Through its leadership, the legislature has set Vermont on a course towards a new energy future. We are leading the way with policies that maximize energy efficiency, promote the production of energy from clean resources, and create jobs in the new green economy. The wide-ranging energy legislation contains provisions that include:

• Requiring that utilities get more of their power from renewable energy
• Providing incentives for wind developers, and for solar installation for businesses
• Creating the Clean Energy Development Fund that provides grants and loans for research and development, and the deployment of large and small renewable energy projects
• Doubling the budget for Efficiency Vermont
• Expanding weatherization programs for low-income Vermonters
• Establishing new all fuel efficiency programs to help residential customers and businesses reduce their fuel usage
• Helping farmers diversify by producing electricity from farm waste

There is still a lot of work to do in addressing Vermont’s energy future – a future of greater energy independence where we produce more of our energy here at home.  As we achieve this goal, keeping more of our energy dollars in Vermont, our economy will be stronger, our costs lower, and our carbon footprint smaller.  

Safe Roads, Bridges, and Rail

Vermonters expect to drive on safe, well-maintained roads, yet Vermont’s roads and bridges are facing a perfect storm of rapidly aging infrastructure, skyrocketing construction costs, and declining revenues. The legislature -- working under tough budget constraints -- has made strategic investments in road and bridge repair and has laid down the foundation to address the ongoing funding crisis for transportation.

Legislators toured different regions of the state and heard from local officials about a sobering picture of growing need for transportation, a rapidly deteriorating infrastructure and a shortage of funding to address these needs. 

Over one-third of Vermont's 2,700 bridges are deemed to be structurally deficient, functionally obsolete, or both by federal standards.  On a national scale, our proportion of deficient bridges is among the ten worst in the nation.   At the same time a quarter of our roads are now rated by the state as being in very poor condition.  If we merely continue with current funding levels, the transportation agency projects that nearly half of our roads will be rated very poor in three years. 

As part of the economic stimulus package passed by the legislature, an additional $10 million will become available for roads and bridge repair in FY’09, contingent upon approval by the state debt affordability committee.  In addition, a long term program for transportation funding will become a part of the budget-setting process for next year.

The legislature also worked hard to ensure that funds for local road and bridge repair remain secure in spite of a $4.8 million reduction in transportation revenues, thus holding town transportation programs harmless to budget cuts.  Reducing funds for local transportation programs places additional pressure on the municipal property tax. The legislature successfully fought back efforts to further burden local property tax payers in this way.

Rail investment, both passenger and freight, is also a critical part of our transportation future.  The legislature sought to advance funding for rail infrastructure projects along the western rail corridor.

Vermonters should bear in mind that investing now in transportation funding saves us money in the future. During this time of increasing economic uncertainty, it is critical that we get back to the basics and invest in our infrastructure as a strategy for real economic stimulus.  Fixing our roads and bridges will create good paying jobs, pump money into local economies, and ensure that Vermont's products get to their markets, rather than being detoured.

In spite of some progress this year, the gap between transportation needs and the revenues to address them continues to grow wider, and the problems grow worse.  Transportation will remain a critical issue in the years ahead, and the legislature will continue to work hard to find solutions.

A Vibrant Agricultural Economy

This session, the House Agriculture Committee brought two complementary strands of legislative work together:  Support for our conventional dairying economy and diversification to new markets for greater economic opportunity.  Overall we seek a robust agricultural sector that is profitable and environmentally sustainable.

Because dairying still generates approximately 85% of our state’s agricultural income, it is crucial that we continue to support and enhance the profitability of this sector, even as we diversify into other areas of agricultural and horticulture.  Dairying is facing another tough period as fuel, fertilizer, and feed prices are all increasing more rapidly than the price paid to farmers for their milk.  This is true for both conventional and organic dairy farmers.

Our work supports dairying, both conventional and organic, as well as large and small-scale cheese making.  We also work to help develop other agricultural operations, including fruits and vegetables, poultry, grapes and wine, and apiaries.

In addition, we have supported “Buy Local” programs, encouraged the State of Vermont to buy more of its food for schools and institutions locally, increased slaughterhouse capacity, and are working to develop expertise and support for on-farm energy development.  We have also started a farm safety program to help control agricultural worker’s compensation costs; Vermont’s rates are the highest in New England and in the top 5 nationally.

Safe, Affordable Housing

The Legislature worked hard to encourage the building of affordable housing for working Vermonters and ensure that existing housing will be safe for our families and children.

We facilitated the creation of more housing for working Vermonters and passed the first major change under Act 250 related to housing.  Areas that are state designated downtowns, village centers, new town centers, and growth centers can apply to become Vermont Neighborhoods.  Housing developed within Vermont Neighborhoods is subject to local zoning decisions and exempt from Act 250 review.  This new program is designed to protect the rural character of our state and ensure traditional settlement patterns, continuing the smart growth principles that have guided our policy over the last few years.  Further study of these principles will be undergone for rural areas.  Dense development of four or more units per acre in existing centers will be promoted.

