Gov.-elect Shumlin talks with advocates for the homeless

Editor’s note: “Inside the Golden Bubble” is an occasional news analysis column on politics and public policy.

The opening day of the 2011 legislative session marked the end of divided government for the next two years, and a new period of Democratic dominance. With the changing of the guard on the Fifth Floor, Democrats will hold the governor’s office for the first time since 2002. The last time the party also held the Senate and the House was 2000.

There is no question that the Dems wanted gubernatorial power badly. And now that they have it, the question is, will they succumb to pent-up demand from advocates for significant changes in policy and funding for services? If the first day of the legislative session is any indication, the answer is yes — to a degree.

Whatever pressures Democrats feel from activists and lobbyists of various left-leaning causes, however, the vise grip of the $150 million budget gap will temper lawmakers’ desire to float new proposals that don’t save money or aren’t at least revenue neutral.

Gov.-elect Peter Shumlin and his righthand man, former state treasurer Jeb Spaulding, and the secretary designee of the Agency of Administration, have warned the budget proposal they will introduce to lawmakers on Jan. 25 will be austere. Shumlin has pledged not to use money from the budget stabilization fund (a.k.a. rainy day fund). He has also said he will not raise taxes. That leaves only several alternatives, such as cutting services and wringing more efficiencies out of state government. Spaulding said in an interview that the administration is looking at a menu of unpleasant options, including increasing copays and premiums for the Catamount Health program, which provides government-subsidized insurance to Vermonters.

Hours before Gov. Jim Douglas gave his fond farewell to lawmakers and members of his staff and administration, there was a palpable psychological shift in the house of hopes and dreams.

On Wednesday, the new leadership made promises with an immediacy that wouldn’t have been possible a year ago when the Republican governor and his administration were at the ready to quash Democrats’ health care reform initiative and unmitigated support for human service programs at the low point of the recession.

House Speaker Shap Smith addresses lawmakers

Last year for example, Douglas eventually agreed to shift $400,000 from the weatherization program to homeless shelters as part of the Budget Adjustment Act, but the last minute-deal was touch and go. He opted not to sign Act 128 into law, the health care initiative that will culminate in a report from Harvard economist Dr. William Hsiao on three options for reform.

Yesterday, when single payer health care activists and advocates for the homeless pressed lawmakers and the governor to pledge support for their causes, little arm-twisting was necessary.

At a rally of several dozen people on the Statehouse steps, Gov.-elect Peter Shumlin and House Speaker Shap Smith promised to give homeless shelters $500,000 as part of the Budget Adjustment Act before the end of January.

A half-hour later, Smith and three other members of the General Assembly pledged to support health care reform, though it wasn’t clear whether single payer will be the alternative they consider exclusively. Shumlin has made the adoption of some form of single payer a top priority, and has created a “dream team” of health care policy experts to shepherd a plan through a myriad of federal and state legal hoops. (Neither he nor members of his health care team spoke to the activists in the Cedar Creek Room. It isn’t clear yet whether the new governor would endorse a “pure” single payer system, in which the government would administer payments to doctors and hospitals or a unified payment system, like Germany’s, in which the government sets prices for health care services and multiple insurers administer the payments.)

The dual message of new opportunity and fiscal restraint appears to be the main theme of the new administration and the 2011 session. Expect lawmakers and the governor to look for twofers – programs that achieve their twin goals of making state government more service-oriented and more cost effective, a la Challenges for Change.

Smith, for example, announced a new initiative to upgrade the energy efficiency of 20 percent of the state’s building stock, in his address on Wednesday. He declared that the proposal would save money and help the environment.

The House gives Rep. Michael Obuchowski a standing ovation for his 38 years of service

It’s the kind of commonsense, modest proposal another elected official – of a different political stripe — might have endorsed, though with a different twist.

Smith ended his speech with this injunction to House members: “When wading through the tough choices we will undoubtedly face, I ask that you keep in mind what gives Vermont its character. Our independent nature; our commitment to a beautiful working landscape and pristine environment; our strong educational values; our dedication to healthcare for all; and the collaborative work ethic of its citizens. Keeping in mind these values, we can achieve great things, strengthen our communities, and insure our economic vitality.”

Gov. Jim Douglas, in his farewell address later that afternoon, rattled off a host of large and small accomplishments over the course of his eight years that fell within the parameters of a similar rubric, though with an emphasis on enjoining Vermonters who are having a tough time to find a way to pull up their bootstraps.

“Our ability to prosper is also a function of our fiscal management,” Douglas said. “We spent within our means, replenished and protected our stabilization reserves, and improved the effectiveness and efficiency of government. Even as the Great Recession squeezed revenues, we protected the most vulnerable and reformed programs to help those who have fallen on hard times realize a path back to self-sufficiency and independence.”

Though the Dems are setting the agenda in the executive and legislative branches, Smith warns that it won’t be all love, peace and harmony. He’ll be vetting Shumlin’s budget proposals, and he expects there will be disagreements.

“People should remember the Legislature is not going to do just what Peter (wants),” Smith said in an interview. “Peter and I have always had a good relationship, but where we have disagreed we moved along our own way. … I want to work with Peter; I agree with many of the things he does, but where we think there’s a direction we should go in, we will move forward in saying that. I think Peter understands that, too. It’s also about how we go about it. I don’t want to go to a place where we have dueling press conferences, but where we disagree with him we will let him know.”

