Economy

Economy

We Need to Invest in the Right Future

This Mother’s Day, I am thinking about mothers and families all over our country. The past few years have not been easy. In Vermont, families continue to struggle to make ends meet here. In Washington, DC Congress is trying to put together a budget for next year. I’m watching this process closely because our state counts on funding from the federal government to implement crucial programs. The budget process will affect each and every one of my constituents.

The budget passed by House Republicans will slash programs used disproportionately by women and families. In addition to the Medicare and Medicaid cuts you may have heard about, it cuts funding for programs like food stamps, childcare, Head Start, job training, Pell Grants, and housing and energy assistance. Meanwhile their budget allows defense spending to continue to increase.

Each year, Congress appropriates more than half of discretionary spending to the Department of Defense. Even without deficit reduction pressure, this overspending takes dollars away from needed domestic priorities that strengthen our economy and ensure that America can compete in the world marketplace.
 
In the past decade we have spent billions on war. Afghanistan is now the longest war in our nation’s history, and we spent nine years in Iraq. Whether measured merely in direct financial cost, or in the broader and more profound cost of lives lost and damaged, we cannot afford to be a nation perpetually at war.

Some supporters of the Pentagon and their contractors tout money to the Pentagon as a jobs program. Sensible national security jobs make sense, and no member of Congress can ignore the effect of policy decisions on jobs. Nonetheless, economists have shown that federal investments in non-military sectors--like education, healthcare and clean energy--create more jobs than military spending. It makes sense to invest federal dollars in sectors that will create productive jobs that will help our economy grow for years to come.

We can make sensible reductions to Pentagon spending and invest in programs that will help build a vibrant economy for generations to come. This Mother’s Day, let’s honor hard-working women around the nation by calling on Congress to pass a budget that supports women and families and puts us back on the path to a sustainable economic recovery.

This also appeared in the May 5 edition of the Brattleboro Reformer.

Union bill sparks questions about conflict of interest for one representative

April 30, 2012; vtdigger; Anne Galloway

Saturday’s session was meant to be a gavel in, gavel out affair in the House of Representatives, after all, the reps are all but done with their business for the year.

But there’s no telling what can happen in a floor debate and on Saturday, a little bill designed to protect employees turned into big deal and became the catalyst for several hours of debate.

S.95, a piece of Senate legislation that is similar to a bill that was drawn up in the House, prevents employers from using credit reports as part of the hiring process for new workers. Another provision allows school employees to be paid over a calendar year. So far, so good.

It was the third provision of the bill that sent the body into a frenzy of discussion and amendments. It required community mental health agencies that receive state funds to certify that none of the money is used to restrict or interfere an “employee’s rights with respect to unionization.”

Turns out the reporter of the bill, Rep. John Moran, D-Wardsboro, had what appeared to be a conflict of interest, and other lawmakers questioned whether the bill was directed at his former employer, Health Care and Rehabilitation Services of Southeastern Vermont, one of the state’s community mental health agencies.

HCRS was involved in a labor dispute a few years ago, and Moran, a substance abuse counselor for HCRS, was one of the union members who was involved in the fight waged by the United Nurses and Allied Professionals Local 5051.

In 2007, HCRS filed a formal complaint with the House Rules Committee against Moran, regarding what the organization saw as a violation of his conflict of interest limits under House Rule 75.

The letter alleged that Moran had used his position as a lawmaker to put pressure on his employer.

An attorney for HCRS wrote: “Rep. Moran’s public advocacy — wielding the influence of his legislative position — for his own financial gain — is gross misuse of that office; it is possibly slanderous as well, notwithstanding the legislative immunity doctrine.”

HCRS laid off Moran, who worked on a per diem basis, a few years ago. He now works at the Brattleboro Retreat.

Moran says he’s done nothing wrong, and he has nothing to gain from the legislation now under consideration. Besides, Moran says, he was never a union organizer, he was just a member of the union.

“Once I was elected as a legislator (in 2007), I dropped away from active participation in the union,” Moran said.

In the House General, Housing and Military Affairs Committee, of which Moran is a member, lawmakers took testimony in March about the salary levels of the upper management of HCRS and grilled the CEO of the agency about how much money was spent on lawyers to fight the union. The agency spent $1.1 million in salaries for eight executives in 2009. That year, HCRS spent more than $500,000 on the legal expenses for Jackson Lewis, a Boston firm that has a reputation for union busting.