Opening the way for much more affordable financing for almost ten percent of Vermont’s housing stock; we allowed permanently located mobile homes to be considered real property.  We clarified requirements around the sale and closure of mobile home parks, providing for a fair and timely process for owners and tenants.  Increased housing tax credits and reductions in the property transfer tax are included for some low and moderate income homebuyers.  At least twenty percent of the homes built under the Vermont Neighborhoods program must be moderately priced.

The Vermont Housing and Conservation Board (VHCB) has been our state’s primary vehicle for funding permanently affordable housing for over 20 years.  Despite the governor’s plan to cut its funding, the Legislature continued funding for VHCB in the FY09 budget. 

We took steps to preserve existing housing, protect our children from the dangers of lead exposure in rental housing, and encourage lead screening for all one and two-year olds.  At the time of sale, homes will have to have smoke detectors that quickly detect deadly, smoldering fires.  We are moving Vermont toward a statewide rental housing inspection system by 2011. 

Together all of this work will help maintain the state’s commitment to public investment in permanently affordable housing. 

Protecting Vermont’s Children

The legislature worked to protect Vermont’s children from toxins and chemicals such as lead and phthalates.  Young children are particularly vulnerable to lead as it has permanent effects on their developing brains.  There is no safe level of lead.  The primary source of lead exposure is lead-based paint in pre-1978 housing and the surrounding soil.  Additional concern has recently been raised about the high level of lead in children’s jewelry and other consumer protects.  The legislature acted to increase the protection of children from these dangers by revising the 1996 lead in housing bill and by outlining the allowable amount of lead in toys, jewelry, and other products used by children under twelve.

In this day and age parents shouldn’t have to worry about the toxic chemicals in the toys their young children play with.  Recent testing has found that many common toys contain high levels of toxic chemicals used in plastics to make them soft and flexible.  Legislation passed seeks to reduce the risk to children’s health posed by these chemicals in infants’ toys and other childcare products for children under age 3 by prohibiting the manufacture, sale or distribution of toys and other products directed to this age group. The European Union, Mexico, Japan, twelve other countries, as well as several other U.S. states have already banned phthalates in products for young children so alternatives are already being produced for those markets.

Child Abuse Reporting
We made significant changes to the way Vermont’s Department for Children and Families (DCF) will respond to reports of child abuse and neglect.  We established a differential response for the department to employ when someone calls about suspected abuse.  This new system will allow the department to have two tracks for working with families: 

1. An investigation track, similar to what happens now where an investigation takes place and a report is substantiated or not.

2. An assessment track, for situations where the reported behavior might not rise to the level of abuse or neglect, but where the family could benefit from support and resources to prevent abuse or neglect from happening in the future.  Assessment services would be entirely voluntary, and would not result in a substantiation or placement of anyone’s name on the child protection registry. This new system should help DCF work more effectively with families in this situation.

The Child Protection Registry, formerly the Child Abuse Registry, will now be tiered, with different levels to reflect the severity of the abuse or neglect that the person perpetrated.  This change should help make the registry more accurately reflect the risk that a person might pose to children, since the registry is primarily used by employers to screen potential employees who would be working with children or with vulnerable populations.

Three of Bill's Mt. Gazette reports were on Protecting Vermont's Children, March 6, March 20 and April 17.  Click on the date to read his column.

Vermont’s Economic Development

As we travel across the state and listen to Vermont employers describe the unique qualities and challenges that our state offers, we are struck by the underlying strengths of the Vermont economy and of the tremendous opportunity to create more well paying jobs for Vermonters.

Employers speak of the unique aspects of the Green Mountain State, of the high quality of our health care and education, and how these attract businesses and employees.  They also warn that in order to encourage economic growth and to create more well-paying jobs our state must address many challenges. 

Employers consistently speak of the challenges of finding a qualified workforce:  The lack of affordable housing, and the need for broadband across the state, improved access to childcare services, and an improved transportation infrastructure.  

Our work in the legislature has addressed these challenges.  We have a broad-based view of economic development.  For us, economic development means supporting families and businesses, about talking of the nuts and bolts while looking forward with expansive vision.

We have worked to bring down the costs of health care, housing, and energy, and have worked to provide better child care, public transit, and other supports for working families.

We have made great strides in bolstering workforce training and supported the new generation of businesses through our support of universal broadband access and our innovative support of digital corporations.  

An example of our innovative legislative work was the passage of the energy bill that will both benefit ratepayers and create well-paying and meaningful jobs.  This legislation will create thousands of jobs in the state’s growing renewable energy and green construction sectors, as well as put money back in Vermonters’ pockets by reducing homeowners’ heating oil usage.  The Rural Energy Council estimates a sustained annual gain of up to 3,000 jobs in the renewably energy and green building sector.  They also site low estimates of 10,000 short-term jobs in the “ramp-up” phase.

We have begun to make the necessary changes to build and maintain our transportation infrastructure -- including public transit.  After all, people who can’t get to work either because of transportation problems or lack of childcare cannot be productive members of the work force; nor are they able to effectively support their own families.

