depending upon who pays. It also does not make sense that our providers get paid for the number of procedures they perform, not results. Our current payment system does not reward healthy outcomes; it creates administrative headaches for our providers; it underpays our primary care community which threatens their survival; and isn’t fair because some of us – usually our businesses that offer health insurance and those of us with private insurance – end up paying more than our share to support the costs of the whole health care system.That’s why we must push full-steam ahead to become the first state to move from the current fee for service system to one that pays providers for the quality outcomes they produce by pursuing our “all payer” waiver with the federal government. The Green Mountain Care Board is working closely with my health care team to submit a waiver application that will allow us to align how we pay our providers across private insurance and public programs to ensure that providers have the right incentives for improving quality while bending the cost curve. This should be achievable by January 2017 if we all work together, and I ask for your support.Second, to aid these efforts, I propose we strengthen the Green Mountain Care Board. The Board is already successfully containing costs and moving the state steadily to a new, more rational payment system. In the past two budget years, the Board has held hospital spending growth to just 3%, less than half the growth rate that was seen over the previous seven years and the lowest hospital growth rate in over 30 years.To make sure that the Board institutionalizes its early cost containment success, I will ask the Legislature to enhance the Board’s role as the central regulator of health care so it can treat health care like the public good that it is. The Green Mountain Care Board, which was created by you in part based upon the well-established regulatory model of our Public Service Board, should also have the ability to open investigations into pressing issues and act where needed. It needs the ability to align health care technology investments with a more unified statewide system by having budgetary and programmatic oversight of the Vermont Information Technology Leaders, VITL. The Board should also have the power to approve innovative payment and delivery models promoted by our Accountable Care Organizations, physicians, and clinics.Make no mistake: the Board faces a significant challenge, since national health care costs are expected to grow over 6% annually by 2019. While many of the other 49 states might sit back and continue health care business as usual, Vermonters cannot afford to do so. In order to continue our cost containment progress, we must strengthen our Board.Third, we need additional investment in Vermont’s Blueprint for Health to build on its early success in reducing costs while improving quality. It has been central to our reform efforts; our job now is to position it for a strong future. Our Blueprint medical homes and community health teams have effectively increased social services for the sickest and most needy Vermonters on Medicaid, and have reduced the medical needs of those with private insurance while saving about $550 per person every single year.Today, its future is at risk because participating providers have not seen an increase in payments since the Blueprint launched. My budget fixes this by more than doubling payments to Medicaid’s Blueprint providers with a new $4.5 million appropriation, including increasing Medicaid’s community health team payments by $1 million and adding $3.5 million to Medicaid medical home payments. My budget also supports our hard working Home Health organizations with an additional $1.25 million to help them move forward with payment reform.I also propose that we expand to more Vermonters the good work done by home and community providers, like the Support and Services at Home (SASH) program and Vermont Care Alliance, by supporting my request for an additional $500,000 that will draw down $5 million in federal match. Programs like these keep Vermonters with chronic conditions healthier by managing their needs before they get sicker. It saves money and improves quality of life and we should make this model more widely available. This investment just makes sense; I need your support.Fourth, in order to make sure Vermonters have access to the care they need, we need to do more to fix the state’s broken Medicaid reimbursement rates. Anyone in business will tell you: when you get paid as little as 40 to 60 cents on a dollar of cost, you can’t stay in business. This puts our independent rural providers with high numbers of Medicaid patients at the greatest risk. All across Vermont, providers who treat Medicaid patients have two choices to limit losses: charge patients with private insurance a higher rate; or turn away Medicaid patients who desperately need care.Current Medicaid reimbursements drive up private insurance costs for businesses and individuals, acting as a hidden tax or cost shift. This amounts to an astonishing $150 million in private premium inflation every single year. Our failure to fix this by increasing state Medicaid reimbursements also means we are failing to draw down tens of millions of dollars in available matching federal funds.Therefore, my budget invests $25 million starting January 1, 2016, providing a 50% increase to our primary care providers and reducing the current Medicaid cost shift by half. My budget also will commit nearly $30 million in FY16 to cover the nearly 20,000 people who now have insurance coverage thanks to Vermont Health Connect and our Medicaid expansions.Every dollar of this increased payment in Medicaid reimbursements will be used to reduce the cost shift and bring down private insurance rates. My budget proposal includes language that requires the Green Mountain Care Board through its hospital budget and rate review processes to return