by John McClaughry
The 2019 legislative session is now history, and it’s worth taking stock of its accomplishments, both positive and negative.
On the plus side, the FY2020 general fund budget is balanced (up 3.1%), that is, it’s balanced if the $55 million FY2019 surplus projected last January actually shows up. The main reason for the surplus is the economic boom produced by the 2017 tax bill enacted by a Republican President and Congress. Naturally, the Democrats in Montpelier aren’t eager to make that point, but they’re very happy to spend the money.
The new money allowed the legislature to dedicate 6% of the 9% rooms and meals tax to fund the EPA-required Lake Champlain cleanup. That leaves a $9 million hole in the General Fund next year, to be filled by the newfound surplus money without raising any tax rates. Whether this scheme will reliably fill $12 million holes in following years may prove to be a troublesome question.
Another $27.5 million of the new money will go to funding post-retirement health care benefits for state employees. The legislative leadership, pressed by the state employees’ and teachers’ unions, is commendably trying to catch up, although the $4.5 billion total liability won’t be funded in anyone’s lifetime.
Remarkably, House and Senate Democrats failed to pass their two highest priority measures, the minimum wage increase and a payroll tax-financed family leave program. Gov. Scott is likely to again veto a minimum wage increase, and probably a payroll tax leave bill. Some House Democrats are starting to listen to small business concerns, and some are worrying about the increased costs to the Medicaid home care budget. There may well be enough of them to join with Republicans to sustain a veto. We’ll find out next year.
The “yield” bill that determines local school property tax rates contained a one cent increase in residential and nonresidential yields. As Rob Roper has pointed out, “this is necessary to fund an additional $70.5 million in new spending this year — an increase of 4.5% — for a system that continues to lose student population. K-12 enrollment dropped from 76,220 to 75,510 between the 2016-17 school year and the 2017-18 school year, continuing a 20-year trend that shows no signs of slowing.” No matter how many students disappear, public school spending will never turn downwards so long as the public sector enjoys its unionized monopoly.
The battle against the Menace of Climate Change proceeded apace, although without the revenues from the failed carbon tax there isn’t much money available. The legislature voted more subsidies for plug-in electric vehicles “to help Vermonters benefit from electric driving, including Vermont’s most vulnerable.” The transportation bill found $1.8 million to pay for two electric city buses for Burlington. That bill also diverted $5.2 million from fixing deteriorating highways to subsidizing passenger rail from Rutland to Burlington, certainly one of the state’s least pressing needs.
The proposed doubling of the heating oil tax to fund more home weatherization failed, but the legislators did find $1.7 million to expand this giveaway program, instead of asking the beneficiaries to pay for the weatherization from their energy savings.
Another last minute provision mandated a study of launching passenger rail between Barre and Montpelier – all of seven miles. That would give wind tower and solar panel mogul David Blittersdorf a chance to turn his five diesel-powered Budd cars into moneymakers instead of museum pieces.
On the plus side, the legislature gave up trying to impose a tax penalty on Vermonters who haven’t bought state-approved health insurance. All those people have to do is tell the State that they aren’t complying, and the State will assign an outreach person to try to change their minds. On the down side, the legislature prohibited any new association health plans, because they were letting people escape the clutches of Obamacare.
Thanks to Democratic Senators Kitchel, Mazza and Ashe, the Senate again refused to accept Rep. George Till’s primary seat belt law, which would allow the cops to stop and ticket any adult driver for not having his or her seat belt buckled.
On the down side, the legislators approved a 24-hour waiting period for a lawful handgun purchase. It’s supposed to reduce suicides, but more likely it will leave a helpless woman defenseless when her angry ex comes by with revenge in mind.
A notably nutty bill is the plastic bag ban. Next year your grocer can’t put your purchases into a one-use plastic bag. Why? Because those bags are made out of natural gas, and we need to burn that natural gas to provide grid backup power to all those wind towers and solar panels that only produce a third of the time. (Actually no one made that argument, but you’d think the climate warriors would rather turn natural gas into plastic bags than burn it and release carbon dioxide.)
Instead of the plastic bag, the store can sell you, for ten cents, a nice paper bag made by slashing and chipping the forests that the budget bill declares “are important for carbon absorption”.
Bills not acted upon this session are alive for 2020 so we’ll probably see more silly and potentially economy-wrecking climate change brainstorms, at least until the needs of dependent families, Medicaid recipients, deteriorating highways, lake cleanup, retirement funds and other really important causes gain the upper hand in the competition for available funding.
John McClaughry is vice president of the Ethan Allen Institute (www.ethanallen.org)