Video footage of Smith’s speech follows. Due to technical problems, Douglas’ speech won’t be available until later today.

CORRECTION: Gov. Douglas wasn’t only reluctant to sign Act 128 — he refused to sign it.

VTDigger

Jon Margolis

Jon Margolis, who is well known for his insightful writing about state politics, will be a regular contributor to VTDigger.org during the upcoming legislative session.

Margolis, former “grand pooh-bah” of Vermont Newsguy.com, published his last blog post at the end of November after a 24-month run in the blogosphere.

It didn’t take long for the Barton-based journalist to find new outlets for his work: In addition to writing weekly columns for VTDigger.org, Margolis will be working on special projects for Vermont Public Television this spring.

Margolis was the national political correspondent for the Chicago Tribune. Before he was hired by the Tribune in 1973, he was the Albany bureau chief for Newsday, and a reporter for the Bergen Record in Hackensack, N.J., the Miami Herald, and the Concord (N.H.) Monitor.

He has written articles for the New York Times Magazine, American Prospect, The New Republic, Mother Jones, High Country News, and Seven Days.

In addition, Margolis has written three books: “The Last Innocent Year: America in 1964,” published by William Morrow in 1999 (paperback published by HarperCollins Perennial in 2000); “How To Fool Fish With Feathers: An Incompleat Guide to Fly Fishing,” illustrated by Jeff MacNelly (Simon and Schuster, 1991); and “The Quotable Bob Dole–Witty, Wise and Otherwise, “(Avon Books, 1995). He also wrote two chapters of “Howard Dean: A Citizen’s Guide to the Man Who Would be President “(Steerforth, 2003).

He lives in Barton.

VTDigger

We just finished a brutal campaign season. Op-eds are popping up and “Where do we go from here?” is one catchy title. I feel the need to address that question.

My father often reminds me…. “It’s not what you say, it’s what they hear”, so I’m hoping you hear what I say in the spirit intended.

In 2010, the President’s Commission on Fiscal Responsibility and Reform report was issued. Commission co-chair Erskine Bowles said: “We have started an adult conversation that will dominate the debate until the elected leadership in Washington does something real.” So the question “where do we go from here?” remains fertile. Ruth Marcus of the Washington Post writes, “This means telling both sides what they don’t want to hear. Conservatives must accept..(x). Liberals must accept..(y)..” Sounds simple enough. Are Conservatives and Liberals showing signs of communication? Who is communicating with the real people between Main St. , School St. and State St. ?

Reform is going to require new players; people not usually involved in formal civic activities. Ms. Marcus fell prey to the same inclination many big brains do; they speak of the problem as if it lay on a table or under a glass case. Paralysis through analysis and no action. Politicians and “experts” need to push the “stop and listen” button.. Einstein reminds us to “find the opportunity in the problem” and that will call for a different strategy.

As Auditor of Accounts, I warn of dangers, and the loss of “listening” is a real danger. I have testified on sensitive subjects like Sarcoidosis at the Bennington state office building when the legislature almost paid for that illness out of Workers Comp. I warned during the Act 62 Pre K discussion that resources for education are not infinite and may require rethinking how we deal with grades 11 and 12 to pay for age 3 and 4 educations.

People are starving for the truth, bold ideas and direction. Let’s give them some. We are talking about problems we can fix. A year and a half ago I took ample criticism for speaking up on a sensitive unemployment issue. Leaders were afraid to discuss curbing benefits to protect the fund or warn citizens that unemployment benefits may run out before their old jobs reappeared. I was vilified in my attempt to call out that urgent self-preparation and adjustment is required because some of those jobs are not coming back. Now, leaders are still silent while those unemployed Vermonters start falling off unemployment support.

It is very expensive when leaders focus only on votes, or promises to mitigate pain, or increase access or resources, while remaining afraid of looking the public in the eye and giving them the harsh truth. This country has a well-documented history of overcoming adversity, the ability of standing up straight immediately after getting knocked down. One of my favorite quotes is “People do not lack strength, they lack will”; it is up to us to demonstrate that we have the will to address our problems. Any government that provides benefits (education, health, employment, etc) without clear expectations from its citizens, in return, is committing a disservice.

One of the promises I heard on the campaign trail was a “Single-Payer System in Vermont .” I didn’t hear much about the fact that 70% of our healthcare costs are attributable to preventable causes. Not only are more than one-fourth the number of potential military recruits too fat to join the military, but now a report released December 21 says nearly one in four of the students who try to join the U.S. Army fail its entrance exam. Many have found it easier to blame teachers and schools for such academic results or McDonald’s and soda for childhood obesity. A commitment to reality is long overdue and we must make personal responsibility germane to both of these discussions.

I could dazzle you with financial facts that are all big and all bad. I could stress the challenges of demographics, unfunded liabilities and our inability to create private sector jobs in Vermont since 1997. We’ve been there, done that. After you read this, you may crinkle it up to start your woodstove, or you may ask, how do we engage the general population to address the problems we face? How do we get the discussion started on issues of citizen participation in government and parent participation in our schools as a first step toward addressing the question “where do we go from here?”

We need participation, and the time of good intentions and “hoping for volunteers” is over. It’s time to get in the game, or watch our country, as we’ve known it, vanish.

VTDigger

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Beth Pearce, the new state treasurer

Gov.-elect Peter Shumlin named the appointment today at a press conference in the treasurer’s office on the fourth floor of the Pavilion Building in Montpelier.

