by Rob Roper



Since January Governor Peter Shumlin has been pressuring state pension fund managers and lawmakers to sell off coal and Exxon/Mobil holdings. The Governor says (now) this policy is necessary to combat climate change. If enacted, however, divestment will do virtually nothing to reduce carbon emissions — but could cost Vermont taxpayers millions. Because state pension funds are overwhelmingly “defined benefit,” meaning the payout is guaranteed regardless of how well the pensions’ investments do, it is once again the Vermont taxpayers who will be put on the hook for a worthless program that will have no impact on the environment.

Let’s look at the facts. Vermont Treasurer Beth Pearce calculated that fossil fuel divestment would cost the state pension funds approximately $10 million per year in foregone returns and $8.5 million in implementation fees. Even a less ambitious sell-off of investments would result in financial loss. Money contributed by and meant to benefit Vermont’s nearly 50,000 retirees would vanish, and taxpayers would ultimately be on the hook to make up the difference. (Keep in mind that our state pensions have already been mismanaged by Montpelier to the point where they are facing a $3.8 billion unfunded liability. Divestment just adds fuel to this fire.)

Divestment is a bad policy that politicizes what should be the non-political function of funding state pensions in the most efficient and effective way possible. It is kowtowing to a small, loud group of activists, well funded by out of state sources and pushing an agenda that has nothing to do with state workers’ retirement benefits. Most notable among this crowd is Bill McKibben of 350.org.

Governor Shumlin very recently rejected the concept of divestment. In fact, less than two years ago the governor argued that “…owning the stocks and having a seat at the table with the oil companies — is a good place to be.” Even McKibben and other divestment activists have even acknowledged the fact that divestment does nothing to directly reduce carbon emissions. So why the Governor’s flip-flop? He had it right the first time!

Fortunately Treasurer Pearce and other responsible officials have dutifully warned that handing over investment decisions to legislators and political leaders undermines the prudent process put in place by statute. It is the mission of the Vermont Pension Investment Committee (VPIC) to manage investments of the retirement systems, “with integrity, prudence, and skill to meet or exceed the financial objectives of the beneficiaries of the funds,” VPIC says. In short, it is VPIC’s sole fiduciary responsibility to protect the financial interests of Vermont’s hard working pensioners while maximizing returns and minimizing risks.

Allowing politicians to meddle with investment funds to fan the flames of unrelated political agendas is not a recipe for financial success. 
Treasurer Pearce is not alone in upholding these statutes in Vermont. In 2013 then-President Ron Liebowitz of Middlebury College firmly rejected divestment on the basis of the board’s fiduciary responsibilities. At the University of Vermont, Finance and Investment Committee Member David Daigle announced UVM’s rejection of divestment in a similar vein, saying, “Our primary responsibility is to protect the endowment and my continuing fear is that this proposal would have a significant impact on the ability to balance the risks and rewards within the endowment by cutting out a substantial portion of the economy.”

It is wrong, and costly, to violate fiduciary responsibility to pensioners, students, and Vermont’s citizens in general. It is even worse to cloak a political agenda under the guise of environmental responsibility, when it is clear that divestment will not address climate change. Vermonters deserve a real debate about the immediate and long-term environmental impacts of generating the power we need to drive our economy. Divestment, as a strategy for economic and environmental success, it’s a dead end.

- Rob Roper is president of the Ethan Allen Institute

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Posted by Rob Roper

Gun Rights opponents are getting bolder and more aggressive in Vermont. Despite the fact that this is an election year, something that usually deters discussion of these issues in our rural, sportsmen’s oriented state, several pieces of legislation are moving forward with a surprising amount of support.

The most visible bills are in regard to Burlington’s request for charter changes that would allow the city to make mandatory “safe” storage (H.566), give police authority to confiscate firearms from people suspected of domestic violence (H.567), and prohibit firearms on the premises of places that serve alcohol (H.568). These bills are sponsored by 28, 30 and 29 Representatives respectively (click on the respective links to see who).

Speaking at the House Republican Caucus meeting on February 2, Ron Hubert (R-Milton) of the Government Operations Committee where these bills are being considered, said that their passage would “gut the Sportsman’s Bill of Rights.” They are also, he warned, unconstitutional. If challenged in court, the State of Vermont could be looking at $12 million in legal costs defending – and losing – cases brought in response should these bills become law.

