Education

Lawmakers leave teacher negotiations untouched, for now

education finance
Senate and House conference committee members shake hands after approving the education tax bill Thursday night with a new proposal to study a statewide teacher health care benefit. Photo by Tiffany Danitz Pache/VTDigger
After a long day of private conclaves between the governor, the House speaker and the Senate president, the smoke emitted from the golden dome was black, not white.

Lawmakers agreed on an education finance plan they said was the best they were going to get as negotiators from each chamber signed it after dark Thursday.

Both chambers adopted the legislation late Thursday night.

Education funding was the key issue that held up adjournment this year. The matter is at the heart of a disagreement over a proposal from Gov. Phil Scott to change how teachers’ health care benefits are negotiated.

He saw a chance to capture as much as $26 million in savings for the state. For a time, Democratic leaders sought to counter with proposals for similar savings while refusing to go along with him on the bargaining process.

In the end lawmakers abandoned the effort to lock in health care savings in the coming fiscal year, instead laying what they say is the groundwork to do that in the future.

“Given the circumstances that we are in, this is the best we are going to do,” Rep. Janet Ancel, D-Calais, told her Senate and House colleagues on the conference committee.

The plan will attempt to re-create the onetime situation the state is currently facing. Almost every teacher contract is being negotiated at the same time because their health care is moving to less-costly plans Jan. 1 as a result of the Affordable Care Act. The governor wanted to take that opportunity to move collective bargaining to the state level in hopes of capturing some of the savings, projected to be $75 million.

The governor wants to give $49 million of that back to teachers so their out-of-pocket costs won’t increase and put $26 million back into the education fund to lower property taxes and help pay for child care and the state colleges.

The plan lawmakers approved will end all teacher health care contracts on Sept. 1, 2019. At the same time, a commission will be set up to study a statewide teacher health care benefit. Contracts that have been settled before July 1 this year will not be subject to this plan.

The governor said this was not what he had hoped for, and lawmakers are now planning for a veto session on June 21 and 22. The new fiscal year starts July 1.

The governor’s spokesperson, Rebecca Kelley, said the plan doesn’t meet the administration’s goals. “The governor set clear principles to have a mechanism to have an opportunity to reach maximum savings for taxpayers,” she said.

The conclusion came after a new round of meetings on the governor’s proposal began Wednesday evening when House and Senate members were assigned to a conference committee on the education tax bill, H.509. But whatever work had been accomplished out of the public eye didn’t clear the bar Thursday morning.

All day, House Speaker Mitzi Johnson, D-South Hero, and Senate President Pro Tem Tim Ashe, D/P-Chittenden, walked in and out of the governor’s office. There were no press conferences, and no information released about what they were or were not considering.

The final proposal lawmakers crafted was attached to the education tax bill that sets key rates used to calculate local property taxes.

The bill represents a 1.5-cent property tax rate decrease for homeowners, Ancel said.

The language sets the so-called yield rate at $10,160 for those who pay based on their homestead’s value and $11,990 for those who qualify to pay based on income.

The nonresidential property tax rate will be $1.55 per $100 of assessed property value.

Those figures are higher than in the House and Senate versions of the yield bill that passed earlier. Higher yield rates correspond with lower local property tax rates.

Taxes are keyed to a statewide rate of $1. If a town spends $10,160 per pupil — the same as the yield rate the Legislature set — then the tax rate in that town will be $1 for every $100 of assessed property value. Any spending above the statewide yield rate is picked up by local taxpayers.

Average spending per pupil will be $15,380 in fiscal year 2018.

“We are giving real property tax relief to residential payers. We are doing a reset on this opportunity to look at these health care contracts in a different way,” said Ancel.

Sen. Ann Cummings, D-Washington, who was also on the conference committee, said the plan gives lawmakers the time they need to really consider this complicated issue. “It gives it the attention it deserves, but it moves us forward,” she said.
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  • Jim Manahan

    “Given the circumstances that we are in, this is the best we are going to do,” Rep. Janet Ancel, D-Calais
    That is wholly disingenuous considering anyone with a high school education knows that is not the best you could do.

    “It gives it the attention it deserves, but it moves us forward,”Sen. Ann Cummings, D-Washington
    Kicking the issue down the road is not giving it the attention the taxpayers deserve.

    • Tim Vincent

      People get the government they deserve (unfortunately).

      • Tyler Samler

        The attention the taxpayers deserve is corporate tax reform and full medicare-for-all. Not this shell game over a few pennies that teachers earn.
        I live, work, raise a family, and get ripped off by Insurance Companies and banks the same way everybody else does. The trillions of dollars that a few major corporations are sitting on were at one point our consumer dollars. If we had sharper systems – like medicare for all – we could keep our money local and not be subjected to hundreds of billions of dollars in fraud and profiteering which serves no real “health care” purpose. We could undercut the beating that these giant multinational corporations are imposing upon us from their skyscrapers in Tokyo, Chicago and New York – who have no allegiance to our communities and no loyalty to Vermont. The whole industry will close down, get out and go into some communist/fascist countries abroad where workers are forced to know their place at .80 cents /hour.
        I would like to think we value labor here. Phil Scott however, seems to be happily serving this industry and letting them siphon our money out of our hands.