the savings created by these increased payments, reducing premiums for businesses and individuals by up to 5% from what they would have otherwise charged.Fifth, we should better address health care access and affordability for Vermonters. We all should be very proud that, as a result of our implementation of the Affordable Care Act, we have now cut in half the number of Vermonters without health insurance. Vermont is one of two states in the country that now offers enhanced financial help, beyond what the Affordable Care Act provides, to those struggling to pay their share of health care costs. Yet we know from the recent household insurance survey that the biggest obstacle to care continues to be cost. Some of these individuals have insurance, but struggle mightily to meet their other out of pocket costs, deductibles, and co-pays when they get sick. Others refuse to sign up for insurance at all because of exactly the same concerns.That is why I recommend an additional $2 million to double the state’s current funding that helps families with incomes between $48,000 and $72,000 to afford to go to the doctor when they are sick, and pick up their prescriptions when they need them.I know that some of you have other ideas to increase health care affordability, increase coverage, or provide backstop care for our few remaining uninsured, and I welcome all good ideas.You might be asking: How are we going to pay for this? I propose to pay for all of the investments I just outlined with a seven-tenths of a percent (0.7%) payroll tax. The money raised from this tax will go into the State Health Care Resource Fund and will be dedicated to reducing the cost shift and improving health care quality and delivery. Why, you will ask, is a small payroll tax actually a sensible choice for businesses that have to pay it? Why is it the right move for Vermont? Every dollar the state collects allows us to draw down $1.10 of federal funds, more than doubling our money. In FY16, my proposal would raise $41 million in state funds matched with an additional $45 million in federal dollars.This proposal makes sense for businesses that provide health insurance because we can reduce the cost shift overall by more money than the tax raises by drawing down the federal match, lowering private insurance premiums. It benefits all Vermonters because the combined state and federal dollars raised increase payments to providers and increase access for Vermonters, while making commercial insurance more affordable for individuals and businesses. It will also leverage cost shift reduction for businesses that offer insurance today by asking for a small contribution through the payroll tax from all businesses, including those that do not currently offer insurance.Many of you share my disappointment that we will not achieve, at this time, the grand vision of Green Mountain Care. I know you, like me, want to ensure Vermont continues to make great strides in health care reform. Let me assure you that if we adopt the package that I have just outlined, we will have achieved a significant and meaningful part of the goal we set out for ourselves in Act 48 – real cost containment, a more rational delivery and payment system, and a high-quality, integrated health care system with better access and affordability for all Vermonters. These are huge accomplishments, critical to our economy, to putting more dollars in Vermonter’s pockets, and improving our quality of life. I ask for your support this session.EDUCATION/PROPERTY TAX There may be nothing more important to our future prosperity than providing a quality education for all our children. Yet today, Vermonters feel tapped out trying to meet that goal. There is no mystery why: While the number of students in our schools plummets, our property taxes skyrocket, and our property values and incomes stagnate. You heard it and I heard it from Vermonters all over the state these past months – they are frustrated at rising costs they struggle to control and they want action.Adding to their frustration is unease that we are not buying better outcomes with all the money that we spend. While our public schools receive deserved praise, the quality of education varies greatly across the state, and we are not making progress where we need it the most: engaging our kids living in poverty to excel in school and seek education beyond high school.Some seek precipitous changes that would fundamentally alter the way we delivery education in Vermont. To roll back the more than $230 million in increased education spending added in the past decade all at once would require us to immediately eliminate at least 2,500 of our teachers or close dozens and dozens of our schools.So drastic a move obviously would harm our ability to deliver high-quality, equitable education, but let there be no doubt that Vermonters want action and real change. If you think tax rates look bad now, let me share some really bad news: if we do nothing, projections for the next five years are worse; projections for the next 10 years are even worse than that. In fact, the numbers become eye-popping. Complacency is not an option. The status quo is not an option. Never before in my life as a public servant have I seen more will, across parties and across interests, to improve quality and lower costs.Let’s remember the facts as we act: Since 1998, Vermont has seen student enrollment decline by 24,000, a whopping 20% statewide, and some communities have lost over 50% of their students. There is no end to the decline presently in sight, as our population ages. Despite this decline, we employ more teachers and paraprofessionals than ever, with a statewide student-to-staff ratio of 4.7 to 1. We have the lowest class sizes in the country. Due to declining enrollment, 20% of our elementary classrooms have between two to nine children.The question is: Are we getting quality education for our higher price in these micro-classrooms? The answer is no. We buy those very