2011 Legislative Update: Week 11 (3/22 – 3/25)

by Jeff Wilson

State Budget – Last week was capped off early Friday evening (3/25) with a 95 to 34 vote in the House (Wilson voting yes) to approve the FY 12 state budget. The $4.7 billion spending blueprint for the next fiscal year represents a 3.6% decrease in expenditures over the current year. The House Appropriations Committee worked long and hard to close an estimated $176 million budget gap by largely using a mix of spending cuts ($83 million) one-time revenues ($60 million) and new tax income ($24 million net). The new tax revenue incorporated into the package consists of additional so-called health care-related “provider taxes” that are used to leverage additional Federal Medicaid funding. For every $1 raised in these taxes, the state receives $1.60 in Federal aid. For FY 12, under the House plan, additional provider taxes will come from a 27 cent tax increase on a pack of cigarettes, increased taxes on hospitals/nursing homes and a new .08% insurance claims assessment. (Earlier in the week, the House rejected an effort to bolster state coffers through an income tax surcharge on wealthier Vermonters.) The Committee was able to salvage Catamount Health and partially restored some of the human service reductions (mental health, elderly services, developmentally disabled, student assistance program) sought by the Shumlin Administration. The Committee’s proposal survived a number of amendment efforts that came from both ends of the political spectrum; some wanted more spending, while others wanted less. The budget is now off to the Senate for review and consideration. FY 12 represents the fourth fiscal year in row that Vermont has had to cope with a very difficult financial picture. Regretfully, given the almost certain reduction in Federal funding that lies ahead, the fiscal landscape in FY 13 will probably prove be even more dismal.

Health Care Reform – On Thursday afternoon (3/24), the House gave its final approval to H. 202 by a vote of 92 to 49 (Wilson voting yes). This bill, the subject of substantial analysis and debate this year, is a comprehensive and complex treatise that calls for an overhaul of Vermont’s health care system. In the short-term, this legislation seeks to position the State to comply with the new Federal health care law, and sets the stage for the implementation of a
uniform/universal care system (Green Mountain Care) in 2014. Supporters of the legislation viewed H. 202 as the only vehicle on the horizon that had a chance to transition our current health care morass into a system that better ensures cost containment and affordable health coverage for all Vermonters. Opponents, needless to say, are skeptical at best. Although there’s little doubt that H. 202 sets the stage for a possible single-payer system, this type of retrofit cannot be launched until a standard benefits plan is devised, costs are determined, a financing plan and program appropriations are approved by the Legislature and waivers are obtained from the Federal government. Depending upon when/if these hurdles are overcome, the new system will be up and running sometime between 2014 and never. One last note on this topic – It’s important to remember that even if we move to single-payer, Medicare coverage for seniors cannot be diminished through future State action.

Next week – the capital bill and transportation bill (among a host of other things).

– Jeff Wilson, Manchester, Vermont, State Representative

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