Yes, we are currently facing significant challenges.  Vermonters do not need to be told that we are facing an economic downturn, but if we take the opportunity to make smart investments we will leave a better Vermont for future generations. 

Let’s look at some of our accomplishments:

Transportation
Despite the constraints of the budget, the legislature has made strategic investments in road and bridge repair, supporting town programs, and has set forth a process for facing the ongoing transportation funding crisis.  This work supports economic development and eases pressure on local property taxes.

Broadband
To help modernize Vermont communications, the legislature created the Vermont Telecommunications Authority, and charged it with bringing broadband internet and cell phone coverage to every home in Vermont by 2010.  The VTA will work in partnership with private providers to achieve this goal.  A number of grants in Vermont communities have already been made and the number of un-served areas is beginning to shrink. 

Facilitating Communications
The legislature has made available existing structures such as telephone poles, towers, state-owned buildings, and other structures to facilitate improved reception for cell phones.

Agricultural Loans
The legislature has provided grants to farmers who engage in practices that promote the long viability of soil through crop rotation and through nutrient management programs.  We also provide farmers with financial incentives to preserve water quality through the use of manure injection equipment, which will limit the amount of run-off, reduce odors, decrease greenhouse gas emissions, and reduce the costs to farmers.  These forward thinking investments will help protect the natural and agricultural resources upon which our rural economy depends.

Housing
Economic stimulus provisions were included in our work on housing.  These include short-term loans for the Vermont Housing Finance Agency, or VHFA, mortgage products, consideration of state investment in VHFA bonds, and continued support for the Vermont Housing and Conservation Board.  This work recognizes that housing construction and rehabilitation have a major positive effect on our economy.

Benchmarks
To know how well we are performing, we need measures; we need benchmarks.  This year the legislature passed legislation to help us measure our progress and our performance.  We have asked the Commission on the Future of Economic Development to engage Vermonters throughout our state in conversations about Vermont’s special opportunities and challenges. CFED will then recommend goals and propose verifiable and realistic benchmarks to the legislature so that the legislative and executive branches can chart a better course for our economic future.

We also called for better jobs reporting so that everybody can see and understand just what we have done in creating public or private sector jobs.

Unified Economic Development Budget
The legislature has established in law the Unified Economic Development Budget that will allow us to see and measure the effectiveness of all economic development efforts across all agencies and departments.  This effort, now in its second year, will help administrators better communicate how they account for their work and it will help policy makers and budget writers better understand and decide where to invest for a vibrant economic future. 

Childcare Subsidy
Access to affordable, high quality childcare is essential for workers.  Without it they cannot be the stable employees that businesses need.  This year's Appropriations Bill included $852,000 to move the eligibility guidelines for the state's childcare subsidy program forward.  Presently the program uses a 1999 definition of poverty to determine who is eligible and what their subsidy will be.  The legislature's action will change the base year to 2000 beginning on Jan. 1, 2009.  It's a small step forward in a program that needs a large infusion of money to move the guidelines to the current year and to provide the proper subsidies to childcare providers.

Digital Corporations
The legislature has truly been on the cutting edge when it comes to the recognition of digital corporations.  As the internet grows in popularity, we see that a great deal of business is done online, often by businesses that have little corporate protection.  The people who run them can be scattered all over the globe, never meeting face-to-face.  Vermont is leading the way by allowing a company that has no “bricks and mortar” headquarters to incorporate here, with strict guidelines that protect the company, investors, and the state.  Favorable taxation, fast and friendly service, and a solid legal foundation should be attractive to many new businesses.

Energy
Through its leadership, the legislature has set Vermont on a course towards a new energy future.  We are leading the way with policies that maximize energy efficiency, promote the production of energy from clean resources, and create jobs in the new green economy.

Economic Recovery

Vermonters have known for some time that our economy has been growing weaker. Rising costs for fuel, health care, housing, and childcare have strained our finances. Paying for bills that keep getting bigger with paychecks that don’t is a challenge that too many of us face.  In fact, for several years, the vast majority of Vermonters have not seen an increase in income.

The Legislature began the legislative session by focusing on helping to reduce costs and increase wages for Vermonters. With April news from state economists confirming that we were in a recession, the Legislature redoubled its efforts and established the Joint Committee on Economic Recovery and Opportunity.

The committee reviewed the Legislature’s efforts to enhance energy efficiency and affordability, to repair our roads and bridges, and to improve housing opportunities, as well as to reduce health care costs, to stimulate job growth, and to strengthen Vermont's economy. 

It identified a series of investments designed to improve upon this work and passed a package that included the following:

Additional bonding for transportation projects.  An additional $10 million to help address Vermont’s aging roads and bridges, create new jobs, and provide a needed boost to our economy. Additional funding for transportation investments has been a Legislative priority for a long time.

Expanded investments in workforce training:  Employers continue to look for qualified workers and working Vermonters continue to look for better paying jobs.  The Legislature funded an additional $1 million for workforce training to help meet the needs of each.