small classes at the expense of foreign language, tech classes, the arts, sports, and other critical offerings. Our kids suffer as quality declines, and it is their future that takes the hit. Some of our schools are so small, the scores can’t even be reported in a statistically significant way, meaning we have zero data to measure their progress. We have one of the highest high school graduation rates in the country, but our students pursue post-secondary education at one of the lowest rates in the nation, with students living in poverty the least likely to move beyond high school. Our complex and archaic governance structure has principals and superintendents voting with their feet. An astounding 30% of them leave their jobs every single year, destabilizing critical leadership.Property taxes rise; student counts drop; and quality does not improve appreciably despite the enormous amount of money we are spending. We have to ask ourselves: Given all of these facts, are we spending money wisely, targeting our limited dollars where they will make the biggest difference for our children?This is not a problem we can pretend to fix by changing the way we collect revenue. We pay for education through property tax, income tax, sales tax, vehicle purchase tax, and lottery. To those who believe that the answer to our education spending problem is to ask for more money from any of Vermonters’ pockets, you have missed the point. Vermonters understand that we have a spending problem, and we need to fix it. They expect better outcomes for our students at lower costs. That should be our goal.In doing so, we must not compromise our constitutional obligation to ensure that every child has access to equal educational opportunity. Let’s not return to a pre Act 60/68 system where the quality of our kid’s educations depends upon the wealth of the community they happen to live in.Across Vermont, parents, teachers, school boards, students and voters are asking for help. I believe that when you give Vermonters the facts with good data, they will do the right thing every time. To support them, I made it a top priority to develop a partnership with schools and communities to give them the information they need to chart a better future for their children and their taxpayers.This past summer, I tasked my Education Secretary, Rebecca Holcombe to begin this work. Impressively, she has already met directly with members of almost every single local school board, and has shared data with every district in the state. The data is compelling, and uses facts, not emotion to demonstrate the need for partnership and change.We know there is a will to act at the local level. With overwhelming support, Chittenden East voters in six participating school districts approved a new merged district with a single board. Working together, they will have more power to provide superior and affordable education to their kids, and I applaud them for it. Other communities are engaging in similar conversations right now.Vermont’s schools are built upon a long tradition of local control, but we have to ask: What does that really mean today? For many communities where student counts have dropped precipitously, local control means board members finding themselves no longer in a position of deciding what opportunities to provide to their kids, but instead deciding what opportunities they have to take away. Do we cut foreign languages? The arts? Sports teams? Technology and computer classes? Meanwhile, even if one town makes cuts, the town next door might not – thereby driving up everyone’s costs and making local control more like local not-in-control.But if you really want to make a mess of our school system, ask Montpelier to come up with a one-size-fits-all solution of central control. Every time we try to solve the big problems in education by ourselves under this Dome, we run into a reality roadblock: every school, every district, and every community and region in our state is different and faces unique challenges that require unique solutions.That is why I’m so convinced that partnership is the answer. The partnership of local communities with my Agency and the State Board of Education, driven by real data about quality and cost, will result in a more affordable system with better outcomes for our kids. This will make local control real control, partnered with the state.Montpelier has a critical role to play in this partnership. We are fortunate that so many have come forward with ideas to help, but no one is sure which may work. So this is my plea: let’s all commit ourselves to an environment where we listen to all ideas, and do not judge them too soon. Let’s investigate them, challenge each other respectfully, and be open to change.Here are my proposals: First, we need to provide even more data to help people answer the questions they have about rising spending. My Agency of Education has today launched online tools right on our website to help communities understand their education spending, phantom students, tax rates, enrollment, and staffing. Encourage your communities to check it out as they review local budgets. Second, let’s commit to a moratorium on new mandates from Montpelier that adds costs to districts. Third, we must phase out or eliminate contradictory incentives built into the funding formula like the small schools grant and the phantom student provision. Fourth, we will target construction aid for districts that are actively trying to right-size through a merger. My capital budget proposes $3 million for this purpose. Fifth, we should pass legislation prohibiting both teacher strikes and board-imposed contracts, while requiring both sides to resolve differences through third party decision-making when negotiation fails. Sixth, we should consider giving enhanced redistricting authority to the State Board of Education or another entity when schools are orphaned and need to be part of a bigger union. Seventh, we should make sure decisions such