Shumlin said there were many applicants for the position including “some with a more political background” but he decided to choose Pearce because she is “the most qualified treasurer Vermont has ever brought to the job.”

“No one has trained more carefully, no one understands state finances better and no one else can step into the job without missing a beat,” Shumlin said.

Shumlin said it was also important to him to bring a woman into a statewide office “to balance out the imbalance” of state officeholders who are, at this juncture, predominantly men.

Pearce has been a deputy in the Vermont treasurer’s office since 2003. She has been responsible for unclaimed property, debt and capital financing, and management of the state employee, municipal worker and teacher retirement funds.

She has more than 30 years of experience in government finance. Before she moved to Vermont, Pearce worked as the deputy treasurer for Cash Management at the Massachusetts State Treasurer’s Office from 1999-2003.

A complete story will follow this evening.

VTDigger

Gov. Jim Douglas, Nov. 4, 2010

The big good-bye

Gov. Jim Douglas will hold his last press conference on Wednesday, Dec. 22 at his Fifth Floor offices. His final farewell will be his address in the well of the House on Jan. 5.
Douglas has been widely lauded for his graciousness at the end of his eight-year run as governor. Members of the transition team and the incoming Shumlin administration have repeatedly said that the governor and his staff have “bent over backwards” to help them hit the ground running in January.

As political pundit Eric Davis put it: “(Douglas) certainly took seriously the idea of maintaining the integrity and prestige of the governor’s office. Peter Shumlin was not his choice in November. My sense is, Douglas is working cooperatively with Shumlin. The message Douglas is conveying at this time in state government is we are responsible to the will of voters and to the integrity of the positions we hold to pass on (those roles) as smoothly as we can.”

Douglas’ legacy will live on in the form of key policies he forged with the Legislature, including state school financing changes under Act 68, Catamount Health, the Blueprint for Health and the Clean and Clear Initiative. His last two years in office were marked by the recession and growing discord with the Democratic majority in the Statehouse. In 2009, the General Assembly overrode two of his vetoes, over the budget bill and gay marriage legislation. It was the first time in the state’s history that more than one gubernatorial veto had been overruled by the General Assembly in one session.

Thanks to painter Kate Gridley, Douglas will be looking over the shoulder of every lawmaker, lobbyist, advocate and journalist who walks past his very life-like portrait in the hallway just outside the governor’s ceremonial office in the Statehouse. (Don’t be surprised if his eyes swivel now and again.)

The history of Douglas’ tenure will also live on in the form of documents tucked away in the state archives. Douglas’ administration is working closely with Susanne Young, the governor’s legal counsel, to make sure that his papers are properly collected under public records law. The paper shuffle is on between now and Jan. 7, when boxes of documents will be put in long-term storage.

The big challenge? Making sure there aren’t duplicate copies kicking around, according to David Coriell, the governor’s spokesman.

“Part of it is going through and making sure we know where the main copy is on file,” Coriell said. “Those documents are part of the record, and they’re important to the history of the governor’s tenure.”

Transition near the finish line

Though Gov.-elect Shumlin announced last week that he won’t be holding any more press conferences to name the remaining members of his administration, there are a number of positions still vacant.
In all, the governor-elect and his transition team had a total of 60 exempt positions to fill, including deputy secretaries.

At this juncture, Shumlin has appointed all six Cabinet secretaries and 10 commissioners. Eight commissioners have yet to be identified.

Shumlin announces the appointment of Deb Markowitz as secretary of the Agency of Natural Resources

Here’s the running list of departments looking for leaders: Forests, Parks and Recreation; Fish and Wildlife; Mental Health; Corrections; Disabilities, Aging and Independent Living; Information and Innovation; Libraries; Buildings and General Services.

As is standard procedure, all members of the Douglas administration were asked to submit their resignations and to inform the transition team if they had a desire to serve under Shumlin.

In addition, there are a number of other “exempt” employees who serve at the whim of the administration, and among them are department lawyers.

Alex MacLean, Shumlin’s spokeswoman, said the transition team and the governor-elect left it up to the commissioners to decide whether they want to ask lawyers to tender their resignations. So far, two commissioners have gone this route: Steve Kimbell, the incoming commissioner of the Department of BISHCA, and Keith Flynn, who was named commissioner of the Department of Public Safety. In all, 11 attorneys from the two departments could find themselves looking for new employment.

Comings and goings

A lot of other people are leaving state government, too, and a handful have landed in local businesses and nonprofits, but the majority of Douglas’ staff and department and agency leaders are in resume-polishing mode at the moment.

Here is where members of the Douglas team have landed so far:

Bruce Hyde, commissioner of Tourism and Marketing, is going back to his business, The Hyde Away Inn;

Mike Bertrand, commissioner of the Banking, Insurance, Securities and Health Care Administration, will dust off his law degree and set up a practice and public relations firm in downtown Montpelier;

David Tucker, commissioner of the Department of Information and Innovation, has been named executive director of the Vermont E9-1-1 Board, which oversees the state’s emergency communications system;

Steve Dale, commissioner of the Department of Children and Families, moves on to become the executive director of the Vermont School Boards Association come January (John Nelson, the current ED, is retiring);

Tom Evslin, chief technology officer and federal stimulus czar for the Douglas administration, retired (again) in the fall;

Roger Allbee, secretary of the Agency of Agriculture, is also retiring. Allbee plans to write a history of Vermont agriculture.