Creation of affordable housing:  An additional $700,000 was funded for affordable housing through the Vermont Housing and Conservation Board.  This money will leverage additional funds, resulting in more affordable housing throughout Vermont, and will create additional needed construction jobs.

Expanding energy efficiency:  An additional $500,000 was authorized for the Weatherization Program, resulting in good paying green jobs and helping Vermonters reduce their fuel bills.

Low or no interest lows for manufactures in high unemployment areas:  To preserve jobs in areas hit most hard, the Legislature provided $500,000 to support companies enabling them to maintain jobs and to survive the current recession.

Lower rates for home financing:  By offering short-term credit to the Vermont Housing Finance Agency and allowing the state’s moral obligation to support VHFA’s bonds, the Legislature helped reduce financing rates making housing more affordable. 

The legislature takes seriously its stewardship of the Vermont economy.  The investments it makes now will provide immediate economic support for Vermont families and businesses while keeping an eye to the long term, in maintaining the state’s capacity to respond to the possibility of even further economic deterioration and in planning for the future. 

Veterans

Vermont National Guard members will have access to scholarships that enable attendance at UVM.  We are now able to recognize all Vermont veterans with a Vermont Medal of recognition and appreciation.  In the past this medal was only available to veterans who enlisted in Vermont.  Veterans who are Pearl Harbor Survivors, former prisoners of war, recipients of the Purple Heart, and disabled veterans qualify for a Gold Star Registration License Plate for their vehicle.  License plates with special seals for other military affiliations will be available, too.  The General, Housing and Military Affairs Committee focused on homeless veterans, fostering collaboration among local volunteers and state and national officials working to address this growing problem.

Investments in Vermont’s Workforce

Jobs for Vermonters:  The legislature has worked hard to ensure that Vermonters will have jobs and careers that provide them with satisfaction in life and with appropriate incomes for personal and family support.   The health of our businesses is critical to providing these good jobs for our citizens.  Increasingly, Vermont’s employers are expressing that the number one key to their success in this emerging global economy is having a readily available and well-qualified workforce. 

The problem:  Vermont businesses report that the pool of applicants is often too small and regularly lacks the skills and experience needed, not only for the jobs of today, but more critically, for the jobs of tomorrow.  At the same time, parents tell us that their graduates are leaving the state to find work.  We also hear from hundreds of existing workers that they would like to improve their skills and move out of multiple part-time jobs, into better paying and more satisfying work.  We know that we must take action to decrease our corrections and welfare programs to decrease tax burdens, assist those populations in improving their lives, and meet our businesses’ growing workforce needs. 

Legislative action:  The Vermont Legislature has responded by significantly increasing funding to workforce training programs and by continuing its strong support for higher education through scholarships and direct appropriations to our state colleges and UVM.  We have also continued funding for high school and college internships, strengthening the connection between education and real work.  These funds are part of the State Budget, the Next Generation Fund, and the Economic Stimulus Package.

Highway Safety

In 2006, 15 of the 88 highway fatality victims were between the ages of 16-19.  Youth driving fatalities are so high that the National Center for disease control has determined them to be a public health risk. 

To address these issues, the House of Representatives worked on and passed the following initiatives, but they failed to become law:

Nighttime restrictions for junior operators
The House provided a nighttime restriction of midnight to 5 AM for junior operators, with exceptions for work and school.  Vermont is one of 6 states that does not have nighttime restrictions for junior operators.  According to the National Safety Transportation Board, nighttime driving restrictions have reduced crashes during the restricted time by 60%.

Prohibition of the use of cell phones and hand held devices by junior operators
Testimony in the House overwhelmingly showed that teens, driving, and cell phones are a dangerous mix due to teen’s vulnerability to distractions and accidents.  We know that junior operators are disproportionately vulnerable to accidents and that with each distraction, the rate of a crash increases 4 times.

Hands-free Only for Adults:
While cell phones are a fact of life for many drivers, if you talk on a cell phone while driving, you are four more times likely to get into a serious crash.  We heard testimony that driving while talking on a cell phone is similar to driving while under the influence.

Six other states have hand-held cell bans, including NJ, CT and DC.  Hand-held phones are banned in most European countries.  In a recent poll by Senator Doyle, 71% of the Vermonters who responded said that cell phones should be banned outright while driving.

Primary Enforcement for Seatbelts
Testimony from law enforcement officers, public health workers, and EMT’s all stressed the need for failure to wear a seatbelt as a primary offense.

Helping Vermonters Vote

The linchpin of democracy is the right, ability, and responsibility of every citizen to take his or her beliefs and informed opinions into the voting booth and to vote for whomever he or she believes will best guide our democracy. 

Like a good marriage, democracy needs work to maintain its benefits for all who live under its umbrella; but lately, in Vermont, our democracy has taken some hits. 

Governor Douglas vetoed the Campaign Finance Law again this year.  Vermont’s House of Representatives was one vote short of overriding that veto.  Campaign Finance laws are designed to limit the very powerful influence that money has in our elections.  This is the second year in a row that the governor has vetoed a law designed to limit campaign contributions.  The governor expressed his preference for no limits on the amount of money that the state political parties could give to a candidate.  The House was unwilling to leave the spigot open for an unending flow of money from the state and national political parties to their candidates. 

