 Vermont PBS in cooperation with Orca Media and the Vermont Press Bureau presents Capital Beat, the Week in Review, from the Vermont Statehouse. Here's host Neil Goswami. Welcome everyone to Capital Beat. I'm Neil Goswami with the Vermont Press Bureau, and we're glad you could join us here back in the Statehouse this week. Last week we sat down with Governor Phil Scott, and this week we have the House leaders, Republican Don Turner, the Minority Leader, and Joe Krawinski, the Majority Leader. Thank you both so much for being here. Thanks for having us. We'll get into some pretty meaty policy stuff in a little bit, but I want to first start out with the fact that we have a new political reality here in Montpelier of divided government for the first time in a while, six years. We have a Republican governor, a Democratic legislature, and I'm wondering if you both can sort of explain how that changes your approach to trying to govern from the legislative side, being the majority, being the minority. Let's start with you, Representative Krawinski. How does it change your caucuses approach to governing this year? Well, I would have to say that I'm not sure it changes our approach that much. I mean, at the end of the day, we need to work together to govern, to get things done, to grow our economy, to create healthy communities across the state. And so I think what's even more important for us is how we're going to work together and deal with the changes that come from Washington. And I think that creates a whole different dynamic that we really haven't had before, I think, between the governor and the legislature and DC. And I think it's going to create some challenging. It could potentially create some challenging legislation or impacts on our state, but also it could create opportunities for us to really work together to find solutions to help Vermont. Do you see the bigger challenges this year being Vermont versus whatever the federal government is doing rather than Republicans versus Democrat here in Vermont? Well, I think it's so hard to speculate exactly what's going to happen in DC that we will have to address, right? And I think we want to work with the governor and with our friends across the aisles to make sure that we can move policy forwards that grow our economy. And I would say that we welcome the governor's budget adjustment that reflected investments in higher education, security and safety for Vermonters and protecting Vermont children. And those are things that we all support and can work together to move forward. Representative Turner, you have been accustomed to being in the minority, at least in the legislature. What changes for you now is you have a fellow Republican in the governor's office. Do you feel buoyed by that, that your ideas, that your caucus' ideas will get a greater airing this time around? Yeah, I think that the governor sets the agenda. I mean, the governor lays out the proposals and the legislature usually reacts to those. So yeah, I think that we're starting from a whole different place than we have in the last six years. We've had single-party rule in Vermont over the last six years with a Democratic president. So now we're going to have a Republican president, Republican governor. We're still in the minority and we've worked with the majority and over the years on bills that we could agree to. And we've done some good things, I think. Areas that we are very focused on and still have remained very concerned is the state spending. You know, I've been saying since I've been a leader that we've been spending far more than the state could afford. You know, we spend, the general fund's been growing at over four and a half percent with revenue growing at less than two. And we've added millions and millions of new taxes and fees in that time frame. And yet we come back here and we still are facing a downgrade in revenue, a budget that's continuing to grow faster than the revenue stream. So we've got some challenges here. But like Jill said, I'm prepared that we're here to work, to do what's best for Vermonters in Vermont. You know, we love the state, we believe in the state. We look at things from a different perspective. You know, I'm optimistic with the Republican governor that we're going to see, you know, things more in line with what our caucus members may have wanted to see in the past. But it's going to take compromise. I mean, again, there's large majorities. You know, Jill has a large majority over our caucus and in the Senate. It's even bigger. So it's going to be a challenge, you know, from my perspective and my role has changed dramatically in this election. And that, you know, I've had the same position for the last three terms. This is my fourth term as leader. But historically, I've been playing defense. You know, we got a proposal from the government that was usually way beyond what our caucus was willing to, except for our constituents. And we had to be the voice of opposition and say, wait a minute, let's slow down, let's bring these points up in committee. Let's argue the points on the floor. Now it's going to be almost an offensive position. You know, the governor sets the agenda, as I said. And it's up to us to try to help move that agenda. So again, my role has changed. We don't know what's going to happen in Washington. I know we've had a peaceful transition of power over 200 years in Washington. Hopefully that continues. But we are Vermont has been living very long and hard off federal dollars. And at some