Heidi Tringe, deputy chief of staff, took a job with the lobbying firm of MacLean, Meehan and Rice last summer.

And then there’s the carryover:

Patricia Moulton Powden, former commissioner of the Department of Labor, will be the deputy secretary of the Agency of Commerce and Community Development;

Jim Reardon, commissioner of the Department of Finance and Management, has been asked to stay.

Patrick Flood will continue on as deputy secretary for the Agency of Human Services;

Rob Ide has been reinstated as commissioner of the Department of Motor Vehicles;

Susan Besio will remain commissioner of the Department of Vermont Health Access, which administers the state’s Medicaid-subsidized programs under the global commitment waiver: Catamount Health, Dr. Dynasaur and the Vermont Health Access Plan.

The executive code

Gov.-elect Peter Shumlin has borrowed a page from Gov. Jim Douglas: He will issue his own executive code of ethics once he takes office.

Democratic Gov. Howard Dean started the tradition; Republican Douglas also promulgated a code of ethics for his appointees to sign (in September of 2003).

All members of Team Shumlin will be required to sign the ethics agreement before they take office.

“The governor-elect is committed to transparent, fair and open government,” Alex MacLean, Shumlin’s spokeswoman, said. “All of his appointees will follow that direction.”

Douglas’ code, which MacLean sent as a sample, includes standard guidelines regarding the appearance of a conflict of interest. Appointees may not, for example, give “preferential treatment to any private interest on the basis of unfair considerations”; use “public office for the advancement of personal interest” or to “secure special privileges or exemptions.”

Why is all this necessary? After all, Vermont’s Legislature and state government operations are squeaky clean. Just take a look over the border at Massachusetts, for example, where in 2009, the speaker of the House and three associates were indicted on corruption charges. Vermont, with its low-paid, virtually perk-free citizen legislature doesn’t have those kinds of ethical problems.

Steve Kimbell, left, will be the new commissioner of BISHCA

That said, the Green Mountain State has does have a revolving door issue and the appearance of a conflict of interest comes up from time to time. Lobbyists, journalists and advocates often become part of the bureaucracy, and questions sometimes arise about perceived conflict of interest, especially given Vermont’s small size.

Shumlin has hired three respected officials with a background in lobbying: lawyer Steve Kimbell, who recently retired from Kimbell Sherman Ellis, the prominent public affairs firm he co-founded; Jennifer Hollar, who has been a lobbyist for Downs Rachlin Martin and who has deep experience with housing issues, will be deputy commissioner of the Agency of Commerce and Community Development; and David Yacovone who will serve as commissioner of the Department of Children and Families, is currently lobbying for the Vermont Association of Hospitals and Health Systems.

“The governor-elect’s main priority in appointing people is finding experts in various areas of interest,” MacLean said. “It’s not surprising that there’s going to be some kind of connection.”

According to information from the secretary of state’s Web site, Kimbell represented 33 different businesses and organizations in 2010, including a handful of medical industry interests: Rutland Regional Medical Center, Express Scripts, Inc., IMS Health Inc., America’s Health Insurance Plans and Blue Cross and Blue Shield of Vermont.

Hollar represented Vermont Yankee, FairPoint Communications, Inc., TransCanada, American Insurance Assn., IBM Corp. and the Vermont Chamber of Commerce, among 24 entities in all, according to the secretary of state’s Web site.

On the other side of the street, Heidi Tringe, deputy chief of staff under Douglas, recently took a job as a lobbyist for MacLean, Meehan and Rice, a major firm that also represents a wide range of interests at the Statehouse. Tringe works for the Beverage Association of Vermont, DISH Network, Satellite Broadcasting and Communications, RAI Services Co. (Reynolds America) and Pomerleau Real Estate.

Eric Davis, a retired Middlebury College political science professor, said a distinction should be made between lobbyists who represent a singular interest and people like Kimbell and Hollar who represented a large number of clients before the Legislature.

“I think the more serious question is not people coming in, but people going out,” Davis said.

Last week, reporters questioned Shumlin about one of his picks – lawyer Steve Kimbell as commissioner of the Department of Banking, Insurance, Securities and Health Care Administration – and his connections to the health care industry. Kimbell, who recently retired from the public affairs firm he co-founded, has represented a local hospital, a pharmaceutical company and several health insurers. (Kimbell is highly regarded — several hundred notables of all political stripes turned out for his retirement party in June.)

Kimbell told reporters at a recent press conference that he doesn’t have to build an extensive firewall within BISHCA because “the nature of my business was to work on discrete (legislative) issues.”

“BISHCA’s got enough infrastructure that if I have to step out of a matter, there will be somebody there to handle it,” Kimbell said. “I’ll be as transparent as I can be.”

In an interview, Kimbell said there aren’t many instances in which there will be conflicts regarding specific regulatory matters, because he didn’t represent BlueCross BlueShield, for example, directly before BISHCA as a lawyer.

“If it’s a broader question about how can you be a strategic adviser for any of those organizations one year and turn around the next year and regulate them — that’s what professionals do,” Kimbell said. “We don’t have career civil servants all the way to the top. In our form of democracy, there is a layer of bureaucracy that turns over when the governor turns over.