In addition to vetoing Campaign Finance, the governor vetoed Instant Runoff Voting, or IRV, a method whereby each voter selects his or her first and second choices in an election, thereby avoiding costly recounts and re-votes when one candidate does not win a majority.  This method has been used successfully in local elections in Vermont and elsewhere in the country.

In recent news, the governor’s staff has sent signals that the governor is concerned about the National Popular Vote bill passed by the Legislature.  This bill deals only with the Presidential election.  It is a method whereby the President of the United States would be chosen by popular vote rather than the current system whereby the members of the Electoral College cast votes in a state by state “winner take all” electoral vote, as is current practice.  Four times in the history of our country a President has been elected who did not receive the majority of the popular vote.  The last time was in 2000. 

It seems evident that there are two broad themes in conflict.  One set of beliefs focuses on empowering as many citizens to vote as possible, removing barriers to voting where they are found, and mitigating the influence of the power of money.  The other set of beliefs seems to support limiting the number of voters by adding barriers to voting -- as the US Supreme Court did in upholding Indiana’s requirement for a photo ID before voting -- and empowering money. 

The resolution of these conflicting beliefs will have a fundamental impact on the future of our democracy.

Prison Reform: Save Money, Improve Community Safety

Vermont has a low and declining rate of crime, yet our incarceration rates continue to climb rapidly.  Despite the countless studies that demonstrate more cost-effective ways to deal with crime, Vermonters still needlessly spend tens of millions of dollars in added costs each year.

So the legislature took action.  We created a solution that identifies alternatives to incarceration.  This plan will make us safer and save us millions of dollars.

The new legislation, Justice Reinvestment, invests in drug and alcohol treatment programs, transitional housing, and community-based solutions.  It aims to reduce recidivism -- known as repeat customers to the prison system -- and is estimated to save, in reduced prison costs alone, $50 to $200 million.

The proposal is actually self-funding because some of the savings are re-invested and this helps bring down the cost of state government.

In order to launch the Justice Reinvestment Plan, we use funds that come from prison reorganization.  We will then reinvest them in more forward thinking and effective corrections policies. 

Vermont has nine correctional facilities.  Two of them are for women, one in Windsor, and one in Waterbury called Dale.  This reorganization consolidates all of the women into one facility by moving them to the facility in St. Albans.  We will then shut down Dale, and revamp the Windsor facility into a men’s work camp.  That restructuring is planned to begin in January.

Other cost savings come from new or modified policies and procedures, such as expanded use of electronic monitoring, changes in the reintegration furlough, and changes in probation regulations.

Some of the savings – conservatively estimated at $50 million -- will be realized directly to Vermonters.  The rest of the savings will be invested in alternatives to incarceration, as well as programs designed to address drug and alcohol addiction, and the mental health problems of offenders.  We offer these programs to help offenders become more productive members of society.  Funds have been allocated for this and next year’s budget to provide:

• A pilot program of drug abuse screening and assessment to provide courts better access to alternatives to incarceration

• Transitional housing outside of the prison walls

• Expansion of community services

• Assessment for substance abuse needs

• More substance abuse treatment

• Re-entry housing

Also, of particular concern to Franklin County, $20,000 was invested in holding cells in St. Albans.

These measures will change Vermont for the better.  By investing in our communities, this bill aims to break the seemingly endless and hopeless cycle of crime for many Vermont offenders.  Doing so will save a significant amount of money, and make Vermont communities safer.

Making Government More Effective

Vermont State government is a very large organization.  It is governed by a board of directors of 180 members called the General Assembly.  Its CEO is the governor.

It has 8,500 employees, functions in a dozen major departments and many smaller ones.  Its mission is supported by $1.2 billion in State revenues.  $1.3 billion in Federal revenues are funneled through its agencies and departments.  $920 million in property tax revenues support the education of our children.  In addition, it has the responsibility to oversee 249 other organizations:  Vermont’s county and municipal governments, which are supported by yet an additional $350M in property tax revenues.

No private organization of this size and scope would function for long without a long range plan for directing its mission, without a strategy that is updated regularly to respond to fluctuations in revenue, and without tools in place to insure that the objectives of the organization, however they are agreed upon, are measured and evaluated on their effectiveness and efficiency. 

And neither should the State of Vermont.

This past Legislative session provided ample testimony to the disruption that can happen without such long-term view planning.  There was concern that a plan by the governor to shrink the state government workforce by 400 positions would, absent a long range view, threaten to disrupt the service that Vermonters expect from their state agencies, resulting in very real consequences for Vermonters.

In response, the Legislature created a Joint Legislative Government Accountability Committee to recommend strategies and tools that will help all branches of state government deliver services to Vermonters in an effective and cost efficient way.

The work of this group could make a real difference in the operation of state government, helping it to adapt to the planning, tools, strategies and measures of accountability that have long proven effective in the private sector.