On Saturday, Rep. Helen Head, D-S. Burlington, suggested that the language of S.95 be broadened to include all employers who receive grant funds from the state. The legislation would apply to municipalities, schools and other entities. Employers would have to certify that no funds were used “to interfere with or restrain the exercise of an employee’s rights with respect to unionization.”

The bill passed and is up for third reading on Monday.

The remarks of Rep. Chris Pearson, P-Burlington, were journalized for the record.

“How ironic to have blatantly anti-union motions brought forward on a Saturday,” Pearson said. “After all, it was unions that gave us the very concept of our treasured weekends.”

Over the weekend, the Vermont League of Cities and Towns sent out an action alert asking local officials to contact their legislators and ask “why such a certification is necessary on top of all the requirements already in place for state dollars granted to municipalities.”

According to the League, “every” city and town in the state receives grants of state funds, “town highway aid being among the most widely distributed.”

Karen Horn wrote: “It seems redundant and unnecessary to require a new certification that the municipality is complying with laws already in statute or grant conditions already in place, particularly when it is unclear what ‘records’ shall be required upon request to attest to such certification.”

The Secretary of Administration would be responsible for the certification records. The Shumlin administration opposes the legislation.

On Monday, the House approved the bill on third reading. Attempts by Rep. Oliver Olsen, R-Jamaica, to amend the bill failed.

Labor Bills Stuck on the Wall

For me, a threat to the basic right to organize in any state is a threat to the right to bargain everywhere. After Governor Scott Walkers assault on public employees,  I stood in solidarity with my brothers and sisters in Wisconsin, in Vermont and with all public employees- state, school, municipal and universities. I spoke out at several rallies with a strong message that we are not willing to give up our right to bargain. As co-chair of the Legislative Working Vermonter’s Caucus I helped author and pushed for support of a House resolution resolving that workers in all states, regardless of economic sector and job title or responsibility, must have the basic right to organize and bargain collectively for fair and just outcome. 

At the AFL-CIO convention last fall, Senate President pro tem John Campbell (along with majority leader, Representative Lucy Leriche) presented Wisconsin AFL-CIO President Emeritus David Newby with the senate version of the Legislative Working Vermonter’s Caucus HR0007 resolution supporting bargaining rights for Wisconsin workers.  

Now with Governor Scott Walker and others facing a recall, the Legislative Working Vermonter’s Caucus last week on Wednesday, unanimously supported a resolution urging the state of Wisconsin to enact Senate Bill 233, or similar legislation, restoring the full collective bargaining rights of Wisconsin public employees.

Following the workers caucus on Wednesday, the resolution was introduced on the floor and sent to the House General and Military Affairs committee,  where it joins J.R.H. 23 a Joint resolution expressing deep concern over the growing inequality in wealth and income in Vermont and J.R.S. 47 a Joint resolution urging the United States Postal Service not to implement its proposed major reductions and urging Congress to enact the Postal Service Protection Act on the wall along with other pro labor bills.

Lets hope the senate picks up HR0018 (and others) before the end of the session.

The Good & Bad of the Tax Bill

Last week the House passed this year's miscellaneous tax bill. Sadly the controversy wasn't wrapped up in any income tax equity questions, despite promises last year there was no move to increase taxes for those on top. This wasn't a surprise.

More impressive for progressives was the $6 million tax increase for Vermont Yankee. This is broken down between a property tax increase (putting money into the education fund) and a generating tax (sending money to the general fund). As it happened there wasn't much controversy over this proposal either, in fact it came out of committee on an 11-0 vote. Even Yankee supporters go soft when faced with the prospect of property tax relief.

More frustrating was the quiet re-authorization of the VT Economic Growth Incentive (VEGI) program. This is one of the State's economic development tools where we reward corporations for creating jobs. VEGI was created in 2007 as a dressed up version of VEPC. Last year we extended the program for six months and asked for a comprehensive study presumably so we could determine the wisdom of extending the program for several years.