“It’s the way our system works,” Kimbell said. “I need to avoid conflicts on specific regulatory matters, but I don’t think there are many of those. I know the people, and I think that will help me do my job. If people have that concern, they need to press me to be transparent.”

MacLean said Kimbell’s connections provide him with an important advantage, given the difficult nature of the governor-elect’s single-payer health care system agenda. “It’s not an easy lift,” MacLean said. “Who better to move it forward than someone who has a good relationship (with people in the industry)?”

Is single payer doable?

Dr. William Hsiao was in town last week to give the Vermont Health Care Commission an update on his design of three different health care reform plans. His recommendations for a single payer, a public option (a multi-payer plan with the government acting as one of the health care insurers) and lastly, an optional, or “viable and practical,” solution, will come out in mid-January. After a public comment and response period, lawmakers will consider the information and decide whether to present legislation.

Hsiao said full implementation of a health care reform plan could take as long as 12 years. He also hinted that a “pure” single-payer plan that would provide universal access to health care for all Vermonters and give patients comprehensive coverage – ambulatory, hospital, preventive and nursing home care – could be expensive.

“When you look at your dreams and you want your dreams to come true, in that process the rubber meets the road,” Hsiao said. “I’m confident our report won’t please everyone. I hope it will please most people.”

Hsiao took pains, in his presentation to the commission, to avoid offering details about the direction his work was taking. In an interview with Russell Mokhiber of Counterpunch, Hsiao was more candid.

Hsiao told Mokhiber the pure single-payer plan option set forth under Vermont law “ignored reality,” including “legal barriers,” such as the Employee Retirement Income Security Act of 1974, which allows employers to set up self-insured plans. The law bars states from passing legislation that is “related to” an employee benefits plan. Hsiao described ERISA as a major obstacle – no other state in the country has managed to get a waiver. In an interview last week, Shumlin acknowledged it would take an act of Congress for the state to sidestep the federal law.

“We met with Dr. Hsiao. What he said to us was, single payer was absolutely possible in Vermont,” MacLean said. “We found that encouraging. It’s not surprising it’s going to take time.

Dr. William Hsiao, right, and Steve Kappel, left, give an interim report to the Vermont Health Care Reform Commission. Photo by Terry J. Allen

“I think Dr. Hsiao made it clear that there are a few different forms of single payer,” MacLean said. “People understand single payer differently, and I think that the governor-elect’s goal has been quality universal coverage that contains costs and is affordable.”

Read the Stateline.org story about Vermont’s health care reform efforts.

Dr. Deb Richter, a physician from Montpelier who has long advocated for a single-payer system in Vermont, said the state would have to seek waivers for regulations under Medicare, Medicaid, ERISA, and the Affordable Care Act. She said, “It makes sense to construct the best system possible, then worry about those waivers later.”

In general, Richter said the plan generally is going in a “direction I like.” “It’s hard for me to have any kind of positive or negative reaction until I see the details,” Richter said.

“I have to wait and see what comes out,” Richter said. “He’s releasing three drafts. We (single-payer advocates) hope to heavily influence the drafts … we will demonstrate broad support for a publicly financed single-payer health care system.”

Richter said a uniform, universal public payment system with a private delivery mechanism is the best way to rein in costs and cover all Vermonters. She envisions a public agency managing the public financing. Insurance companies, in her view, are obsolete because they no longer serve their primary service, which was to protect people from bankruptcy and to ensure adequate financing for hospitals.

“They (insurance companies) evolved because people needed to protect their assets,” Richter said. “Now, even people who are insured go bankrupt.”

In the interview with Counterpunch, Hsiao said Vermont’s plan could be modeled after Germany’s system in which hundreds of small nonprofits provide insurance, but a single-payer system is used to reimburse providers.

Richter predicts that Hsiao will present a universal health insurance model that offers a uniform benefit system in which providers receive the same reimbursement for the same treatments, much like the “single spigot” German system.

She said a “multi-payer” approach like Germany’s would cost more money than a single-payer plan, but it would be a step in the right direction.

Hospitals now bill about twice as much as they expect to collect in order to break even, Richter said. That’s because of the cost to provide care for uninsured patients and for low reimbursement rates for Medicare and Medicaid patients.

In Germany, a colonscopy is reimbursed at the same rate regardless of who the insurer is. If Vermont adopted a similar approach, MVP and BlueCross Blue Shield would pay the same reimbursement fee for the same procedure for every hospital. There would be no discrepancies between providers or insurers — the payment would be guaranteed, Richter says.

“That reduces that unknown,” Richter said. “The good thing about a guaranteed payment is, you roughly know what patient (and revenue) flow is. It allows you to (offer the service) and not mine for patients. That’s sometimes what happens now. If you have an empty bed, you’re going to find a way to fill it. When you have a predictable income, that kind of behavior lessens.”

Under such a system, insurers would be highly regulated, Richter said. The entities would be told what the benefit packages would be, what they have to provide and how much they have to pay to providers, Ricther said, and procedures for denying care would no longer be an option for insurers.

In the Counterpunch interview, Hsiao was pressed on how the system would be paid for, and he alluded to income taxes as an option.

Richter said an income tax would be politically unpalatable. She said a 10 percent payroll tax on income earners would be more progressive, and would cost most families less than current premiums.

Bubbling up

Battle lines are being drawn on the sugar-sweetened beverage front.