as principal hiring, health care contracting, and other significant spending take place at the supervisory union level, and we should empower principals to hire all staff at their schools.These proposals will help, but a bigger transformation is required to truly bend our costs and shore up our challenged schools. So here is our bigger idea.Last year, you appropriated $3.5 million to the Agency of Education to help evaluate what we are buying with our education fund dollars. I have asked Secretary Holcombe to use this significant commitment to broaden and deepen our Education Quality Review program to help communities get a clearer picture of how effectively they are serving students and spending money.The Agency will go into schools with evaluation teams of colleagues and state experts. They will use data to set educational and fiscal targets, involving student performance, school climate, per pupil spending increases, and staff to student ratios, among others. They will then help schools achieve them. We will work with our most vulnerable districts first, and our goal will be to support improvement. A partnership means working together, but we must be prepared to act when necessary.We will give districts time to make progress, but if they do not make improvements in their fiscal or educational results, we should either adjust the funding formula to ensure that other taxpayers do not support continued bad choices or, when absolutely necessary, find ways to exercise authority to close schools. I propose we work this session to structure this enhanced review system to improve quality and cut costs.I know my proposals will not be welcome by everyone, but I hope you will consider them thoroughly and review them with an open mind, realizing that even more drastic solutions may be demanded by Vermonters if we fail to act. It will take time, hard work, courage and partnership – in Montpelier and in our schools and communities – to see progress, but it is critical that we start now.HIGHER EDUCATION AND WORKFORCE TRAINING Let’s not forget the reasons we are striving every day to improve our education system. It is the right thing to do for our kids. It also prepares them for good jobs, drives economic development, and attracts families to our state which desperately needs young workers.We have had many successes. I am proud that my Administration secured two highly competitive early childhood grants, attracting $70 million dollars in federal funds to help give our youngest Vermonters a strong start.We are also better preparing our students for the higher-skill, higher-wage jobs that are increasingly part of Vermont’s innovative jobs landscape. Nearly 1,300 juniors and seniors are taking college courses right now through our dual enrollment program. Last year, 142 high school seniors took advantage of our early college program at six Vermont colleges, making higher education more affordable by earning a whole first year of college for free. Meanwhile, more than 4,200 first-generation students participated in VSAC’s GEAR UP and Talent Search programs to help prepare for college.This progress matters. It matters to the parents of those young Vermonters who understand the importance of providing their children the opportunity to move beyond high school, but struggle to afford it. It matters to our employers, who need qualified applicants to fill many open jobs. It matters to all of us because the future success of these students means the future success of our entire state.Now listen to our next step. We are going to partner with businesses and Vermont Tech to create a free Associates Degree in Engineering Technology, and it can be done with no additional cost to the Education Fund.This is how it will work: Our Agency will recruit employers who need high-skilled workers. Vermont Tech and these participating employers will work together to find motivated high school seniors. Students who sign up for VAST early college will get their first year of college credit free while finishing high school, followed by a guaranteed summer internship at the partnering employer to gain critical job skills. When they return to Vermont Tech for their second year, the employer will pay for their first semester’s tuition, about $5000, and the Vermont Strong Scholars program will then pay back loans for their final semester if they stay and work in Vermont after graduation.This partnership is a four-way win. Vermont Tech increases enrollment; our students get degrees; our businesses get the trained employees they need; and our young people stay in Vermont.We know our businesses’ success also means success for working Vermonters. In addition to our high school and higher education programs like VAST, we have expanded other targeted job training programs to ensure Vermonters starting out or looking to move up in the workplace have the training they require. This year we will increase our job training efforts, with more than $3.3 million in Next Generation and other funds for our workforce training programs. We also will benefit from $6.6 million in recent federal grants for workforce training and help the long-term unemployed, in partnership with UVM, our state colleges, and Vermont HITEC.ECONOMIC DEVELOPMENT You may not have predicted this a decade ago, but today our advanced manufacturers are on a comeback, employing more than 11% of our workforce. We’re seeing innovative companies such as Mack Molding in Arlington, and GW Plastics in Bethel successfully expand into growing markets, like medical devices. Vermont Precision Tool in Swanton has hired some of the very capable workforce from Kennametal in Lyndonville. In Bennington, car parts fabricator NSK is adding jobs and has employed some of Plasan’s former workforce. Cabot Hosiery has seen orders for its Darn Tough “Made in Vermont” socks double, as they expand their physical plant and add jobs. The list of manufacturers going strong and creating jobs is impressive.We expect our newest