point, Vermont's going to have to accept the fact that we can't keep getting more and more and more federal dollars and we have to bring that in somehow. So those are some areas that I think that we're going to have to work on. Okay. You mentioned revenue downgrade. The state was already facing a 70 million dollar or so budget gap in the 2018 fiscal year. State economists, an economist for the legislature and the governor announced their consensus revenue forecast earlier today. And they downgraded it by 24.6 million for the remainder of this fiscal year, really five and a half months more of this year. What does that tell you about how you can approach budgets moving forward? Let's start with you, Representative Krawinski. Does it in the real reason was corporate tax revenue is down and it's not expected to grow anytime soon. So knowing that, how does that, does that change your focus at all on how you build a budget? Well, I think it shows that we still have work to do, but we're making progress. I know that I've been hearing numbers floating around about how our number of job openings are still going up and it's, we have a very tight labor market and the number of layoffs in the state are going down. I think we're at a 16 year low, but it's been 16 years since it's been that low. And that shows that we are making progress. And so I think what we need to do is figure out what our priorities are and for the Democratic caucus that's ensuring that we're working on policies around workforce development that help have us have a healthy economy here. And what does it tell you Representative Turner about about moving forward in the budgeting process, knowing that according to the economist tax revenue, corporate tax revenue isn't expected to rebound for some time. Well, I think, you know, it reaffirms what we've been saying for the last six years that the state has been spending far more than it can afford. I mean, we have to live within its means. You know, if we do it at home, businesses have to do it, state governments got to do it. We've got, we can't be everything to everybody forever and we need to grow the economy because we all know and we all agree that if we grow the economy, that gives us more natural state revenue and we need that because we have some programs that are, you know, there are priorities on all parts and we want to make sure we can continue that. But we have to really look at what we're doing and spending. And you know, as I said, we've been talking about this for six years. This is not new for me to talk about downgrades in revenue and over spending. And with the economist saying that we're seeing a relatively small amount of growth consistently over the next five years, we've got to get spending under control. And that, you know, I'm optimistic that, you know, Governor Scott will put a budget for it that will bring that spending more in line with what we can afford and then work toward making it more sustainable as we go forward. The revenue downgrade described by economists today is really, people at home might find this to be strange. The economy is growing. It's doing what we want it to do, which means businesses are looking to expand and they're trying to hire more people. The labor market is tight, so it's driving up wages, that means more people are working, their wages are going up. And yet that is a negative thing on our state revenues because it means businesses now have expenditures. And so they have less profits in their tax payments to the state go down. Is that a frustrating scenario as people who are working to put together state budgets knowing that slowly but surely the economy is improving, but that in turn is hurting our power bottom line? Representative Kraminski? That's a really interesting question. And you know, I think that when looking at the big picture, as we work together to figure out how to tackle the growing and making this budget work for everyone and making sure that all Vermonters have a fair shot, I think we all share that goal. I just think of these challenges that we're facing that we're trying to get control over that's still a burden on our budget. And I just think right to the opiate crisis that we're dealing with. And I think that we've created some really strong policies that help to get people access to treatment. Waiting lists are decreasing, but the number of children going into custody because their parents are having issues, they're having addiction to opiates, we're still not there yet in tackling that. And I think that is such a priority for all of us in ensuring that our kids are safe and taken care of. And so I think it's going to come down to, like I said, we need to come together and determine what our priorities are and understand that there are some things that we have to address. Typically your caucuses meet ahead of the legislative session or the first week of the session and you sort of game out what your priorities are. What is what are the top priorities of the Democratic caucus in terms of policy or legislative issues? What will you be focusing on? Sure. Well, we spend a lot of time together talking about what that meant for people, you know, knocking on doors over the summer and fall. We had a huge spread of ideas that people heard about what we can do to help make us have a healthy economy. And so we really heard the common things around workforce development, economic security, policies like raising the minimum wage, but also really focusing on what can we do to make it, to make childcare