State Property Tax - On Tuesday (1/22) the Ways and Means Committee (my committee) received an update on the latest projections on what education property tax rates might look like in Fiscal Year 2014 (starting July 2013). The disheartening property tax arithmetic of reduced property values, combined with anticipated increased school spending, reveals a significant potential bump in the tax rate. Specifically, preliminary estimates peg the base rate increase at 5 cents, with the total education rate going up 9 cents on average. These projections could trend better or worse, depending on how school district budgets are completed and acted upon in March.
Revenue Projections - On Wednesday (1/23), Ways and Means heard from Tom Kavet, the Legislature's economist, on the latest consensus revenue forecast. Kavet, along with the Administration's economist, Jeff Carr, last week downgraded their FY 14 revenue forecast for the State by $20 million, with the General Fund off by $11.1 million, the Transportation Fund down $5.6 million and the Education Fund slipping $2.8 million. Kavet indicated that the sluggishness in anticipated General Fund income is due largely to macro-economic issues associated with continued uncertainty in Washington about what tack the Federal government might take on the debt question, and because of concerns about the European economic picture. He said that things could head south very quickly if Federal sequestration kicks in, but painted a much rosier picture if Congress and the President could actually come together to pass a coherent, long-term plan to address Federal red ink.
Governor's Budget - On Thursday (1/24), Governor Shumlin presented his FY 14 budget message to a joint session of the General Assembly. In total, including all fund types, the Governor proposed a budget of $5.2 billion, up 3.8 percent over the current year. Some of the more interesting items articulated by the Governor included an increase in the gas tax (estimated at 8-9 cents) to address a daunting transportation funding gap, a reduction in the low income Earned Income Tax Credit to increase funding for child care, new limits on the length of time Vermonters can receive welfare benefits and a new tax on break open tickets (low tech gambling) to help fund LIHEAP and thermal efficiency programs. On the break open ticket thing, the Administration estimates that fraternal organizations and others go through 250 million of these tickets a year; that just seems mindboggling to me.
Health Care - In 2011 the Legislature passed Act 48, which called for the Administration to put forward specific financial recommendations in January 2014 to fund the Federal Affordable Care Act ("Obama Care") and Green Mountain Care (single payer, maybe). For much of last year, as it became abundantly clear that Vermont could not embark upon Green Mountain Care (GMC) until 2017, I argued that we should amend Act 48 so that we could tackle the GMC financing plan in 2015, and now focus on compliance with the existing Federal law. I thought this would allow for a better analysis based upon more current data in '15 and would help to clear up some of the confusion Vermonters are experiencing between the ACA and GMC. But alas, I lost this battle, and on Friday (1/25), the Administration presented its double-barreled financial recommendations (but one barrel turned out to be empty). For Obama Care the Administration is seeking $19 million in new non-Federal revenue in 2016 to make the Federal law workable in Vermont.. If approved by the General Assembly, most of this revenue would come from a 1 percent increase in the insurance claims assessment tax. On the big, long-term question of funding Green Mountain Care - well, there wasn't any recommendation. I guess the Administration figured out that a lot can happen between now and 2017. So it goes.
Rep. Jeff Wilson represents Manchester, Arlington, Sandgate and most of Sunderland in the Statehouse in a two-member district with Rep. Cynthia Browning.