December 27, 2017

Vermont Legislative Preview 12-27-2017

An analysis from DRM's Government & Public Affairs Team

Dark Demographics Loom Over Legislative Agenda

Gov. Phil Scott and Democratic lawmakers spent much of the last legislative session circling each other like wary boxers, taking short jabs but each side reluctant to fully engage. Democrats seemed to be genuinely perplexed about how to engage politically with someone who is viewed by the public as a genuinely nice person, fearful that they might be seen as being harsh or unkind.

That changed somewhat at the end of the session when Scott proposed a dramatic change in the manner in which teacher health benefits are negotiated and provided. A brief wrangle ensued, and an agreement was reached that allowed the legislature to adjourn with neither side able to declare victory.

Lawmakers return to Montpelier on January 3, and it seems likely that the armistice that predominated for the 2017 session will give way to partisan sparring that is more typical when the legislature and governor’s office are held by different parties.

Democrats have a much longer wish list for the new year than they did a year ago. It includes an increase in the minimum wage, controls on prescription drug prices, funding for water quality, and greater regulations on consumer data. Also on the list are two bills that were started but not completed last year – marijuana legalization and paid family leave.

For his part, Scott seems more focused than ever on the issues of affordability and job growth. Virtually all of the governor’s speeches include a reference to 6-3-1: six fewer workers in the workforce each day; three fewer students in the school system; and one child born to a drug-addicted mother.

The difference in priorities is likely to play out most dramatically on the issue of education funding. There is an $80 million hole in the education fund, and the state is projecting an education property tax increase of seven percent. Those numbers are driven by an increase in per pupil spending that, in turn, results from a relentless decline in student population since 1997 that has been coupled with an increase in school staff. Vermont’s student-to-staff ratio of 4.2 is now the lowest in the nation.

Scott is expected to propose legislation requiring school districts to reduce staffing levels and lower the growth of per pupil spending. Those proposals will be fiercely opposed by those who believe school spending and staffing decisions should be made at the local level.

Lurking in the background of the bleak education statistics are broader, long-term demographic trends that portend even greater economic challenges. Vermont is now the second oldest state in the country (behind Maine), with a shrinking labor force and a burgeoning population of retirees.

There is bipartisan agreement that Vermont must do more to attract and retain young people in order to be economically healthy. The Democratic response is to make Vermont more socially and financially equitable, while Republicans believe the path to economic vitality is through greater fiscal discipline and affordability. Those opposing visions will color virtually every major debate in the legislature over the next five months. 

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