advanced manufacturing company will build on the foundation of one of our oldest. When IBM announced it would sell its chip manufacturing division to GlobalFoundries, we entered a new era of advanced manufacturing in Vermont. In GlobalFoundries, we will have a partner who will see Vermont’s success as its success. The company is, in essence, a very large start-up. If the IBM sale is approved, GlobalFoundries will essentially double its U.S. workforce in one fell swoop. It will gain a foothold, through the strategic acquisition of the Vermont operations, in providing state-of-the-art chips that nearly every wireless device – from your smart phone to your tablet — relies on today.GlobalFoundries will also gain our highly-skilled, innovative workforce – and it has offered jobs to every single employee who is not being retained by IBM. Meanwhile, IBM will maintain a presence in Vermont with continued R&D work at the Essex campus for hundreds of current IBM employees, good news for Vermont.We are partnering with GlobalFoundries to ensure its Vermont success. I am grateful for the productive meetings with CEO Sanjay Jha and his team, and have asked my Commerce Secretary Pat Moulton to work closely with GlobalFoundries to support this new company’s growth and investment in Vermont. We will continue to be accessible, nimble, supportive, and innovative as we build this critical relationship.The spirit of innovation is alive and well all around our state. Burlington was named one of the top emerging tech hubs in the country last year. In addition to Dealer.com and MyWebGrocer, there is a new wave of high tech startups like our LaunchVT pitch contest winner IrisVR; online game designer GameTheory; Designbook; a new crowdsourcing and start-up platform; and the new ad-free social media site Ello – which had as many as 40,000 users sign up per hour this past September.That growth is not just in Burlington: Pwnie Express in Barre has been recognized by Wired magazine for its cyber security devices; Global Z in Bennington has quietly become a global leader in data management; Yonder, the app that Backpacker Magazine described as “what happens when Instagram and Foursquare meet at REI and have a baby together,” is growing in Woodstock.Our economic development programs – including the Vermont Employment Growth Incentive (VEGI), the Entrepreneurial Lending Fund, the Vermont Small Business Offering Exemption, and others – are nurturing businesses at all stages and helping to foster this job growth.In its most recent round of awards, the Vermont Economic Progress Council used VEGI to leverage $21.4 million in new full-time payroll and over $37 million in qualifying capital investments in the recipient companies over the next five years. The investment is spread throughout the state, from National Hanger Company in North Bennington to Vermont Packinghouse in Springfield and Blodgett Ovens in Essex. With their awards, these companies will create more than 550 new jobs, with an average yearly salary of more than $50,000 each.VEGI has been an important and successful economic development tool, and it is one we must continue to sharpen to help improve our economy. Therefore I will ask you make the following 3 improvements in the program: First, we will present a proposal to remove the $1 million cap for special projects outside of Chittenden County. Second, we will work with you to change the qualifying wage rate to recognize regional economic differences, increasing the number of companies around the state that qualify for job creation support. Third, we will also enable companies to use VEGI dollars earlier for training new hires.Another of our important economic drivers continues to be tourism. We are within a day’s drive of more than 80 million people starving for what Vermont offers: our quality of life, our ski slopes and trails, our beautiful downtowns, our beer, our award-winning cheese, our local food, and so much more. They come to experience all the things that we love about Vermont.Growing tourism grows our economy, and directly supports more than 30,000 jobs. That is why I will partner with the Vermont Chamber of Commerce on a plan to use increased revenue from the rooms and meals tax to boost our tourism and marketing efforts. In 2014, visitors to Vermont spent more than $2.5 billion. I propose we take 15% of future growth of our rooms and meals tax receipt above budgeted projections and invest it in tourism and marketing support and promotion, capping it at $750,000. This budget-neutral proposal will grow jobs and promote Vermont.We also need to shout from the rooftops what a great place Vermont is for technology businesses, manufacturing and start-ups. We need do a better job of telling the story of our remarkable entrepreneurs because they show that Vermont is a great place to work and do business. We launched our Great Jobs in Vermont campaign because we know that when folks visit Vermont they fall in love and want to come back to work or start a business as so many of our successful entrepreneurs have already done. We want others to learn what we already know: Vermont is the best place to live, work, and raise a family.CONCLUSION It is an extraordinary privilege to govern a state where we all know each other, where a citizen legislature shows the country how to take on the biggest challenges we face, and where we really do put aside partisan differences that can paralyze democracy. Each of us comes to elected office filled with the intention to do good for our communities and our state. Every election is an opportunity to remind ourselves of our purpose, and renew our commitment to help Vermonters through our service. Vermonters expect nothing less from us, and I believe they deserve even more. I hope the proposals presented today and last week will help tackle the big problems we currently face and leave Vermonters with a feeling that state government can make their lives and our state better. I look forward to the opportunity to debate, shape, and implement these proposals with you this session and beyond, to make lasting progress for jobs, our kids, our quality of life, and our environment.last_img read more

