Sibilia: Act 46 means paying the (tax) piper for years to come
Let's first ground this ongoing discussion in some Vermont reality:
We have a major demographic crisis underway in much of Vermont in terms of declining workforce population which also manifests as declining student population. This crisis is creating a huge stress on our employers, our municipalities and our rainbow of communities statewide. We have a state education finance system for which no single entity is accountable, that can not scale equitably, resulting in taxes going up statewide and a education structure teetering on the edge of violating Brigham when it comes to student opportunity. On top of that, our entire education governance system in the midst of complete reorganization through Act 46, and the next few years are going to find us paying the (tax) piper even more because of the tax incentives associated with Act 46.
Because of changes that came about as part of the federal Affordable Care Act, Vermont's Education Health Initiative (VEHI), changed all of the health insurance products offered to school districts for employee benefit plans. This was done largely to avoid the "cadillac tax" that the ACA imposed on high cost employer sponsored healthcare plans: an annual 40 percent excise tax on plans with annual premiums exceeding $10,800 for individuals or $29,500 for a family starting in 2020.
Currently every school board in Vermont has to bargain the changes to employee health insurance benefits as part of regularly scheduled negotiations as a result of these new plans. On Jan. 1, 2018, all school employees will be on the new health care plans.
On April 20, the Governor held a meeting with the Speaker of the House, President of the Senate, the VT-NEA, VSBA, and VSA in order to discuss a proposal to transition school employee health insurance negotiations to the state.
The Governor proposed to change the scope of bargaining at the local level to specify that health insurance negotiations for school employees would take place between the State and the VT-NEA. This proposal is not stripping teachers' ability to collectively bargain. Rather, it changes the dynamic and means the transition to new VEHI plans would be negotiated at the state level. Contracts that have already settled locally would not be impacted. If adopted, the plan could result in up to $13 million in savings to the Education Fund in FY 2018 and ultimately Vermonters, depending on the outcome of negotiations.
In Vermont, there is variety in total compensation provided to educators, depending on the region of the state and the socioeconomic makeup of a community. In 2017, we have a unique opportunity to ensure equity in the health care coverage available to all school employees, while at the same time delivering the opportunity for millions of dollars in savings in property taxes. Despite the fact that we have a statewide education property tax, enacted as part of Act 60 to ensure educational opportunity equity throughout Vermont, (required by our Vermont Constitution!) there are almost no mechanisms in place to ensure that equity is happening.
For decades lawmakers have allowed themselves to believe that equal per pupil spending is an appropriate measure of equity of opportunity. Think about that. Our laws and funding mechanisms are constructed to strongly encourage a classroom of 10 students to spend the same per pupil as a classroom of 20 students. Not the same per classroom, the same per pupil. Believe it or not, just about every year the Vermont Legislature undertakes an effort to "cut property taxes." It almost always revolves around creating downward pressure on per pupil spending. The problem is this, we simply are not able to equally appropriate all of Vermont's students into equally sized schools. And so in almost every other year, when state elected officials try to cut property taxes, we are instituting cuts that will be felt unequally, unpredictably, threaten program and staff cuts, and frequently cause the most upheaval in Vermont's most rural districts.
The "tragedy of the commons" describes a situation where a shared-resource system with individual users acting independently - according to their own self-interest - behave contrary to the common good of all users by depleting or spoiling that resource through their collective action. There are a number of shared resources at play in this current debate: the statewide education property tax, the incredible education staff throughout Vermont, and the dedicated, primarily volunteer, citizens serving on school boards throughout the state. The notion that any one of those resources is controlled locally and only making decisions for its voters is a fallacy. Every vote in every district impacts every other district in the state. Every negotiation impacts other negotiations throughout the state. The Governor's proposal to lift healthcare negotiations to the state level is the very first proposal I can ever recall that looks to create a mechanism that will ensure that both investments and reductions in teachers healthcare will be felt equally by our dedicated education employees throughout the state. Additionally, the Governor's proposal presents an opportunity to achieve these savings without harming anyone. The proposal invests nearly $50 million back into educators to ensure they are not paying higher out of pocket costs.
The Governor's proposal, to negotiate at the state level and modified slightly to return all savings to the Education Fund, was introduced in the House as the "Beck amendment" and failed in a tie vote. I was a co-sponsor of the Beck amendment and spoke at length on the floor on behalf of my students, districts and taxpayers. A second proposal by my House colleagues, the "Webb amendment" would have essentially maintained the status quo in individual district negotiations except that any savings a district realized would be collected at the state level and returned to the district as a grant. This proposal was little more then an optical illusion in terms of changes to the status quo, did not include a mechanism to ensure there will indeed be savings, and provided no relief to school boards or help in negotiations. The current proposal from the Senate withholds 6 months worth of the Governor's estimated $26 million in savings from districts on an individual district basis. It does not require that those savings come from healthcare, and so the very real possibility is that those savings will come from educational programming for students. And then we will be right back in the same place of assigning unpredictable and uneven cuts in our school districts statewide.
What we have in front of us is a proposal for statewide accountability of our statewide resources. Through a statewide collective bargaining with employees, we have the ability to provide parity in benefits for ALL of our employees and accountability for ALL taxpayers. When I am out in my communities they are demanding the accountability. I am proud that Vermont's Governor is requiring the parity that statewide bargaining can bring for all employees in addition to taxpayer accountability.
The Legislature will return to Montpelier tomorrow. This is the second week over the regular session. We have to pass a budget and resolve this standoff. If you have not weighed in and you are reading this, I encourage you to do so. This is really important. You can find the links to contact your legislators, to call Governor Scott or to listen online at the Vermont Legislative webpage. Call me at 802-384-0233 with questions, complaints or support.
State Rep. Laura Sibilia, an independent, represents the Bennington-Windham District. The opinions expressed by columnists do not necessarily reflect the views of the Brattleboro Reformer.
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