Legislative Report - 1/23/2011

For the past two weeks the legislative session has been in full swing with several major newsworthy events taking place.  The biggest event was the report of Dr. William C. Hsiao and the Health Care System Design Study Commission.  Dr. Hsiao presented a summary of the report before the legislature and the commission’s recommendation that a system of a public-private single-payer system would be most effective in lowering costs while providing access to basic health care to all Vermonters.  His presentation as well as the draft of the full report can be found at the Joint Fiscal Office website, http://www.leg.state.vt.us/jfo/healthcaresystemdesign.aspx.  Health care is complex, expensive, and affects everyone.  Much work will have to be done by Health committees in both the House and Senate to rigorously examine the full report and take testimony before any legislation is formulated.  Any implementation of the proposals will have to achieve these goals: 1) control health care spending which has been increasing about a million dollars per day, 2) provide coverage for the  32,000 Vermonters who have none today, and 3) reduce the cost to employers of providing coverage for their employees.  The report indicates that these goals can be accomplished and provide a model for reform on a national level.  I encourage you to read the report, or at least the presentation, and let me know what you think about it.

The Joint Fiscal Office, a non-partisan research arm of the legislature, also presented to members of the legislature an overview of the report of the Blue Ribbon Tax Structure Commission.  This report can be found at http://www.vermonttaxreform.org/wp-content/uploads/2011/01/WEB-REPORT-2.pdf.  Taxes have been a persistent issue in Vermonters’ minds, and Charlotte is no exception.  We often find Vermont compared unfavorably to our neighbor, New Hampshire, which has no income or sales tax.  As a tax preparer I hear the same comments from many of my clients.  The commission considered all the types of taxes assessed by Vermont, including the income tax, the sales tax, excise taxes, fees, and property taxes, and compared them to the other New England states and New York.  The commission found that the vast majority of Vermonters pay taxes, and that Vermont’s taxes are distributed rather evenly across income classes when considering all types of taxes together.  Taken as a percentage of household income, sales taxes are regressive with lowest 20% of incomes paying 5.5% of total income and the highest 1% paying about 0.5%.  The income tax, on the other hand, is progressive, ranging from -1% (a tax benefit) for the lowest 20% to 5.5% for the top 1%.  The property tax is slightly regressive, ranging from 3.8% for the lowest 20% to 2.2% for the highest 1%, with a bump showing the top 60-95% at about 4.2%.  The distribution of the total tax contribution at all income levels averages 9% +/- 1%.  New Hampshire, on the other hand, places the highest burden of total taxation on the lowest 20% at about 8.5% of income and the lowest burden on the top 1% at about 1.7%, relying primarily on property taxes.  The commission made several recommendations including changing from taxable income to federal adjusted gross income as the starting point for the Vermont income tax.  Assuming no increase in income tax revenues, this would allow tax rates to be lowered and permit an apples-to-apples comparison with other states’ tax rates.  

In the Natural Resources and Energy Committee we are reviewing the elements of H.56, the Energy Bill of 2011.  This work will continue as we take testimony from various stakeholders. 

Legislative Report - 1/12/2011

Greetings and best wishes for a wonderful new year!  I am honored to be serving in the Vermont House as your representative.  This is the first of the reports I will be writing while the legislature is in session.  My goal is to keep you informed of activity in the House in general and of issues I am working on in particular.

The first three days of the session consisted of organization and a great deal of pomp and circumstance.  The session began on January 5th, and the first order of business in the House was to elect a Speaker of the House.  Rep. Shap Smith of Morrisville was the unanimous choice to serve for a second term, and he was sworn in by Secretary of State Deb Markowitz.  The members of the House were then sworn in by the Speaker.  When Speaker Smith announced committee assignments, I was pleased to be appointed to the Committee on Natural Resources and Energy, my first choice.

Day two featured the inauguration of Gov. Peter Shumlin.  It was an impressive ceremony that dominated the day and left little room for anything else.  In his inaugural address Gov. Shumlin laid out his agenda to

   1. bring broadband to all of Vermont so that our state can compete for business opportunities with the rest of New England,
   2. provide universal access to affordable health care and remove this burden from employers,
   3. ensure that our public education system can continue to effectively train our children and workforce to compete in today’s and tomorrow’s economy,
   4. support the agricultural foundation of Vermont by guaranteeing a fair price for dairy farmers and promoting Vermont products as local to a 200 mile radius including Boston and Montreal,
   5. provide an economic environment that will encourage entrepreneurial development and create thousands of new jobs in Vermont, and
   6. recognize that Vermont’s tax capacity is saturated in terms of controlling costs of state government.

Friday was the first real work day when we could meet in committee and review the upcoming agenda.  In the Natural Resources and Energy Committee, Chairman Tony Klein ran through a long list of topics we will be dealing with, including the Sustainably Priced Energy Efficiency Development (SPEED) program, feed in rates for renewable energy generation, funding of the Clean Energy Development Fund (CEDF), and regulating the sulfur content of home heating oil, among others.   One of the first bills, H.5 An act relating to returning moneys to the clean energy development fund (CEDF) to support solar tax credits, will recapture $2 million in redundant energy grants and make the money available for projects that were eligible for grants last year but could not be funded because the CEDF ran out of money.  Several of the projects were already under way and had been counting on the grants that failed to materialize.

Besides my committee work, I am also working on several unrelated pieces of legislation.  At the request of Selectman John Owens and Shelburne Police Chief Jim Warden I am introducing a bill that will require coin & jewelry dealers to obtain positive ID of persons seeking to redeem jewelry or collectibles for cash and to cross-check their inventory against lists of stolen items maintained by law enforcement authorities.  I have also asked for a review of the changes to the income sensitivity formula of the statewide property tax that resulted in significant reductions in property tax rebates to many homeowners in Charlotte.

 I also want to remind everyone that I will be at the Charlotte Town Office every 2nd and 4th Monday from 8 to 9 AM and from 5 to 6 PM if anyone would like to meet with me.  I also welcome your calls and emails and will try to respond to all in a timely manner.    If you would like to be notified when I update this blog, click on the "Follow" link in the menu bar above.

 I’m looking forward to a challenging and productive legislative session.