Moody’s upgrades BED’s credit rating

first_imgBurlington Electric Department,Recognizes Renewable, Reliable Power and Efficiency; Proactive Strategic Planning;Improved Financial MetricsVermont Business Magazine Moody’s Investors Service on Monday upgraded the Burlington Electric Department’s credit rating to Baa1 from Baa2, citing BED’s renewable and reliable power supply, energy efficiency measures, and proactive strategic planning by BED management as important factors for the boost. The full report is below.The Moody’s report notes:·         “The rating upgrade takes into consideration the improved financial record of Burlington Electric Department; competitive rates; the shift to a more diverse power supply mix; and the strengthening local economy.”·         “A positive factor in the rating is the proactive stance of management in its strategic planning regarding the evolving power industry. A focus on efficiency programs; renewable energy supply and positioning the utility organization through improved operations factor into our view about BED.”·         “The stable outlook reflects the improving trend of BED’s financial position that is reflected in the utility’s financial forecasts showing continued improvement in financial metrics.”“This credit rating upgrade validates BED’s efforts to source renewable power, expand efficiency programs, and restructure the organization to succeed in the changing utility landscape,” said Mayor Miro Weinberger. “The upgrade – which will lower BED borrowing costs in the future – also demonstrates that the Administration and City Council’s focus on strong municipal finances is generating real financial savings for Burlington residents, institutions, and businesses, and underscores the importance of continuing these efforts. Congratulations to General Manager Neale Lunderville and the entire BED team for their string of recent successes.”“Strong financial management is part of BED’s continued commitment to the customers we serve,” said Lunderville, BED General Manager. “As this upgrade demonstrates, Moody’s understands the importance of adapting to a changing energy market. Our ability to lead the green energy revolution depends on a solid financial foundation.”“It takes a great team – from City Hall to frontline staff – to achieve an upgrade from Moody’s,” Lunderville added. “I want to offer special praise to Daryl Santerre, BED’s Chief Financial Officer, for his unwavering focus on lifting our credit rating, and to the Burlington Electric Commission for their continuous attention to improving our financials.”The recent history of BED’s credit ratings and outlooks follows:Date Action Outlook 3/17/04 Baa2 10/13/10 7/22/14 Positive Negative A3 Baa2 Affirm Stable Stable 10/22/12 Affirm Affirmedcenter_img Affirm Rating 12/20/13 Upgrade from Baa2 Baa2 Baa2 Negative Downgrade from A3 10/06/11 Baa1 Affirm Baa2 11/9/15 StableFULL REPORTRating Update: Moody’s Investors Service Upgrades Burlington, Vermont ElectricRevenue Bonds to Baa1 from Baa2; Outlook StableGlobal Credit Research – 09 Nov 2015Upgrade Recognizes Financial Position ImprovementBURLINGTON (CITY OF) VT ELECTRIC ENTERPRISEElectric DistributionVTNEW YORK, November 09, 2015 –Moody’s Investors Service has upgraded the rating on the outstanding $29.03million Burlington, Vermont Electric System Revenue Bonds to Baa1 from Baa2. The outlook is stable. Burlingtonalso has $46.8 million General Obligation bonds issued for electric utility purposes (Baa2; positive). The cityissues approximately $3 million General Obligation bonds annually for electric purposes. The pledge of payment isafter the payment of debt service on the electric system revenue bonds.SUMMARY RATING RATIONALEThe rating upgrade takes into consideration the improved financial record of Burlington Electric Department (BED); competitive rates; the shift to a more diverse power supply mix; and the strengthening local economy.BED serves the City of Burlington, Vermont (Baa2 positive) which has a diverse local economy; stability isprovided by the institutional presence of a major university and medical center; and the city serves as acommercial center for a large geographic area. The rating also considers BED’s reliable and competitive powersupply which is less subject to market volatility and is significantly renewable; the utility’s improving financialrecord including expected strengthening forecasted metrics; and supportive rate regulation. While the BED issubject to the state public service board regulation, new rates may be collected 45 days after the filing with thestate. The regulatory board must consider bond covenants and sufficiency of revenues to support voted bondedauthorizations. The rate setting record has been supportive and timely with full recovery of requested costsrecovered since 2004. The utility has a conservative General Fund transfer policy.A positive factor in the rating is the proactive stance of management in its strategic planning regarding the evolvingpower industry. A focus on efficiency programs; renewable energy supply and positioning the utility organizationthrough improved operations factor into our view about BED. Retail rates are also competitive. While the McNeilGeneration Station, a wood burning electric generation facility represents 43.9% of FY 2015 BED energy, thecarbon neutral-renewable energy source is well-maintained and has had a sound operating record. Vermont isalso exempt from the federal EPA Clean Power Plan (CPP) so compliance issues are not a factor.BED’s financial record has been improving with a focus on stronger financial metrics with adjusted debt servicecoverage trending towards 1.50 times and forecasted coverage in the same range. The adjusted coverageincludes payment of General Obligation bond debt