Vermont Lawmakers Boost Economic Development

State Capital Notes …

Vermont lawmakers passed a $5.5 billion budget along with $5.5 million in new taxes.

Property taxes were raised 5%. Spending overall increased by 4.1% over the prior year. The budget included a 1.6% increase in reimbursement rates for health care providers who accept Medicaid payments, which will cost $2.6 million. Lawmakers also increased the cigarette tax by 13 cents.

The Budget

The budget includes:

• $3.5 million from supplemental property tax relief fund to pay for educational data initiatives
• $4.5 million to the Enterprise Incentive Fund to retain jobs in Vermont
• $500,000 for Vermont Economic Development Authority for entrepreneurial lending program
• $2.2 million for raises for newly unionized home health care providers
• $1.5 million for working land investments*
• $19 million total for Vermont Student Assistance Corporation (VSAC)—a 1% increase
• 1% increase for Vermont State Colleges

* The backbone of Vermont’s heritage and economic viability is the “working landscape” consisting of agriculture, food system, forestry, and forest product-based businesses. About 20% of Vermont’s land is used for agricultural purposes and 75%as forestry.  In 2012, the Legislature passed the Working Lands Enterprise initiative for the management and investment of $1 million into agricultural and forestry-based business.Session Highlights

With the support of Gov. Peter Shumlin, lawmakers raised Vermont’s minimum wage from $8.73 an hour, which is nearly a dollar above the federal minimum, to $9.60 in 2016, $10 in 2017 and $10.50 in 2018. Beginning in 2019, the minimum wage will be indexed to inflation.

Lawmakers also passed a comprehensive economic development bill, providing support for start up, expansion and retention of high tech companies that offer good wages in Vermont. It creates the Vermont Strong Scholars and Internship Program to assist families with access to a college education and adds $500 million to the Vermont Entrepreneurial Lending Program which already has $1 million in federal funding.

In the area of genetically modified organisms (GMO), legislators passed a law requiring that food produced totally or partially produced from genetic engineering be labeled as such. The Vermont General Assembly established The Vermont Food Fight Fund to be used for implementing the requirements of the law. Private donations will be accepted for the fund, which will help Vermont establish its labeling law and address anticipated legal challenges. The attorney general shall report to the General Assembly in January 2015 regarding whether milk products will be subject to a labeling requirement of the law.

Lawmakers also passed a comprehensive package of bills aimed at curbing addictive drugs. The bills include implementing standards for doctors to consult the Vermont Prescription Monitoring System to ensure patients are not “doctor-shopping”—obtaining controlled substances from multiple health care practitioners without the prescribers’ knowledge of the other prescriptions.

The legislation also creates a pilot program for wider distribution of a drug that reverses opioid overdoses. The law also:

• Implements participation in a national database to track the sales of non-prescription, over-the-counter chemicals used in the manufacture of methamphetamines (this real-time monitoring can prevent the excessive sales of those chemicals to a purchaser);
• Establishes an unused drug disposal protocol so unused prescription medications don’t fall into the wrong hands; and
• Creates an outreach program through the Department of Public Safety to educate pawnshop owners and precious metal dealers about laws dealing with the purchase and sale of precious metals that might have been stolen in drug-related robberies.

Vermont banned the use of hand-held cell phones while driving, beginning Oct 1, 2014. Under the final bill, first violation for driving while using a hand-held device carries a fine up to $200, with steeper fines and points assessed against a driver’s license for subsequent offenses.ands-free use is permitted under the law. The penalty for texting while driving carries a fine and two points against a driver’s license. Accumulation of 10 or more points in a two-year period results in automatic license suspension.

Efforts to consolidate school districts failed despite efforts by members of the House and Senate Education committees. House bill 883 would have reduced the number of school districts from 270 to 50 over a six-year period. (Vermont has the smallest number of students per school district in the U.S. The average school district has 313 students, according to a report made to the legislature in 2009.) The Senate Education and Finance committees’ proposal for consolidation included a package of incentives for school districts to voluntarily merge. Lawmakers chose in the end to pass House Bill 876, which includes a process to develop a statewide hearing on the issue of school district consolidation.

Higher Education Legislation Enacted

Vermont Strong Scholars and Internship Program

The Vermont Strong Scholars and Internship Program is part of a larger economic development bill. It establishes a scholarship program, which provides for high school graduates to attend up to two years of college for free. The law forgives a portion of student loans for eligible students issued by VSAC. The loan- forgiveness program is open to Vermont residents enrolled in a qualifying postsecondary institution on or after July 1, 2015. It also provides for a loan forgiveness program to those graduates who stay in the state and work in key sectors of the economy.

State Authorization Reciprocity Agreement

Vermont state budget amendments allow the state to enter into interstate reciprocity agreements for purposes of authorizing online postsecondary programs. The secretary of the Agency of Education or another appropriate Vermont agency will address any complaints relative to Vermont institutions participating in a recognized interstate reciprocity agreement.

K- 12 Legislation Enacted

An Act Relating to Providing Access to Publicly Funded Pre-K Education

Provides that pre-K education will be extended to all school districts in Vermont. Over 80% of school districts in the state already offer some pre-K programs. The new law will require school districts to offer at least 10 hours of instruction for 35 weeks to any preschool-aged child. The state will reimburse districts of qualified pre-K programs offered by private or public providers.

Carolyn Morwick handles government and community relations at NEBHE and is former director of the Caucus of New England State Legislatures.