Hubert also went on to describe some of other absurd (and alarming), unintended consequences these charter changes could bring about for people hosting weddings or other such events at their homes, golfing, or even strolling casually down Church Street. (Watch the VIDEO for details.)

Related to the Burlington Charter Change bills is another, H.R. 11, sponsored by Rep. Tim Jerman (D-Essex), that would “allow municipal charter bills to be read three times without referral to committee.” That’s Montpelier-speak for cutting out public input. Gun Owners of Vermont points out that Jerman has taken $1700 from GunSense VT, an anti-Second Amendment organization.

Two other bills getting some attention are H.709, sponsored by Tom Stevens (D-Waterbury and George Till (D-Jericho), that “proposes to require an insurer that writes homeowner’s insurance policies to require a policyholder to disclose to the company whether the homeowner or member of his or her household possesses a gun that is stored on the insured property.” And H.775, sponsored by Rep. Till and 22 others, that “require that a criminal background check be conducted on the proposed purchaser before a firearm may be sold unless the sale is between immediate family members, by or to a law enforcement agency, or by or to a law enforcement officer or  member of the U.S. Armed Forces acting within the course of his or her official duties.”

- Rob Roper is president of the Ethan Allen Institute

 

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by John McClaughryJohn McClaughry

In his January budget message, Gov. Shumlin announced a new source of tax revenue to help fill the ever-gaping Medicaid budget deficit ($55 million in Fiscal Year 2017).

He proposed that the provider assessment now applied to hospitals and nursing homes be expanded to independent physicians and dentists, at 2.35% of net patient income. “This will,” he said, “raise $17 million in state funds and draw down $20 million of the federal dollars that we’ve been leaving on the table.”

This game began in 1991. In that year the legislature (ill-advisedly) bought into a Massachusetts-invented scheme called “MediScam”.

The Federal government matches state money raised to fund Medicaid. The matching percentage (called FMAP), is approximately 55% for 2017.

The scam came in when the state levied a “provider assessment” (tax) on hospital net patient revenue, and similar assessments on  nursing homes, home health agencies and Intermediate Care Facilities, to produce its 45%. At the same time the state promised the providers that they’d get back their “assessment”. Then the state could spend the remaining 55% as “free Federal money” to keep Medicaid afloat.

When MediScam threatened to produce a Treasury raid by the states, Washington capped provider tax assessments at 25% of state Medicaid expenditures. The $17 million of new assessment revenue will put Vermont at 97.565% of the Federal cap. This is the “free federal money” that Shumlin says has been “left on the table” by Vermont’s failure to maximize its taxes on its health care providers.

The new tax would fall on independent primary care doctors, dentists, osteopaths, psychiatrists, naturopaths, and (certain) specialists.

Of the $17 million Shumlin expects to collect from the doctor-and-dentist tax, $12 million, matched by $26.3 million in Federal funds, will be used to partially fill the annual Medicaid deficit hole. A total of $8.4 million will be used to increase Medicaid primary care reimbursements, and $1 million will increase Medicaid dental care reimbursements.

Doctors and dentists who have no Medicaid patients will have to raise their charges to private patients to pay the new tax.  Because they’re independent, they cannot effectively bargain with health insurers for increased reimbursements. That means the providers are likely to have to absorb the provider tax.

The Vermont Medical Society opposes the doctors-and-dentists tax because of “the devastating impact such a tax would have on the state’s ability to attract and retain physicians, and the resulting decrease in patients’ access to care in the face of current and worsening physician shortages.”

An independent Burlington psychiatrist, Robert Emmons MD, who treats Medicaid patients at no charge at a free clinic, writes “I cannot recoup the tax in the form of higher Medicaid reimbursements. If the Governor’s proposal is enacted, the entire 2.35% tax will be passed on to all my patients, along with the administrative cost, so it is really an illnesstax, not a physician tax”.

What seems clear is this: there is an immediate, desperate need to pay for constantly escalating Medicaid costs. But beyond that, there is a need to drive independent doctors and dentists into the employ of large scale health care institutions, organized into an all-inclusive Accountable Care Organization.

Then Shumlin’s  promised “All Payer” system – his latest invention to succeed his abandoned Single Payer plan – cannot be thwarted by independent doctors and dentists dedicated to serving their patients at reasonable prices, prices that don’t include the inflated “facility fees” added on by hospital-owned practices.