Several weeks ago, an array of advocates from health care organizations, including the American Cancer Society and the Vermont Chapter of the American Academy of Pediatrics, made their pitch for placing a penny-per-ounce excise tax on sugary drinks, including teas and sports drinks. They said that a tax would deter Vermonters from consuming the non-nutritive beverages and lead to a lower rate of obesity, especially among children.

Since then, Attorney General William Sorrell, who began the SSB tax debate when he unveiled a study on the impact of the beverages on Vermonters’ health, has been back to the Statehouse, this time to persuade the Vermont Blue Ribbon Tax Commission to take up the cause. (They are more likely to propose a sales tax on all non-nutritive beverages, including diet sodas.)

Meanwhile, the anti-tax forces, which include grocers and the Beverage Association of Vermont, have begun to pick up momentum on the Internet. A Web site has been launched: Stop the Beverage Tax, and a Facebook page posted on the site has more than 3,000 fans.

Jim Harrison, president of Vermont Grocers Association, which represents 700 stores statewide, said the business groups will be organizing a petition drive over the next several weeks. (A petition that began surfacing at a few stores around the state got a good response – now Harrison says they want to make a more concerted effort.)

“Clearly, there’s a lot of anxiety about it and interest in the issue,” Harrison said. “A few stores overwhelmed by response from customers. Harrison said the convenience and grocery stores he represents are concerned that selectively taxing food, which isn’t subject to the sales tax now, sets a dangerous precedent.

In some cases, the excise tax represents a 20 percent increase on sugar sweetened beverages. “Do we send more customers out of state where those products are not taxed?” Harrison asked. “No other state has an excise tax.”

The 6 percent sales tax already has a dramatic impact on retail sales, Harrison said. Many questions remain unanswered, he said. “What will be the impact on food shopping? What does that mean in terms of stores, especially smaller stores that sell a lot of beverages?”

Harrison said he anticipates a “discussion come January” with the Legislature. “We appreciate the gov.-elect’s position on the issue,” Harrison said.

Shumlin has said he opposes an excise tax on sugar-sweetened beverages.

VTDigger

Shumlin, left, with Patricia Moulton Powden

Gov.-elect Peter Shumlin’s transition team has a number of key positions in state government left to fill, and rumors are running rampant about who is up for what.

Big Monday announcements have been the norm over the last four weeks, and Dec. 6 will likely be no different.

Another telltale pattern that has emerged is the Shumlin team’s masterful control of leaks to the press. So far, members of the media have been kept in the dark, right up until the last-minute pressers.

Who will be the head of Agency of Natural Resources, one of the state’s largest governmental organizations? Knowledgeable people in the environmental community have confirmed Green Mountain Daily’s assertion (made last Wednesday) — that Shumlin’s former rival Deb Markowitz is likely a strong candidate for the post, though one source held out the possibility that another contender could take the top slot. If the Secretary of State is tapped, she would be the third member of the team of rivals, which already includes Sens. Susan Bartlett and Doug Racine. The only member of the Democratic primary quintet who apparently isn’t bucking for a place on the team is Google exec Matt Dunne.

Sources in the know say David Mears, an associate professor at Vermont Law School, could be a likely candidate for deputy secretary or the commissioner of the Department of Environmental Conservation. Mears, according to the VLS Web site, “specializes in environmental law and environmental litigation.” His expertise spans across a gamut of legal issues with regard to pollution and water resources.

Other names have surfaced in the last few days. The veteran representative and former Speaker of the House Michael Obuchowski, D-Rockingham, could be a strong contender for State Treasurer, according to several insiders.

Shumlin has at least a dozen commissioners to name, plus one secretary. Not to mention two, possibly three, legislative appointments to make. Plus members of boards and commissions.

The governor-elect has said he wants departments and agencies to work together on his main objective — job creation. He drove this idea home at his first presser where he introduced the secretaries of the agencies of agriculture and commerce and community development along with the commissioner of the Department of Labor as a team. He made a point of talking about how those three arms of state government are interrelated, and he has pushed the idea of breaking down “silos” between agencies. That said, Shumlin hasn’t taken that interdisciplinary approach to the point of reorganizing or merging departments.

Download the Douglas administration’s2010 Organizational Chart.

Here is a listing of departments still in need of commissioners.

Under the Agency of Natural Resources, commissioners are being sought for the following departments: Environmental Conservation, Fish and Wildlife, and Forests, Parks and Recreation.

At the Agency of Commerce and Community Development, a commissioner is needed in the Department of Economic, Housing and Community Development.

Under the Agency of Human Services, the transition team needs to fill commissioner positions in the departments of Health, Mental Health, Corrections, Vermont Health Access and Aging and Independent Living.

Under the Agency of Administration, commissioners are needed in the departments of Human Resources, Information and Innovation, Taxes, Libraries, and Buildings and General Services.

Under the Agency of Transportation, the commissioner for the Department of Motor Vehicles slot will have to be filled.

The following standalone departments are also looking for leaders: the Department of Public Service; the Department of Public Safety and the Department of Banking, Insurance, Securities and Health Care Administration.

VTDigger

Power in the executive branch of Vermont state government radiates from the governor’s office on the fifth floor of the Pavilion. This week Governor-elect Peter Shumlin named some very good people to key fifth floor positions. They will replace Governor Jim Douglas’ excellent outgoing team, with whom I had the privilege to work over the last eighteen months.