Protecting our Environment for the Future

The Legislature delivered a strong agenda in 2008 to protect our environment.  We addressed some of the important issues facing Vermonters, from the overuse of groundwater to the reduction of carbon emissions.  We looked to improve the quality of water in Lake Champlain and that which we drink.

Some of the key accomplishments are listed below: 

• Designated groundwater as a public trust resource to protect it from unlimited withdrawals by commercial interests

• Created a groundwater withdrawal permitting program to protect home drinking wells near any large groundwater withdrawal

• Improved the Current Use program to allow for the enrollment of conservation lands and improved the administration of the program to keep intact our working landscape of farms and forests

• Reduced mercury waste in our solid waste facilities.  This material can leach into and poison our groundwater

• Required Vermont Yankee operator Entergy Corporation to make whole the Vermont Yankee Decommission Fund to ensure that money will be available to safely dismantle and remove the nuclear power station from the shore of the Connecticut River whenever the plant ceases operation

• Protected water quality through the regulation of stormwater run-off while protecting the rights of property owners along waterways that do not meet Water Quality Standards

• Helped Vermonters save energy, save money, and reduce the amount of carbon we send into the atmosphere by creating an “All Fuels” energy efficiency utility much like the remarkably successful, electricity focused, Efficiency Vermont

• Strengthened and expanded our weatherization program to help Vermonters who are least able to carry out energy efficiency improvements on their own

• Brought our environmental enforcement laws into the 21^st Century by raising penalties and making the process more open to the public

• Required better planning for and appropriate targeting of the funds spent in the Clean and Clear Program to reduce phosphorous discharges into Lake Champlain.
   

The vision to protect our natural resources for the future was the driving force behind our work. We should all be proud of the environmental protections we put in place in this session.

Working to Help Vermont Businesses

Vermont is a leading state in allowing new forms of business.  Our “best in the world” regulations for captive insurance companies have made us the home to most of the nation’s captives.  In fact, our regulation of insurance, in a more general sense,has made us first in the nation for effective, easy-to-use regulation.

In our latest legislative work, we once again have created tools that will encourage businesses looking for a good home.

The first new step is called “Digital Corporations.”  As the internet grows in popularity, we see that a great deal of business is done online, often by businesses that have little corporate protection.  The people who run them can be scattered all over the globe, never meeting face-to-face.  Vermont is leading the way by allowing a company that has no “bricks & mortar” headquarters to incorporate here, with strict guidelines that protect the company, investors, and the state.  Favorable taxation, fast and friendly service, and a solid legal foundation should be attractive to many new businesses.

The other big new step taken by Vermont is to create a new kind of low profit, limited liability company, often called an L3C.  In the past, investors and foundations who wanted to invest in a non-profit company while still earning a limited profit had to go through an arduous and expensive process of gaining approval from the IRS.  Now, by creating laws that automatically conform to the IRS guidelines, investors – who are often charitable foundations -- will qualify without spending most of a year and many thousands of dollars.

Domestic Violence

All Vermonters should be safe from domestic and sexual violence in their homes.  In response to that goal, the Vermont legislature completed several years of work to create many changes in the way our state responds to domestic violence, and directed significant new resources toward preventing this crime in the future.  It increased the penalty for domestic assault, enhanced criminal statutes addressing aggravated domestic assault and violation of an abuse prevention order, and created a new crime of interfering with a victim’s attempt to access emergency services like police or medical attention.  We also made changes to civil law, enhancing protection orders and providing new guidelines for courts to use in determining how to set up safe visitation for parents who have committed domestic violence.  We created a statewide Domestic Violence Council to coordinate statewide responses to domestic violence, and much more.  Perhaps most importantly, we provided over $880,000 in new funding to prevention programs and direct services to victims of domestic and sexual violence statewide.  This vitally important funding is raised by increasing surcharges on fines for people who break the law, and by increasing the state’s marriage and civil union license fee.  More detail on our work:

Criminal law changes:

• Increases the domestic assault penalty from 12 to 18 months

• Improves the second degree aggravated domestic assault statute to make it more comprehensive

• Creates a new crime of interfering with access to emergency services

• Enhances the crime of violation of an abuse prevention order, reflecting the serious nature of criminal activity that directly violates a court order intended to provide safety for victims

• Creates a new requirement of law enforcement training for all officers in the state

Civil law changes:

• Enhances protection orders to protect victims whose perpetrators are incarcerated

• Encourages supervised visitation when one parent has abused the other and provides guidance for courts in providing for the safety of children when one parent has abused the other parent or the children

• Allows emergency hearings to modify visitation when a parent fears for their safety or the safety of their child

Other supports provided by our work:

• Creates the statewide Domestic Violence Council in statute to provide statewide leadership in promoting a coordinated community response to domestic violence

• Creates a committee to study the issue of housing discrimination against victims of domestic violence

• Creates a committee to study schools’ response to bullying and harassment, including cyberbullying – behaviors that we know can be linked to dating violence and abusive behavior later in life

Provides access to state health care programs for victims of domestic violence who lose their health insurance as a result of the violence.