A major concern with grand Single Payer or All Payer health care schemes is that falling reimbursement rates will cause doctors and dentists to depart the state. The Hsiao Report of 2011, that formed the basis for Green Mountain Care, allocated $50 million of the enormous expected savings to pay doctors not to leave. Shumlin’s doctors-and-dentists tax won’t pay them not to leave. It will tax them for staying.

–  John McClaughry is the founder and vice president of the Ethan Allen Institute (www.ethanallen.org).

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Posted by Rob Roper

Thirty-three members of the Vermont House of Representatives have sponsored a bill (H.841) that would double the Fuel Gross Receipts tax from 1/2% to 1%. This would double the tax on heating fuel and dyed diesel, and would affect ALL SALES of heating oil, propane, kerosene, dyed diesel, coal and natural gas. Electricity is exempt from the tax increase.

Who in Montpelier Supports Increasing the Fuel Gross Receipts Tax? See below.  Click on the name to contact them.

Addison County

Rep. Diane Lanpher

Bennington County

Rep. Rachael Fields

Caledonia County

Rep. Joseph Troiano

Chittenden County

Rep. Joanna Cole

Rep. Johannah Donovan

Rep. William Frank

Rep. Jill Krowinski

Rep. Martin LaLonde

Rep. Joan G. Lenes

Rep. Curt McCormack

Rep. James McCullough

Rep. Jean O’Sullivan

Rep. Christopher Pearson

Rep. Kesha K. Ram

Rep. Mary Sullivan

Rep. Michael Yantachka

Franklin County

Rep. Daniel Connor

Rep. Kathleen Keenan

Lamoille County

Rep. Avram Patt

Orange County

Rep. Susan Davis

Rep. Patsy French

Rep. Marjorie Ryerson

Rutland County

Rep. Robin Chesnut-Tangerman

Washington County

Rep. Mary S. Hooper

Rep. Warren F. Kitzmiller

Rep. Francis McFaun

Rep. Thomas Stevens

Rep. Tommy Walz

Windham County

Rep. Mollie S. Burke

Rep. Valerie A. Stuart

Windsor County

Rep. John L. Bartholomew

Rep. Kevin Christie

Rep. Alison Clarkson

Rep. Sandy Haas

Rep. James Masland

Rep. Teo Zagar

 

 

 

 

 

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by Frank Mazur

An attack on our nation’s electrical grid is a national security threat nobody is talking about yet it could change the course of civilization.  It can stop our water supply, incapacitate computers, stall transportation and shut down banking.  No electricity means a virtual standstill.  No presidential candidate or elected officials is talking about it.

Iran and North Korea are developing and testing inter-continental missiles that can carry nuclear warheads launched from ships/submarines.  These missiles could explode nuclear payloads above our continent and damage/destroy all electronic equipment in our country.

Various commissions and experts have alerted Congress and the President of our vulnerability and urged them to take action to protect our electric grid.  The technology to lessen the effects of this attack is known but steps to protect our grid or provide warning measures to defend our homeland aren’t being implemented.

Russia and China have been responsive to this threat and have initiated steps to protect their electric infrastructure.  Maine, the first state to recognize this exposure, passed legislation asking for measures to mitigate the effects.  While Washington debates this issue and our President focuses on climate change and being PC compliant, our state legislature should follow Maine’s lead and secure our grid.  The cost of damage to an attack is trillions with a long recovery time while the prevention costs to mitigate would be far less.

We need to protect our way of life and our elected officials should be leading efforts to that end.  This isn’t a debatable issue anymore.

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by Rob RoperRob Roper

This week (January 24-30) is national School Choice Week, celebrating the great steps forward school choice has made in states around the country. Confronted with many of the same concerns Vermonters are facing about the high cost and quality of their schools, sates from Florida to Texas to Wisconsin to Nevada have expanded options and access to resources for parents to choose the best educational setting for their children.

Sadly, Vermont is heading in the other direction, throwing away a national leadership position we have held on school choice for a century and a half — by accident! At least that’s what our legislators are saying, and most seem to be sincere.

Act 46, the law passed just last year ostensibly to curb education costs (thereby reducing property taxes) and restructure the public school bureaucracy to create larger and more efficient districts, is in the words of one of its lead authors, “a mess.” Both halves of Act 46, cost containment and governance restructuring, have blown up. Neither aspect of the law is doing what it was supposed to do.