I stood up on the floor to ask the Ways and Means chair, Rep. Janet Ancel (D-Calais), questions about the VEGI reauthorization. Imagine my surprise to  hear that the comprehensive study called for just last year was not reviewed by her committee. In fact, other than testimony from the tax commissioner and the director of the VEGI program (who wants to keep his job), the committee didn't hear from anyone about the program. How this qualifies as due diligence is beyond me. My amendment to strike the re-authorization was too late for the regular procedure so I asked leave of the House to permit the amendment. The vote just to permit the amendment to come forward failed 40-61.

Following my questions though, a number of other members stood up and echoed my comments. It is irritating to think of tax dollars going to companies that are already growing. We shouldn't pretend our money is vital to job growth, unless detailed analysis proves that to be the case. Before we can make that determination, of course, we would have to actually look at the study.

In the end all of the Progressives voted for the tax bill largely because of the Yankee tax. We will work with our friends in the Senate to see if VEGI can't be explored more fully before it's five-year re-authorization is written into law.

Budget Issues

For the Governor’s proposed budget, each department was directed to cut its prior year spending by four percent, no exceptions. As we review the budget, some of those cuts simply do not work. One area of great concern to the House Human Services Committee is Home and Community-Based Services for the elderly and people with disabilities. This is a service that the legislature has worked on for many years. The premise is that people are happier at home, and care in the community is nearly always cheaper for the state than nursing home placement.

Our problem has been that this program always seems to be first on the cut list. This year the proposed cuts would affect the community agencies that actually do the state’s work. Case management – overseeing the total service plan for an individual – is generally provided by one of the area agencies on aging or a visiting nurse agency. This year the state has decided that those providers are overcompensated and should have their payments cut. The specific proposal would shift from a per-minute rate to a monthly case rate. The change in methodology could work. Saving administrative time is always a goal in payment reform.

The problem is that the rate is far too low. And, incredibly, the department has actually reduced its offer to local providers since it presented its budget to the legislature a few weeks ago. As the state workforce has been reduced, the burden on case managers working through the AAAs and home health agencies has increased. These are the workers who problem-solve, and understaffed state offices have made their jobs more time consuming. We will be fighting hard to save this funding.

Progressive plan promotes tax equity, jobs, savings and carbon reduction

On Friday I was joined by a coalition of legislators promoting a plan to fund the “all fuels efficiency.” This is the project advanced by Shumlin and others a few years ago until Douglas vetoed the bill on account of not caring for the proposed funding source.

Now that Shumlin has to approve the funding mechanism his enthusiasm has waned.

As a reminder, an all-fuels efficiency effort was primarily meant to help Vermonters better insulate their homes. We have old, leaky houses in Vermont and a lot of our heat escapes through the cracks. Better insulation saves the average home $600 - $1,900 a year. Every year. But most of us don’t have the disposable income needed to make the investment. If the state helps with the upfront cost we can create jobs (nearly 300 good-quality jobs), save people money on heating fuels, and reduce our carbon output.

To fund this valuable idea we turn to the income tax. We get a lot of heat in Montpelier for having the “highest tax rate in the country.” This ignores the effective tax rate. And ignores the progressive tax structure of our income tax brackets. Furthermore, last-year’s blue ribbon tax commission study found that overall tax burden on Vermonters isn’t progressive at all; it’s flat to regressive. So it needs addressing.

The proposal raises $17 million and generates an estimated $28 million in economic activity. It raises the money by closing a loophole wealthy taxpayers enjoy. While McClaughery and his ilk take shots at Vermont for our high marginal rate they conveniently ignore that a taxpayer earning $500,000 a year doesn’t pay the top rate of 8.95% on their whole income. The system allows a tax filer to stop at each of the five tiers on the way up the income ladder. So the first $56,000 is taxed at 3.55%, the next $80,000 at 6.8%, income between $137,000 and $209,000 is at 7.8% and so on. Finally any income over $373,650 is taxed at the full 8.95%. Our proposal says someone earning $500,000 a year starts at the fourth bracket (8.8%) and finishes in the top bracket (8.95%). The average change for those in the top bracket is $4,750 and those in the fourth bracket pay about $2,800 more. In total this impacts fewer than 4,000 tax filers so can hardly be described as a “broad-based” tax which Shumlin so opposes increasing.

By bringing effective tax rates closer in line with marginal rates we actually live up to the rhetoric of having the highest tax rates but get to use the revenue that goes along with it. Jobs, savings, carbon reduction and tax equity…what’s not to like?

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