        • Craig Powers

          Self insure if you dislike being “ripped off”. Keep your money under the mattress if you dislike banks. Sounds like you want all the benefits of protection from the difficult sides of life but also want others to pay for it. That is terribly selfish in my opinion. Services and goods cost money. People cost money. If you haven’t noticed…technology has changed the way we make goods and deliver services. It has also diminished the need for as many laborers/workers. This has driven wages downwards, as the supply of workers has increased due to gains in productivity. You blame corporations…you should be blaming the simple fact that technology has changed the world…and it is NOT going to stop changing.

          One great bit of advice I learned was to “specialize” in a technical field to make my skill set different than others. This advice has allowed me to make a decent middle class living. Try teaching that to your students, instead of having what appears to be a massive chip on your shoulder, about what others have that you do not have.

  • Bobby Taylor

    Scott holding a 5.2 billion dollar budget hostage over because he wants to bully Teachers and Support Staff into giving him control over their health care negotiations is childish and unwise.

    I have a feeling the general public would react differently to this if he did the same thing to Police and Fire Fighters, who have basically the same level of benefits.

    Besides, I thought Vermont was supposed to be making health care more accessible and affordable for all.. Not singling out groups of people for “special” treatment. Essentially asking people to pay more and get less. How is this the “Vermont” way?!

    • Gary Dickinson

      First point, the police and firefighter portion or their tax bill doesn’t continue to rise year after year.
      Second point, with the health plans available to teachers vs. the taxpayers, the teachers want to keep their free taxpayer funded platinum plan and the taxpayers are being forced to pay more and get less on their inferior health plan (that teachers overwhelmingly voted for and supported).

      • Bobby Taylor

        If anyone has looked at the plans being offered to Support Staff and Teachers going forward, they are nowhere near like the ones they had before. (vehi dot org) Nothing like the old plans is even being offered anymore. These new plans are actually way worse than the ones offered on the exchange in many ways.

        As for Police and Fire Fighter benefits, those costs are going up just as much as anyone else. The reason why their budgets are flatter is due to the totally different budget dynamics outside of benefit costs.

        The rising cost of public education in VT is coming from the pressure of lowering enrollment while at the same time the student population being served is coming with a lot more needs.

        Singling out education staff benefits for cost savings when it is not one of the main drivers of escalating costs does not really make sense. Unless you (Gov Scott) are really just looking for short term political points from conservatives that don’t have a full understanding of the bigger picture. Political opportunism really..

        A large portion of VT’s Teachers and Support Staff will be retiring over the next 5ish years. If we want to attract qualified staff to move here and replace them, over moving to a happening city life, we need some carrots like decent benefits.

        This money grab may look tempting now, but it will come back to bite many Vermonters in the future when they have a hard time finding highly qualified staff to educate their children.

        Systemic change is needed, but it needs to be thoughtful and focused on the long term. These wedge issues only serve to cause derision and prevent Vermonters from getting together and solving them with the wider community in mind.

    • J Scott Cameron

      Most municipal employees – including police and fire – obtain their health insurance from the Vermont Health Exchange. Every city and town with less than 100 employees is required to be on the Exchange. Municipalities and their employees obtaining health insurance from the Exchange commonly face the type of deductibles and co-payments that the teachers are moving towards. Making health insurance more accessible means making it more affordable. Consumers can either choose to pay higher premiums for plans with limited deductibles (i.e., guaranteed high health insurance costs) or they can select plans which have lower premiums (but which cover the same things) and be subject to the risk of higher out of pocket expenditures. There is no free lunch. You pay one way or the other.

    • Peter Chick

      FYI police and fire do not threaten to walk off the job as Vermont teachers are known to. Police and fire serve the public the NEA serves its self only.

  • Bob Bancroft

    I seriously doubt there will be many teacher health insurance contracts that will have to end on September 1, 2019. It sounds good, but I doubt there will be many unsettled contracts this coming July 1. Suggesting we will have a second chance to secure savings in two years sounds good, but exempting contracts settled before July 1, 2017 virtually insures the absence of a critical mass of contracts expiring in September 2019.

    • Adrienne Raymond

      We have seen no movement in our negotiations. We offered to continue negotiating prior to our scheduled mediation on June 13 – impasse was declared almost a month ago, and have nothing scheduled so far. The VTNEA is betting the Gov. loses out. I certainly hope they are wrong.