The cost containment side of the fiasco has garnered the most attention. The people who drafted the spending penalties school district face failed to consider factors like the rising cost of health insurance, and the mandate they themselves recently passed forcing school districts to pay for expensive universal pre-k programs. This has made it difficult to impossible for many school districts to conform to the new budget limitations, they would argue through no fault of their own.

Adding to the chaos, the Administration misinterpreted legislative intent as to how costs under the threshold formula were to be calculated, and provided school districts with incorrect data necessary to formulate their budgets.

On the governance front, Act 46’s major unintended consequence is the potential destruction of Vermont’s 150-year-old tradition of “tuitioning” – full school choice – for ninety plus towns that don’t operate a public school. Since passage of Act 46, two such towns, Westford and Elmore, have lost school choice because a majority of their voters felt they had no other practical options under the law but to give it up. Many other choice towns find themselves in similar binds facing similar votes.

This was not the intent of the legislature. To hear the people who wrote and passed the law tell it, towns like Westford and Elmore were supposed to be able to merge with other districts yet still retain their choice. During a discussion in the Senate Education Committee, for example, Sen. Philip Baruth (D-Chittenden), the Majority Leader in the Senate, said, “Last year, as I remember it, everybody left the building thinking that these mergers would not change anybody’s choice situation. And that it would be like it is now. We’d have towns side by side, one that could tuition and one that cant.”

Sen. Anne Cummings (D-Washington), Chair of the Senate Education Committee, agreed with Baruth, as did every other senator in the room. The State Board of Education, however, chose to interpret the law differently, much as the Administration misinterpreted how to calculate the spending caps. This unleashed bitter and divisive battles between communities forced to the table by a deeply flawed law to discuss merging school districts of very different structures and cultures.

So the legislature is scrambling, but only to solve half of the Act 46problem.

The Senate has voted to repeal the spending caps entirely, and the House is currently trying to find a way to raise the penalty threshold, but not eliminate it entirely. Either solution throws the cost containment aspect of the law, and expectations for lower property taxes, out the window. For school choice, there appears to be little urgency for a fix.

Bills have been presented in the House and Senate that would protect and preserve Vermont’s school choice where it exists. To its credit, the Senate Education Committee has at least begun a conversation about the issue. Unfortunately, the House Education Committee Chair, Dave Sharpe (D-Bristol), has flat out refused to discuss, let alone fix, the school choice issue. He likely has the support of Speaker of the House, Shap Smith (D-Morristown).

School Choice Week would be a good time for Vermont’s remaining school choice towns to speak up, tell their stories, and demand the legislature fix Act 46 to do what they promised it would do when passed – protect and preserve school choice in Vermont – by either amending the law appropriately, or repealing the law entirely.

- Rob Roper is president of the Ethan Allen Institute. He lives in Stowe.

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by Rob Roper

As the legislature debated an adjustment to the FY2016 budget – upward by $90 million — Rep. Tom Burditt (R-West Rutland) shared an illuminating history of budget adjustment acts over the five years he has served in Montpelier. It is an alarming trend.

Citing numbers retrieved from the Joint Fiscal Office (JFO), Burditt listed adjustments (remember these increases are ON TOP OF the increases in the budgets originally passed) of $5,000,000… $23, 400,000… $7,788,000… $41,206,000… $13,787,00… $88,000,000.

“Here we go again discussing another adjusted budget that is out of control,” Burditt said. “When does it stop? I’m going to vote no today for the same reason I voted no the first time. My constituents six years ago told me they had enough. And now they’ve got even less [in their wallets] than what they’ve had.”

Looking at the overall trend line of budget adjustments, Burditt noted that we will be looking at another $30 million shortfall next year. “These budget adjustments … have taken approximately 180 million out of the taxpayers pockets just since I’ve been here.”

Burditt concluded with one more observation. “Mr, Speaker, even though balanced budgets are touted around here, this year is the first time since I’ve been elected that it is not balanced, because $10 million from the “53rd Week” [last year had a quirky 53rd week, which was not accounted for in the annual budget] has not been paid for, kicked down the road until next year. I believe we are now officially running a deficit in Vermont.”

- Rob Roper is president of the Ethan Allen Institute

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by Rob Roper

What’s wrong with Vermont? Global Foundries, the semiconductor company owned by the Emirate of Abu Dhabi that took over the IBM plant in Essex, gets a $1,000,000 check from the state through the newly established “Enterprise Fund.” This, on top of the $1.5 billion IBM gave the company to take over the facility.

