Outside of an extensive education overhaul, Gov. Phil Scott’s major policy proposals in his budget are keeping Vermont Health Connect and issuing a $35 million bond to fund affordable housing.
Additionally, his budget seeks to reduce administrative costs at the Agency of Human Services, including through job cuts. At the same time, he is planning to spend more on economic development.
“It is an understatement to say that Vermont Health Connect has not lived up to our expectations,” Scott said during his budget address Tuesday. “I have promised a solution to the exchange, and even with the uncertainty in Washington, we continue to evaluate better options for the future.”
His budget proposes to save $2.8 million in operational costs at Vermont Health Connect. The plan would, among other things, encourage commercial insurance customers who do not receive state help paying for their premiums to go directly to the insurance carrier.
Right now, just under 5,000 customers already go directly to Blue Cross Blue Shield of Vermont or MVP Health Care to sign up for insurance. An additional 7,000 customers could directly enroll but have not yet chosen that option, according to an independent review by Strategic Solutions Group.
Scott called the state an unnecessary “middleman between health insurance companies and those who do not qualify for subsidies,” which leads to a “frustrating and costly process.”
Al Gobeille, the secretary of the Agency of Human Services, said the state would not likely throw out the Vermont Health Connect system that determines program eligibility, but continue to evaluate how it can streamline billing, phone calls and other operational duties.
Additionally, Scott’s budget calls for adding $22 million to a contingency fund that would help the state weather federal funding changes that come from Congress and President Donald Trump.
An additional $3.5 million in projected savings would come from closing the Windsor prison, Vermont’s oldest and smallest prison. The Legislature considered closing it in 2015 but scrapped the proposal after learning that would result in moving 100 inmates to a private out-of-state prison.
In lieu of keeping prisoners there, Scott proposes to shift money into the state’s electronic monitoring and home detention program — which allows detainees to live at home — and increase the number of inmates in St. Johnsbury. The state is currently negotiating with St. Johnsbury over the future of a work camp there.
The budget would also cut $3.7 million in state and federal Medicaid money that hospitals receive to help them care for people without health insurance. Those payments have stayed level over the past several years, even as Vermont’s uninsured population has plummeted.
Scott proposes to reduce administrative costs in the Agency of Human Services by $1 million and find $1.1 million in vacancy savings — money saved by not replacing employees who leave their jobs. Gobeille said the $1 million is an agencywide goal that can likely be achieved because the agency has a roughly $2.5 billion budget and 3,800 workers.
Additionally, Scott would send $800,000 to an opiate addiction treatment hub in St. Albans. An additional $1.3 million would go to the criminal justice system and Department of Public Safety for a variety of programs. The defender general’s office would get $200,000; the Department of State’s Attorneys and Sheriffs would receive $120,000; and funding increases to guardians at litem, who work with children in child protection cases, would get an additional $528,000.
Economic development
The Agency of Commerce and Community Development would not see any cuts under Scott’s budget and could get several million dollars in additional money for programs.
Specifically, Scott seeks a $35 million bond to allow the Vermont Housing and Conservation Board to build new homes for low-income and middle-income residents.
Jen Hollar, the policy director for the board, said some of the housing would be for families earning up to $84,000, and other housing would serve low-income, homeless and potentially homeless Vermonters.
Hollar said it is too early to tell how many housing units could be built with the $35 million, but she said the board would seek federal funding and leverage the state money to raise private capital.
Additionally, Scott’s budget would put $750,000 toward marketing Vermont as a good place to do business, a concept that was first funded in 2015 with $200,000. The administration will seek an additional $750,000 in private money to market Vermont, leading to a $1.5 million effort.
Scott would increase funding for the Vermont Training Program, administered by the Vermont Economic Progress Council, by $200,000. The money would specifically go to training people in skilled trades careers.
The governor is also seeking to establish or extend three types of tax credits: an income tax research and development credit that does not exist at the state level; a sales tax exemption for airplane parts, which is scheduled to sunset this year; and tax credits for downtown and village centers, to encourage more businesses to open co-working spaces.
“What we’ve been asking for, for years, is to have increased funding and increased attention on economic development marketing,” said Betsy Bishop, the president of the Vermont Chamber of Commerce.
“The $750,000 that the governor put forward today is great because it will help us start to bring workforce and businesses to Vermont,” Bishop said. One of the chamber’s priorities was to get the state to appropriate $200,000 for the marketing.
Scott also used his budget address to lightly jab lawmakers who disagree with his proposal to merge the Department of Labor with the Agency of Commerce and Community Development.
“I understand this is not how we’ve always done things,” Scott said. “But, for the life of me, I cannot see how we can stand by the status quo, knowing the workforce challenges we face.”
“In this new agency, we will literally put those in state government who help Vermonters find jobs shoulder-to-shoulder with those helping businesses create jobs,” Scott said. “I urge you to consider this common-sense move to make state government more responsive to the people we serve.”
Energy, environment, transportation
“I believe we can reach our goal of 90 percent renewables” by 2050, Scott said, “but, for as long as I’m governor, we’ll make progress without destroying our ridgelines.”
To encourage more people to buy energy efficient products, he is proposing a sales tax holiday and a rebate program on hybrid and electric vehicles and other energy-efficient products.
To clean up Lake Champlain and other waterways, Scott is budgeting $20 million each year for two years from the capital and transportation budgets to help reach the $50 million in state money that State Treasurer Beth Pearce said could be spent over two years without raising taxes.
Any additional money for lake cleanup would come from the existing property transfer tax surcharge that raises about $5 million a year. The Legislature instituted the surcharge in 2015, and it expires June 30, 2018.
(VTDigger reporter Elizabeth Hewitt contributed to this story.)