Advancing Worker Protections

Protecting the rights of Vermont’s workers was a priority for the legislature this year.  Our work resulted in progress for working Vermonters in a number of ways. 

Perhaps, most significant was our decision to study how current employment law is being complied with by employers and enforced by our state government.  Similar studies in surrounding and nearby states like New Hampshire and Rhode Island have yielded results that have protected employees and have lowered rates that employers pay for workers’ compensation coverage.  While there is widespread anecdotal evidence of the deceptive practice of employee misclassification in Vermont, it has been over a decade since the VT Department of Labor has taken any enforcement actions. 

We have also allowed employers to pay for workers’ injury-related health care expenses without reporting minor injuries, provided that the worker misses no more than a day of work and incurs medical costs of less than $750.  The new law also requires that small businesses be offered workers’ compensation policies with deductibles. 

In other legislative work, whistleblower protection was extended to state employees who speak up about job related problems.  Also, employers were required to provide reasonable accommodations to nursing mothers who seek to express breast milk at work.  Many mothers stop breastfeeding altogether when they return to work.  This measure requires employers, when it will not disrupt operations, to provide a private space – other than a toilet stall -- for this purpose.  The bill is expected to increase breastfeeding rates and strengthen health outcomes for babies.

Worker’s Compensation

The Legislature has taken strong action to balance the needs of those injured on the job and the pressure on businesses to cover the significant costs of these accidents and related expenses.

Vermont’s Workers’ Compensation program is a mutually beneficial compact between workers and their employers that has been proven over many decades to save businesses money by preventing lawsuits for negligence, while providing injured workers medical care and reasonable indemnity for lost wages and other expenses.

Though the amount of money a business saves through this program is considerable, the cost of the program is undeniably substantial.  The House tackled the difficult question of balancing costs versus worker benefits again this winter, making changes aimed at reducing workers’ compensation costs without drastically reducing benefits.

We created a new task force that will study ways to reduce fraud, which tends to occur in cases where workers are misclassified as independent contractors when they really are employees, and when other workers are miscoded in wrong job categories, in order to keep more money from going into the system.

We increased the time that some injured workers have to wait before receiving cost of living increases. We now require that all disputes between workers and insurers be heard by a mediator before any formal hearing is held.

Most importantly, we have created a new “$750, first-aid only” method for employers to pay directly for small injuries without reporting them to their insurer.  We also now require that insurers offer a policy with at least a $500 deductible.

Taken together, these changes should help to hold down costs for employers while providing a reasonable solution for the needs of employees.

Maintaining our Commitment to Mental Health Services

The Vermont Legislature worked hard this year to live up to our commitments to Vermont adults and children who receive mental health support in our communities. While most areas of state government saw reduced or level funding, we were able to give both inflationary and caseload increases for these important services.

These are tough economic times for most Vermont families.  When stress is high, people who are burdened with mental health challenges -- and in their children -- have an increased need for support to maintain stability.

The legislature rejected one significant cut proposed by the Douglas administration that would have left without support many families who have developmentally delayed young adult children.  While there are always valid arguments for more funding, this restoration of funds -- along with the inflationary and caseload increases provided to community mental health agencies, the State Hospital, and our community schools -- amounts to a successful year in maintaining our commitments.

The vast majority of Vermonters who seek mental health support for themselves and their children depend on private mental health counselors, doctors, and psychiatrists.  These Vermonters, along with their private providers, have expressed frustration for some time about unfair health insurance practices that directly interfere with necessary care.  This year, the legislature sent a strong message to the insurance carriers and their contractors that they must follow our mental health parity laws.  We directed the Health Care administration to apply our regulatory standards to the managed behavioral health companies with whom our insurance companies contract.

Moving Vermonters out of Poverty

Helping Vermonters move out of poverty was an important focus of the legislature this year.  Providing real and meaningful job opportunities for those on public assistance, for those in prison, and for those with disabilities is critical to helping these people change their lives.

It is also vital to meeting the needs of our employers in finding a well-trained workforce. The legislature substantially increased funding for workforce training programs designed to help Vermonters get into well paying jobs, either for their first time, or as a transition to a new job or career.  We also continued funding for programs to reduce the high school drop out rate and to inspire students to continue their education and/or training after high school.

The legislature provided funding to begin a program called Reach Ahead.  This program will allow Vermonters leaving the Temporary Assistance to Needy Families with Children program to retain some of their benefits so they can transition successfully from poverty into the workforce.  New workers are often overwhelmed trying to make ends meet when they first begin working.  Providing some assistance in the early months will improve the chance of success.

Moving Vermonters out of poverty is an important objective for the state.  Everyone feels better about their life when they are able to be contributing members of society.  Children who live with parents and who are successfully working are likely to become productive citizens themselves.  Increased efforts in workforce training and providing a smooth transition out of poverty and off from assistance programs make good sense for Vermont.

The Right Budget in a Challenging Year

In difficult economic times, Vermonters expect their leaders to make the tough decisions necessary to keep our fiscal house in order.  We were able to do just that despite continuing bad news about the economy and state revenues.   The legislature built a budget that will make investments in the crumbling transportation infrastructure, and will reduce pressures on both property taxes and the cost of health insurance.