Meanwhile, Vermont’s smallest and most vulnerable businesses are going to be hit with yet another Montpelier-imposed burden – mandatory paid sick leave. This is, in effect, a $14 million tax on employers who almost by definition can’t afford it.

Most businesses offer their employees some ability to take time off for illness or other family obligations without docking them pay. This is a good policy for attracting and keeping quality employees. Those that don’t overwhelmingly can’t. They don’t have to money, and are operating payroll to payroll.

In addition, the governor is proposing a new $17 million tax in independent doctors and dentists. Again, these are small businesses.

Let’s not forget the recent mandates for higher minimum wages.

It’s fine for Vermont to have an Enterprise Fund. There is value in being able to encourage employers to set up shop or to expand in special circumstances. But, where’s the support for small and mid-sized businesses in this state. Seems all they get from Montpelier is kick after kick in the teeth.

Vermont would be better off to abandon policies of government picking winners and losers and establishing a generally attractive economic climate for all businesses.

- Rob Roper is president of the Ethan Allen Institute

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by John McClaughry

This week is National School Choice Week, and here in Vermont the pending question is whether our long tradition of parental choice in tuitioning towns can survive the state pressure for consolidation of public schools into unified megadistricts.

The State Board of Education has opined that a consolidated district must be either all choice or no choice. I don’t know where they came by this opinion because it’s not anywhere in the law, but it may have come from the staff lawyer who drafted Act 46 and is now overseeing consolidations, who happens to be married to an official of the teachers union..

Two bills have been introduced to preserve school choice, one by Senator Rich Westman and the other by Representative Heidi Scheuermann. At a hearing, Westman said, “When I voted for what became Act 46 this past year, I did not realize that in the case of an Elmore that they would be giving up school choice.” Senate Education Committee Chairwoman, Anne Cummings, piped in, “Neither did we!” She reiterated later, “I don’t think any of us here wanted to do that. The discussion last year was that if you have choice, we’re not taking the choice away from you.”

So there is some bipartisan concern for protecting parental choice in towns that merge into unified districts. You can help that along by letting your legislators know that you want to see school choice protected and growing.

- John McClaughry is the founder and vice president of the Ethan Allen Institute

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by Robert Rich

If you were one of the many thousands of Vermonters who were understandably hesitant to allow undocumented, unvetted refugees into Vermont after the ISIS terrorism in Paris and San Bernardino, and the mass rapes by refugees in Germany, Governor Shumlin had a name for you in his state of the state address.  It was “un-American.”

Further insulting by inference Vermonters who might have a different view than he, Mr. Shumlin went on to say “Vermonters have a long and proud tradition of rejecting racism, bigotry, bullying, intolerance, and fear.”  Mr. Shumlin would have us believe that reluctance with his undocumented refugee program is tantamount to being an intolerant racist bigot, rather than having a rational concern for the safety of your family and community.

In this new era of incivility by certain political figures, this is called shaming people into compliance.  After all, who wants to be labeled a racist bigot by his own governor?  Someone should tell Mr. Shumlin that Vermont has a long and proud tradition of our governors treating all Vermonters with dignity and respect.  Someone should also tell him that name-calling is classic bullying.

In his haste to place the immigration agenda of the Obama administration above the rational safety concerns of ordinary Vermonters, Mr. Shumlin says he’s been assured by officials at the White House and State Department that all refugees are properly vetted.  Of course, taking this position requires ignoring FBI director James Comey’s November 19, 2015 statement that vetting every refugee is “impossible.”

Recently we have witnessed the brutal mass murders of innocent people at the hands of immigrant terrorists and the mass raping of women at the hands of refugees.  So even as we desire to extend our hand to those in need, it is rational and normal for people to be concerned with their own safety when considering a massive influx of people of unknown background into their communities.  Moreover, it is a fact ISIS has claimed it is planting terrorists among refugees.

Vermont’s state motto is “Freedom and Unity.”  Unfortunately our current governor seems not to understand that freedom includes expressing our opinions and concerns without fear of reprisal, and that unity is not promoted by insulting Vermonters for having opinions and concerns different from his own.

Hopefully Vermonters will not concede their Freedom and Unity to a governor who exhibits the behaviors he claims to oppose.  Wanting to provide safety to refugees but be safe ourselves while doing so is not intolerant, but the Governor’s expecting Vermonters to disregard their own safety for his agenda certainly is.

- Robert Rich lives in South Burlington

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