Treasurer Jeb Spaulding is literally moving upstairs from his fourth floor office to become secretary of administration, essentially the chief operating officer of state government. All of the back office of the government is part of the agency of administration including finance and management, tax, information technology and human resources. The secretary is responsible for developing the proposed budget for the governor, negotiating the budget with the legislature and administering whatever compromise finally emerges at the end of the legislative session.

Neale Lunderville is outgoing secretary of administration; he is incredibly bright and hard working. The peaceful and constructive end of the last legislature, despite enormous fiscal pressures, owes much to Neale’s diligence and excellent working relationships with Speaker Shap Smith, House Ways and Means Chair Michael Obuchowski and former Senate Appropriations Chair Susan Bartlett.

Jeb Spaulding has the right background to take over budget responsibility. Jeb, along with Governor Douglas (also a former Treasurer), deserves credit for the state regaining and keeping its triple A bond rating; he has been a credible and persuasive voice talking to Wall Street about Vermont. Jeb is very familiar with the problem of under-funded state employee retirement accounts and helped negotiate higher contributions by teachers to their retirement plan. Before being elected Treasurer, Jeb served eight terms in the state Senate and is well-trusted by legislators; that trust’ll serve him well in budget negotiations.

Senator Susan Bartlett, who has served for longer than I can remember as Senate Appropriations Chair, will also be a huge help in putting together and selling a budget for the very tough year to come. Her common sense and willingness to go into all necessary detail – as well as her influence with her colleagues in both the House and Senate – made her extremely effective and a pleasure to work with in the Senate. There was no exact counterpart in the Douglas Administration to the very senior special assistant role that Susan’s been appointed to; my guess is the exact role is a work in progress but that she’ll be influential and very helpful. I’m personally pleased that she’ll be taking responsibility for the administration’s efforts on continued broadband rollout in the State. That responsibility needs to be with someone who is both dogged and close to the Governor.

Alexandra MacLean was very effective assisting Shumlin when he was Senate President Pro Tem. She wielded the sharp elbows of Shumlin’s gubernatorial campaign, but that was her job as campaign manager. Alex is the new secretary of civil and military affairs and will be responsible for communication.

When I was on the fifth floor, communications were handled first by the irrepressible Dennise Casey and then by the unflappable Dave Coriell. Both had a voice in making policy as well as announcing it. I remember Dennise reminding us that policy which can’t be explained probably isn’t very good policy. Sometimes we came up with better words; sometimes we changed the policy. I’m sure Alex will be similarly assertive; that’s a good thing.

I don’t know the new chief of staff, Bill Lofy. Tim Hayward has been Jim Douglas’ chief of staff for all eight years that Douglas has been governor; he had a similar role in the Snelling administration (in which I was secretary of transportation). Every governor uses his chief differently. In the Douglas Administration, Tim’s job has been to assure that staff and cabinet are effectively focused on the governor’s priorities for the state, that the governor’s time is used well, and to be a high level negotiator with other states and provinces. Tim has the rare gift of being able to assure that politics are used to achieve the goals of government rather than the other way around. We Vermonters owe Tim great thanks for his service.

I also don’t know Beth Robinson, who Shumlin designated as his legal counsel. Susanne Young is legal counsel for Jim Douglas and has one of the best legal minds in the state as well as excellent judgment. She can find her way through the Vermont Statutes better than most people can navigate their kitchen garden. Susanne read every word of every bill that came to the governor for his signature and coordinated input from the rest of staff and cabinet on legislation. She’s saved us all from both stealthy language and drafting errors. Susanne also serves as liaison from the fifth floor to the public safety community where she’s very respected. Tough act to follow.

Shumlin is quoted in the Burlington Free Press as saying “the job of the governor is to find the best people.” He’s right, and he’s off to a good start in that regard.

VTDigger

General Fund

Secretary of Administration Neale F. Lunderville released the October 2010 General Fund Revenues today. October is the fourth month of fiscal year (FY) 2011. General Fund revenues totaled $92.28 million for October 2010, and were +$1.27 million or +1.40% above the $91.01 million consensus revenue forecast for the month. Year-to-date General Fund performance of $373.93 million was +$13.71 million, or +3.81% ahead of year to date target of $360.22 million. As was the case last month, this +$13.71 million overage is almost fully attributable to one-time bank franchise receipts in August and likely one-time corporate income tax receipts in September.

The monthly targets reflect the revised Fiscal Year 2011 Consensus Revenue Forecast approved by the Emergency Board at their July 14, 2010 meeting. Statutorily, the State is required to revise the Consensus Revenue Forecast two times per year, in January and July; the Emergency Board may schedule interim revisions if deemed necessary. The next Emergency Board meeting will be scheduled for January 2011.

Personal Income Tax (PI) receipts are the largest single state revenue source, and are reported Net-of-Personal Income Tax refunds. Personal Income Tax receipts for October were recorded at $47.98 million, or -$0.01 million or -0.02% below the monthly target of $47.99 million.

Corporate Income Taxes for October, which are also reported net-of refunds, were recorded at $3.70 million against a target of $2.78 million, or +$0.93 million (+33.34%) above target.

The consumption taxes experienced mixed results for October; Sales & Use Tax receipts of $20.17 million exceeded the monthly target by +$0.12 million (+0.60%), while Rooms & Meals Tax receipts of $10.66 million fell below target by -$0.02 million (-0.21%).