service. Combined electric revenue bond and GeneralObligation bond debt service is level. FY 2015 financial results include adjusted debt service coverage of 1.71times and days liquidity on hand of 94 days. BED’s elimination of a material adverse clause from its line of creditalso was a positive factor. BED expects an erosion of net income in FY 2018 due to several factors butmanagement is taking reasonable mitigation measures to resolve. In addition, BED has had a sound record of rateadjustments when appropriate. No additional rate adjustments are currently expected in next two fiscal years.OUTLOOKThe stable outlook reflects the improving trend of BED’s financial position that is reflected in the utility’s financialforecasts showing continued improvement in financial metrics.STRENGTHS*More diverse and cleaner mix of power supply resources than previously utilized mitigating industry challengessuch as market price disruptions and carbon regulation. Vermont is exempt from CPP.*Sound financial management with forward-looking financial polices to maintain sound financial metrics*Burlington has a diverse economy with colleges, a major hospital and the city is the economic center of region.*Experienced management focused on industry transition including ensuring utility fixed cost recovery through ratestructure changes*Strong reliability indicators for distribution systemCHALLENGES*Like most municipal electric utilities transition to more distributive generation including roof top solar representsnew challenges*McNeil wood fueled generation facility has dominant role but has had strong operating record and adequate fuelsupply*No base rate increase since 2009*While regulated on rate-setting by the state board, the rate setting record reflects full cost recovery and the abilityto increase rates within 45 days after filing with the state with later true-up.WHAT COULD CHANGE THE RATING UP*The rating could be upgraded once BED registered a longer trend of both debt service coverage and adjusteddays liquidity*Continued and sustained improvement in the City of Burlington general financial recordWHAT COULD CHANGE THE RATING DOWN*Deterioration in financial record of the city and utility*Unsupportive regulatory board regarding cost recovery and the maintenance of sound utility financial metricsRECENT DEVELOPMENTS*The city’s Burlington Telecom (BT) legal issues and enterprise risks are now in past and city is managing theenterprise well. BED was not impacted.*Elimination of the material adverse clause in the utility’s line of credit was a positive factorDETAILED RATING RATIONALERevenue Generating BaseThe utility serves the City of Burlington, Vermont, the state’s largest city and economic center. BED has amonopoly in the service area. BED is regulated by the state public service board but it is not like an investorownedutility oversight. The board has to take into consideration bond covenants and newly filed rates may becollected 45 days after filing with the state subject to later true-up. No historic record of lag or inadequate recovery.University of Vermont and regional medical center represent more than 20% of the customer base revenues. It isunlikely the university or medical center would relocate, lessening the concentration risk as a consideration.BED rates are competitive in all customer classes with residential rates being substantially below state average.Burlington, Vermont is the economic center for the state; has had an expanding local economy with severalredevelopment and smart development projects; customer base is stable but demand has shrunk due to extensiveenergy efficiency program.BED’s power supply mix is substantially renewable energy through both owned and purchased energy resources.McNeil Plant, a wood-burning generation facility, represented 43.9% of power supply sources, operated well in FY2015 with a 63.6% capacity factor.GOVERNANCE AND MANAGEMENTThe utility is governed by the Mayor and 12-member city council. The mayor is elected every three years andeach member of the city council have two year terms. The current mayor was recently re-elected. The mayor andcity council appoint 5 representatives to serve 3 year terms on the advisory Board of the Electric Commissioners.Most operating decisions are made by the BED and there is a degree of separation from the city such as anindependent auditor; limited General Fund transfers in the form of PILOTS; a line of credit independent from thecity.Ultimately rate filings must be approved by the Mayor and City Council. Following local approval, the VermontPublic Service Board (PSB) reviews the rates, the quality of services, and financial management of the utility.Financial Operations and PositionBED has had an improving financial record with adjusted debt service coverage trending higher in the 1.5x rangebetween 2013-2015. BED operating efficiencies, average weather, and renewable energy credit sales have beenpositive factors in the financial trend. Forecasts reflect adjusted debt service coverage improving in 2016-2018 butseveral factors may lead to a net income deficit in 2018. BED has identified several mitigation measures to correct.Those mitigation measures include pre-authorization of renewable energy credit sales; standard offer exemptionand promoting solar development behind the meter. Assumptions include no rate adjustments; average weatherconditions and impacts on sales from energy efficiency programs.LiquidityBED days liquidity on hand has been improving with FY 2015 liquidity days on hand at 94. The three year average2013-2015 was 66 days. BED has a $5 million line-of-credit also available.Debt Structure and Capital Improvement PlanBED has a conservative debt structure with fixed rate debt, voted authorization to issue bonds which VermontPublic Service Board has to incorporate in rate-setting, and level debt service. The debt service on the GeneralObligation bonds issued by the City of Burlington is paid after the payment of debt service on