  • J Scott Cameron

    “The plan lawmakers approved will end all teacher health care contracts on Sept. 1, 2019. ”

    Now, I haven’t read the Bill yet, so I’m relying on the above quote. If accurate, it would indicate to me that, once again, the legislature does not have a clue as to what it is doing.

    Teacher collective bargaining agreements do not expire on September 1. They expire on June 30.

    Teacher “health care contracts” is an ambiguous term. However, if the legislature was attempting to describe the health insurance contracts for the new policies that go into effect on January 1, 2018 (which is also the date when all current policies will end), it should understand that these are annual policies which run the entire calendar year in order to be on cycle with federal tax laws relating to such tools as health savings accounts (HSA),health reimbursement arrangement (HRA), flexible spending accounts (FSA) and the like. The new plans all have higher deductibles and out of pocket maximum costs, and these tools are vital to both employers and employees as they allow employees (in this case, teachers and educational support staff) to pay out of pocket costs with pre-tax funds. The deductibles/co-payments/co-insurance for the new health care plans are also tabulated on a calendar year basis. This is not an issue with the current health insurance plans as they have extremely limited out of pocket exposure and few, if any school districts are currently using HSA, HRA or FSA. But all of them will be doing so by 1/1/18.

    Proposing to end the new teacher health plans on September 1, 2019 is like proposing to end the Indy 500 by placing a brick wall at the finish line.

    I hope that the quote above is a mistake,or that there is more to the plan than the September 1 end date. It is hard to believe that, after all the debate, the legislature could have been so ignorant of the facts and realities on the ground.

  • Moshe Braner

    “Any spending above the statewide yield rate is picked up by local taxpayers.”

    – this is incorrect. The local taxpayers pay a tax RATE that is proportional to the local per-student spending. E.g., if the spending is double the “yield” figure, the local tax rate is $2. Whether that ends up raising LOCALLY the extra money, or more, or less, depends on the amount of local taxed property (and the incomes of those locals who pay by income). Thus some towns end up sending extra money to the state, to help fund education in some other towns. This is the essence of Acts 60 and 68.

    I also wonder about the statement above: “The bill represents a 1.5-cent property tax rate decrease for homeowners”. Does this mean the “yield” is 1.5% higher? That does not guarantee a decrease in the property tax BILLS. First, if the local per-student spending increases by more than that percentage, which it usually does, then the local tax rate will increase, despite the increase in “yield”. Moreover, for those paying by property value, if those values increase (adjusting the “common level of appraisal”), then the tax bill increases accordingly, even if the rate stays the same.

    However you cut it, the property tax / education funding crisis just keeps getting worse. As long as the teachers’ pay and benefits increase faster than the incomes of the rest of us, the pain will literally increase exponentially.

    • Tyler Samler

      Moshe, the corporate prison we live in IS exponentially increasing pain every year. The perpetrators are not the teachers. Teacher compensation hasn’t kept up with inflation since the 60’s, and the economy has doubled since then. Productivity has doubled since then, but the wages are relatively unchanged. $1 today is $6 less in purchasing power from 1970.

      This is the last stand for organzied labor in this country. It started in Wisconsin and now it’s happening here. Ever since Taft Hartley in 1947, labor unions – which now consists of 13% of American workers- have been beaten down. NAFTA and WTO further jeopardized influence of labor unions because companies can shut down and go into some communist and fascist countries abroad where workers are forced to know their place at .80 cents /hour. How ever you cut it, the real “pain” causing variable in this equation is the profiteering, gouging corporations that are run by the ruling class.

      Collective bargaining is a human right it’s built into the UN Declaration of Human rights around the world. One of the indications of a democracy is whether there’s a vibrant, independent organized labor union. Unions gave America the weekend, 40 hours, overtime, a minimum wage, protection on pensions, better working conditions, etc.

  • Peter Chick

    This issue is like a third rail. I think the teachers union has their hooks in the VT legislators quite deeply.

    • Tyler Samler

      Not as deeply as Exxon Mobil, Walmart, ConAgra, Starbucks, McDonalds, Pfizer, Coco-Cola, JP Morgan Chase, and Comcast… They don’t earn their money, their workers do. The fat cat, greed-mongers sitting at the top need to give workers what they deserve. Single-payer, quality health care. The teachers are leading this fight.

  • The NEA has been notching one victory after another the past year.

    • Tyler Samler

      Ken, look beyond the end of your nose. The greedy, master class is profiting every time we have these petty disputes among our own working class. You think these pennies we’re fighting over matter when compared with the 800 billion dollar military budget our money goes to? Or what about the trillions that banks sitting on and collecting from – on the backs of taxpayers bailouts?Corporate tax reform would give us all a raise… GE, for example, paid zero federal income tax over the last decade. In fact they made money because the system is so backwards.

      Full medicare for all would save us billions every year with better outcomes. Your not gonna have $330 billion of billing fraud in the health insurance industry (according to Malcom Sparrow Harvard University).