The Appropriations process got off to an inauspicious beginning in January when the general fund revenue forecast for FY2009 was downgraded by $14 million.  In April, the forecast was further downgraded by $24.5 million.  At the end of a rocky road, the legislature passed a balanced and responsible budget that reflected our goals and values.  It did not make the Medicaid cost shift worse and did not put more of a burden on the property tax.

One component of the increase in health insurance costs is the cost shift from the state to hospitals and doctors who provide Medicaid services.  When the state doesn’t pay its share, Vermonters paying for private insurance end up paying the difference.  The legislature’s goal was to make certain the cost shift didn’t get worse.  To that end, the Medicaid portion of the budget restored money the governor had proposed to cut for both hospitals and physicians.

Shifting costs onto the property tax is a strategy that has been used in the past during tough financial times.  In addition to avoiding shifts onto the cost of health insurance, the legislature increased funding for town programs over the levels proposed by the governor.  Payment In Lieu Of Taxes (PILOT) funding was increased by over $1 million, an amount that will substantially reduce property tax pressure in towns that have state owned buildings. 

Creating more affordable housing stock is critical to Vermont’s future.  The budget proposed by the governor reduced funding for the Vermont Housing and Conservation Board by a total of $5.2 million.  This would mean building 150 fewer units of housing.  The legislature’s budget restored this funding, thereby keeping the House’s commitment to progress in the creation of affordable housing.  Furthermore, as part of the economic recovery package passed in the legislature’s final days, an additional $700,000 was appropriated for housing to create jobs and keep housing affordable.

Improving the viability of Vermont’s businesses was a session-long focus.  The budget increased Next Generation funding by $1 million and added an additional $1 million specifically for workforce training efforts as part of the economic recovery package.  The appropriation for the subsidized childcare program was substantially increased because access to childcare is an important element in providing the stable employees our businesses need.  

Finally, the budget focused on programs that assist Vermonters who need help meeting their needs.  The legislature refused to accept the governor’s proposal to reinstate co-payments for the elderly in our pharmacy programs and to double premiums for Vermonters on Medicaid.  We made certain many more young adults with special needs would get the services that will allow them to live and work in our communities as they leave our high schools.  A $500,000 increase in substance abuse programs will continue our important efforts in these areas.   From programs for pregnant teens to child abuse prevention and our community justice centers, we added money where we could.

The Legislature’s budget makes the best possible use of our limited resources.  It will not make the Medicaid cost shift worse.  It will not shift costs onto the property tax.  It will make investments in Vermont’s economic future.  It is the right budget in a challenging fiscal environment.

Education Cost Containment

The Vermont legislature took a number of steps this past session to reduce pressure on the property tax. 

Property taxes are the primary source of funding for Vermont schools.  Even though Vermonters have shown that they value their schools through consistent support of their local school budgets, they also believe that we must find strategies to contain education costs. The legislature has responded to this in a number of ways: 

1)  We have asked the Department of Education to find ways to encourage innovative approaches to collaboration and other joint endeavors.  Since pressure on the property tax comes from municipal spending as well as education spending, we have suggested that projects involving collaboration between schools and municipalities be considered as fund recipients.

2)  We substantially reduced the number of reports to be prepared by school administrators, school boards, and the commissioner of education. 

3)  We have taken steps to suspend special education audits -- of which only one a year was being performed -- until the department comes back to us with recommendations that would reduce the burdensome requirements of these audits and improve their efficiency and effectiveness. 

4)  Consolidation of school districts may result in cost savings, but the process for consolidation is cumbersome.  We simplified the process and clarified a number of ambiguous statutes. 

5)  By refusing to go along with the administration’s attempt to increase the health care cost shift, we have protected premiums paid by schools and municipalities from increases that don’t reflect the higher cost of services. 

At the beginning of the session, the governor proposed to lease the lottery -- a state asset -- for $50 million.  Even though the lease price was speculative and the money would not have been available until FY 2010, the governor proposed spending that money in FY 2009 for school construction, as well as to reduce the property tax rate by two cents.   The public wasn’t fooled.  They understood that this idea was bad policy and they solidly backed our decision not to go along.

This left us with an apparent hole of $50 million for the coming year.  In spite of the lottery “hole” and falling revenues, we were able to allocate $10 million for school construction, and we managed to keep town highway funding at the level recommended by the administration.  In addition, we decided to move forward with a proposal to raise $10 million in bonds to fund highway projects, some of which will go to town projects. 

We also increased Payment in Lieu of Taxes (PILOT) payments by over $1 million.

There are many reasons why property taxes continue to increase.   Helping school districts contain costs is one way we can reduce the pressure.  We’ve done that.  Another way is by being vigilant in protecting the education fund and maintaining our commitment to town highway and bridge projects.  We’ve done that.  Finally, by resisting bad policy, such as leasing a state asset to raise one-time money.  We’ve done that, too.