My major concern for the state is that we currently do not put adequate resources into all types of health and preventive measures and instead spend money on short-term solutions. We need to do a better job of doing long-range planning and matrix management.
Let me illustrate. Most everyone acknowledges that across America we have an enormous opiate problem. This is also true in Vermont. Much of this drug crisis is the result of the prescription of legal drug over-medication. Clarification is needed about the appropriate amount of pain reduction medication and about the addictive potential consequences of taking certain drugs. Putting more resources into counseling the population is a preventative measure that costs a minimal amount that can avert a patient's possible problems with drug addiction. Generally, in most circumstances preventive measures are proven to lead to less money spent on treatment. This was recently confirmed statistically in our House Human Services Committee where we received testimony from professionals in the Alcohol and Drug Abuse Program (ADAP). For every $1 invested in substance abuse prevention the state saves $10-$18 in costs associated with health care, criminal justice and lost productivity. Prevention costs $9 per person served in Vermont. We spent $3,549,893 on prevention last year. Compare that with Intervention, which costs $159 per person served. We spent as a state $4,043,957 last year on substance abuse screening and brief counseling. The ADAP noted that intervention is as effective as other health prevention screenings. Without prevention and intervention thee is a greater need to provide treatment. Treatment: costs $3, 148 per person served. Vermont spent $36,059,656 last year on addiction treatment. There are thousands of Vermonters who are untreated so three thousand dollars per person rises even higher for non-treated addicts as the cost of crime, criminal justice and theft. So treatment is better than no treatment of an addict. The more money we place into prevention, the better off Vermonters are and the more money the state saves.
Take weatherization as an additional example. The state has a Low Income Energy Assistance Program. LIHEAP is crisis related. Whereas, it is necessary to have emergency heating funds available, it is far better to minimize the need for emergency fuel assistance. One of the ways to do this is through weatherization, which is a long-term solution that reduces fuel costs (and carbon emissions) and can save a family more than $650 per year. Last year I fought to have weatherization continue at the level that was necessary to bring many more homes cost-savings. I was unsuccessful. The weatherization program was cut, that is what level funding does, but millions of dollars were added to the LIHEAP line-item. This is not good stewardship.
A further example where prevention is a better use of resources is the Reach Up program of the Department for Children and Families. This program provides assistance with case management, allocates cash for basic needs, and provides services that support a worker's move toward self-sufficiency. Reach Up dollars are a better financial and social investment than handing out motel vouchers. It costs $50-$70 per night for a motel room. A subsidy of $125 can keep a family in their home for a month. Either way, the state pays. What makes better sense? Keeping people in their homes or having them live in a car, a shelter or motel because they cannot afford rent? Every time we have another homeless family, and those numbers are on the rise, we create more problems for them and more costly outcomes. Last year the administration cut Reach Up subsidies as a supposed cost saving to the state. The outcome was that 860 families were affected by the annual $1,500 reduction and some became homeless. The saving in one area has led to much larger expenses in other areas. What I am striving for as a representative is to help government do a better job of stewarding tax dollars while providing a higher quality of service to constituents. One way to do this is by a wise management of resources to ensure self-sufficiency rather than to spend endlessly on remediation. Spending money on the prevention of problems creates better outcomes at less cost.
Revenues for FY2016 continue to lag slightly behind estimates. January figures revealed that the General Fund was down by just over a million dollars. Contributing to the General Fund were the Corporate Income tax and the Personal Income tax and both of them were up. But Sales and Use tax and the Estate tax was down, making the overall General Fund total below target for the year. The Transportation Fund for January was down by nearly a million dollars for the month of January and down for the year. The Education Fund was down too, mainly because of the Sales and Use tax, the same problem we saw in the General fund. And the Ed Fund was below its yearly projected revenue. Property tax money will replenish the Education Fund once school budgets are passed and voters decide what they are going to spend. While the lack of snow has cut into the room and meals taxes there is some positive news. Compared to last year's revenues for January this year is better. In total the General Fund brought in more than $27 million, the Transportation Fund $1.8 million and the Education Fund was also ahead by $1.8 million over last year. Indications are that we might be seeing growth in the economy this year. Personal income is virtually unchanged and job growth is relatively slow. The Vermont Economic Progress Council recently announced it had no new applications for its program. Locally, see some have some positive growth factors with the opening of the new luxurious Taconic Hotel and soon there will be a ground breaking for the Aeolus Mountain Spa.
It is very important to note that when we hear negative talk about the Vermont economy some deeper digging is warranted. The Vermont Health Connect problem, with it's broken IT System is the extreme case of inefficiency. But that needs to be measured against the good medical service for more Vermonters.
Vermont Aaa Bond Rating
Moody's Financial Summary and Rating Rationale for Vermont 2015 was released with Vermont receiving a "Aaa Bond Rating" with this explanation:
The Aaa rating reflects Vermont's strong financial management, which features conservative fiscal policies, consistent governance, and a proven commitment to maintaining healthy reserve balances. The state's debt is modest, and its economy, while small for a state, is vibrant. The rating also recognizes Vermont's sizeable unfunded pension liabilities, which we consider the state's biggest long-term challenge.
The stable outlook reflects the state's proven ability to continue operating on a balanced basis and maintaining a solid rainy day fund balance regardless of economic cycles. The outlook also anticipates slow progress toward achieving stronger funding of the state's pension liabilities.
Vermont Veterans' Home Update
On January 27, 2016, I introduced H. 650, an act relating to a General Fund appropriation to the Vermont Veterans' Home. The act if passed will fund the Veterans' home for the fiscal year 2017. I am about to introduce a joint resolution calling for the Federal Government to assume all costs associated with keeping the Vermont Veterans' homes operative. Vermonters currently pay over five and a half million dollars per year to keep our veterans home open. In fiscal year 2016, the State will spend $5,894,000 on the Home, which is 28 percent of the Home's overall budget. The other money comes from commercial insurance, Medicaid, Medicare, and private funds. Our Vermont Veterans' Home is not organized as an "official" State veterans' home, as are the veterans' homes in all other states, despite the fact that the Home's mission is similar to that of these comparable health care institutions. Some in the Vermont state government believe that Vermont should not fund the vets home simply because the costs are excessive for the 130 beds occupied and because of concerns around administration of the home. Those concerns are not the ones that I find most compelling. While I agree with cost containment in the Vermont budget as a whole I do not agree that cuts should come at the expense of the loss of the Veterans' home. The Vermont General Assembly's concerns about the operations and funding of the Home led to a recently released legislative study on this topic. One of the suggestions of the study was merging of the Home into the Federal Administration. I would like to push to see this happen sooner rather than later.
I am asking the Vermont General Assembly to seek to hold the federal government's feet to the fire for the funding of our vets home and all the vets homes in the USA. I would like to see Vermont establish a nationwide model for the future governance of the nation's veterans' homes, and believe that a merger, requiring both federal and State statutory and regulatory changes, be set into motion in 2016. My proposal reads in part: Resolved by the Senate and House of Representatives:
That the General Assembly requests that the Vermont Congressional Delegation and the U.S. Department of Veterans Affairs start the necessary federal legislative and regulatory processes required for the Home to be merged into the Administration at the start of federal fiscal year 2018, and be it further Resolved: That the Secretary of State be directed to send a copy of this resolution to the U.S. Secretary of Veterans Affairs and to the Vermont Congressional Delegation.
Steven Berry is a state representative to the state legislature from the district that includes Manchester, Arlington, Sunderland and Sandgate.
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