The year to date results for the four major General Fund categories are as follows: Personal Income Tax, $181.65 million (-0.03%); Sales & Use Tax, $73.73 million (+0.75%); Meals & Rooms Tax, $44.74 million (-0.04%); and Corporate, $26.71 million (+55.78%). Secretary Lunderville noted that, “As was the case last month, approximately $7.2 million of the favorable year to date Corporate Income Tax results was associated with a very small number of corporate estimated payments. We remain concerned that these estimated payments may be overstated and that some portion will be refunded when corporate income tax returns are filed. Our economist views this above target result as a one-time event and not indicative of an economy improving more quickly than expected.”

The remaining tax components include Insurance, Inheritance & Estate Tax, Real Property Transfer Tax, and “Other” (which includes: Bank Franchise Tax, Telephone Tax, Liquor Tax, Beverage Tax, Fees, and Other Taxes). The results for the month of October were as follows: Insurance Tax, $021 million (-32.26%); Estate Tax, $1.05 million (-22.24%); Property Transfer Tax, $0.77 million (+3.32%); and “Other”, $7.74 million (+8.95%). Year to date results for these categories were: Insurance Tax, $8.49 million (+0.45%); Estate Tax, $3.72 million (-29.86%); Property Transfer Tax, $2.82 million (-11.42%); and “Other”, $32.06 million (+21.09%). The majority of the favorable year to date results in the “Other” category were due to unanticipated settlement activity in August in Bank Franchise Taxes.
Transportation Fund

Secretary Lunderville also reported on the results for the non-dedicated Transportation Fund Revenue for October. Total non-dedicated Transportation Fund receipts of $18.01 million for the month were slightly below target by -$0.46 million (-2.47%), against the monthly target of $18.46 million. The year to date non-dedicated Transportation revenue was $72.50 million versus the target of $72.94 million (-$0.43 million, -0.59%).

Individual Transportation Fund revenue receipts components for October were: Gasoline Tax, $5.55 million or +7.10% ahead of target; Diesel Tax, $1.25 million or -12.38% short of target; Motor Vehicle Purchase & Use Tax, $4.32 million or +1.30% above target;

Motor Vehicle Fees, $5.55 million or -8.16% behind target; and Other Fees, $1.34 million or -13.56% short of the monthly target. The October year to date Transportation Fund revenue results were: Gasoline Tax, $21.65 million or -1.29% short of target, Diesel Tax, $4.81 million or -1.49% below target; Motor Vehicle Purchase & Use Tax, $16.74 million or -2.16% below target; Motor Vehicle Fees, $23.61 million or +2.78% above target; and Other Fees, $5.69 million or -5.73% short of target.

Secretary Lunderville also reported on the results for the Transportation Infrastructure Bond Fund (“TIB”). TIB Fund Gas receipts for October were $1.57 million or +18.03% above target; year to date receipts of $5.76 million were -0.99% below target. TIB Fund Diesel receipts were $0.06 million or -62.05% below target for the month; year to date TIB Diesel receipts were $0.56 million or -4.23% behind target. TIB Fund receipts are noted below the following table: Transportation Fund By Major Element (In Millions)*

Education Fund

The “non-Property Tax” Education Fund revenues (which constitute approximately 11.9% of the total Education Fund sources) were released today by Secretary Lunderville. The non-Property Tax Education Fund receipts for October totaled $13.81 million, or -$0.06 million (-0.43%) short of the $13.87 million target for the month. Year to date Education Fund revenues were $51.10 million or -0.37% behind the year to date target of $51.29 million.

Conclusion

“The loss of momentum in the economic recovery continues to cause concern about the stability of the recovery,” said Secretary Lunderville.

“Compared to prior fiscal years, October year-to-date results for fiscal year 2011 have exceeded fiscal year 2010, but remain 2.9% below fiscal year 2009 and 2.3% below fiscal year 2008 for the same four-month period,” continued Lunderville. “The current forecast does not project a return to fiscal year 2008 revenue levels until fiscal year 2013.”

“The year-to-date General Fund results are 3.81% ahead of target. However, adjusting for the $12.1 million in one-time activity, the results through October would be 0.4% ahead of target,” Lunderville concluded. “While we are pleased that our current Consensus Forecast will hold until the January 2011 revision, we do not see the current results as an indication of the economic recovery surging ahead.”

VTDigger

Montpelier, VT – Lt.-Governor-Elect Phil Scott announced today that Nancy Driscoll has joined his office as Chief of Staff.

Driscoll served as communications manager on Scott’s campaign. She has 10 years of experience in marketing and public relations, and has run her own marketing agency for the last 3 years. Prior to moving to Vermont in 2001, she worked as a Legislative Correspondent in the Washington, DC office of U.S. Rep. Charles Bass of New Hampshire.

“I’m glad that Nancy will continue to be a part of my team as I make the transition from candidate to elected official,” said Phil Scott. “She has a solid understanding of what my goals are for this office, and she shares my style of ‘outside-the-box’ thinking. I think she’s a great fit.”

Driscoll said she was honored to have been given an opportunity to continue working with Phil Scott. “Having helped Phil promote his vision for Vermont and for the office of Lt. Governor over the last eight months, I’m now looking forward to helping him implement it,” she said. “I believe strongly in his ability to inspire business growth and facilitate more effective government, and I’m thrilled that he’s invited me to come and be a part of that work.”

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Nancy will now be the primary point of contact for Lt.-Governor-Elect Scott.

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