the electric systemrevenue bonds.BED expects to spend about $10 million annually between 2016-2018 on capital improvements, which includesnew transmission investments. BED projects a new electric revenue bond issuance in 2017 ($7.5 million) and2018 ($6 million) and about $3 million annually through city General Obligation financings.Debt-Related DerivativesNonePension and OPEBBED is covered by the City of Burlington pension and OPEB. The city participates in the Burlington EmployeeRetirement System, a single-employer, defined benefit retirement plan. The city’s annual required contribution(ARC, net of BED and school department) for the plan was $5.4 million in fiscal 2014, or 10.8% of General Fundexpenditures. The city’s 2013 adjusted net pension liability, under Moody’s methodology for adjusting reportedpension data, is $162.7 million, or an above average 1.4 times General Fund revenues. Moody’s uses the adjustednet pension liability to improve comparability of reported pension liabilities. The adjustments are not intended toreplace the city’s reported liability information, but to improve comparability with other rated entities.The city contributed 86% of its annual Other Post Employment Benefit costs in 2014, representing $381,268. Thecity’s OPEB UAAL as of June 30, 2013 is $3.9 million. Fiscal 2014 total fixed costs including pension, OPEB anddebt service was $9.3 million or 18.3% of expenditures.Methodology Scorecard Factors: US Public Power Electric Utilities: Burlington ElectricAs indicated below, the grid indicated rating for Burlington Electric is A3. The rating assigned to the outstandingelectric revenue bonds is Baa1. The difference between the grid-indicated rating of A3 and the rating of Baa1primarily reflects the financial metrics have not yet registered fully in the A category on a three-year basis and theCity of Burlington remains at Baa2-positive due to a history of governance issues.The grid is a reference tool that can be used to approximate credit profiles in the public power electric utility sectorin most cases. However, the grid is a summary that does not include every rating consideration. Please see theUS Public Power Electric Utilities with Generation Ownership Exposure Methodology for more information aboutthe limitations inherent to grids.Current Rating: Baa11.Cost Recovery Framework (25% weight)- (A)2.Willingness to Recover Costs and Maintain Sound Financial Metrics- (25% weight) (Baa)3.Management of Generation Risk-(10% weight) (A)4.Rate Competitiveness- (10% weight) (A) (-2.3%)5.Financial Strength:Sub factor a) Adjusted Days Liquidity on Hand-(10% weight) (66 days)Sub factor b) Debt Ratio-(10% weight) (55.5%)Sub factor c) Fixed Obligation Charge Coverage (10% weight) (1.52x)Notching Factor: NoneGrid Indicated rating : A3Key FactsCity of Burlington GO rating: Baa2 positiveThree-year average days liquidity, 2013-2015: 66 daysMedian for top 30 City Utilities That Own Generation 2014 – 239 daysThree-year average adjusted debt service coverage, 2013-2015: 1.52 timesMedian for top 30 City Utilities That Own Generation 2014 – 1.95OBLIGOR PROFILEThe utility serves the City of Burlington, Vermont, the state’s largest city and economic center. BED is adepartment of the city government and has a monopoly in service area. BED is regulated by state public serviceboard but is not like an investor-owned utility oversight.LEGAL SECURITYThe bonds are secured by the net revenues of the electric system. There is a 1.25 times rate covenant and thedebt service reserve requirement is equal to maximum annual debt service on the senior revenue bonds.The department also has approximately $43 million of general obligation (GO) bonds that are expected to be repaidfrom electric department operating revenues. The rate covenant on the consolidated debt outstanding is 1.00times. Per the General Bond Resolution, the claim on the revenues of the department by the revenue bondholdersis prior to any claim of the GO bondholders.USE OF PROCEEDSN/APRINCIPAL METHODOLOGYThe principal methodology used in this rating was U.S. Public Power Electric Utilities with Generation OwnershipExposure published in November 2011. Please see the Credit Policy page on www.moodys.com(link is external) for a copy of thismethodology.REGULATORY DISCLOSURESFor ratings issued on a program, series or category/class of debt, this announcement provides certain regulatorydisclosures in relation to each rating of a subsequently issued bond or note of the same series or category/classof debt or pursuant to a program for which the ratings are derived exclusively from existing ratings in accordancewith Moody’s rating practices. For ratings issued on a support provider, this announcement provides certainregulatory disclosures in relation to the rating action on the support provider and in relation to each particular ratingaction for securities that derive their credit ratings from the support provider’s credit rating. For provisional ratings,this announcement provides certain regulatory disclosures in relation to the provisional rating assigned, and inrelation to a definitive rating that may be assigned subsequent to the final issuance of the debt, in each case wherethe transaction structure and terms have not changed prior to the assignment of the definitive rating in a mannerthat would have affected the rating. For further information please see the ratings tab on the issuer/entity page forthe respective issuer on www.moodys.com(link is external).Regulatory disclosures contained in this press release apply to the credit rating and, if applicable, the related ratingoutlook or rating review.Please see www.moodys.com(link is external) for any updates on changes to the lead rating analyst and to the Moody’s legalentity that has issued the rating.Please see the ratings tab on the issuer/entity page on www.moodys.com(link is external) for additional regulatory disclosures foreach credit rating. 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