and housing more accessible to people. And I think that goes back to what we're talking about, about how we can support our businesses too, right? I mean, some of the challenges that businesses are facing is that, you know, when trying to recruit employees, they can't find the affordable housing that they need for that job, or they don't have access to high quality healthcare where this job is. And so I think they're all really related together. And then I would say the other thing that was a huge theme in our conversation was just cleaning up our lakes and waterways and our commitment to see how we can make that possible and keep our commitment over the coming years. Representative Turner, any, any overlap there with the Republican Congress? I think there is some overlap. And, you know, I think that the opiate crisis of childcare and all that, but what we heard loud and clear, and we've heard this for a number of election cycles now, is the cost of living in Vermont. Property taxes, taxes, just living in Vermont is expensive. And people are feeling that, and they're feeling that crunch. So we heard that, and that's our top priority, is we've got a rain in-state spending so we can put the state on a more sustainable financial spending path. With that will come some more, I think, lowering of, ideally lowering of the cost of living in the state. So we're focused on that. You know, we heard a lot about people's health care. You know, they're very concerned about the cost of health care. Even the access to health care now is starting to become a concern, you know, wait times for people to get in the doctor's office and so on. Economic development, I mean, that's an overlap. I think Jill says, you know, that Jill mentioned, and I totally agree. Childcare, you know, good, good education. You know, we want to focus on, our caucus is focused on better student outcomes. You know, how do we get a better outcome? We're spending the most money, or close to the most money in the country, but are we getting the best outcome for our Vermont kids? We're not, we're not sure. And we think we need to look at that. So there's a lot of, a lot of things I think they do overlap, and I think there's some common, common goals and common ways of getting to where we want to go. But, but the spending is definitely got to be reined in. You know, and I wanted to just touch on, I didn't get a chance to get to your last question about, you know, the business cycle. Yeah. I think that the business cycle is healthy and is normal. And Jill talks about raising the minimum wage. I would rather see that happen on a natural basis. You pointed out, and I think even the economists pointed out that the job, the people applying for jobs is declining. So there are more job openings, which means that it drives up what employers are paying those employees. I want to see that continue to play out, not have the legislature or government artificially step in and say, here's the minimum wage this day. So we want that to grow because we want people to aspire to get higher paying jobs. We want them to, we also got to address the benefits cliff. I mean, we have so many people in Vermont that can't go to work because if they go to work, they're going to lose some sort of subsidy or benefit that makes it, it's not worth their while to go to work. So we've got to address that issue. And I think if we deal with that as well as dealing with the type of jobs that are available and growing that, we're going to see people want these jobs. Can I just follow up on that for a second? Because so I would just say that with the benefits cliff, we have that problem now, right? Like regardless of the conversation about raising the minimum wage, people are being forced with those decisions. So I just heard a story last week from, I was a banker who had approached an employee to give her a raise and she said, no, she turned him down because she would lose her, her childcare subsidy. That does not reflect our values. And what we want to do to help support hardworking families in this state. And so I think that, you know, that is a whole separate issue that we need to work on together to figure out. And I totally agree. I mean, we can't have, we can't have people who won't take jobs to better themselves because they lose out. And then so you have no one to create disadvantages. Exactly. Exactly. You know, I have, you know, I've heard the stories like this, you know, and we, we can't have that. We've got to have the business cycle and the economy grow and have people want these higher paying jobs and get the benefits and receive the benefit of working harder and getting more income. Okay. Let's, let's step back and revisit the minimum wage discussion. House Democrats this week unveiled a proposal to raise the minimum wage from its current $10 per hour to $15 per hour by 2022. Yeah, for 22. Yeah. Over a five year period. Why, tell me why that's a good idea and what the benefits to the state are? Sure. Well, one of the things that we heard knocking on doors this summer is in fall is that people's wages aren't keeping up with the, the cost of living that they are struggling to afford the childcare they need, the housing they need because wages just aren't keeping up. And so I think that this was one of the clear policies that came for that say this is something we should look at to see if this can really help our middle class families be more successful and studies show that when people have more money in their back pocket it actually helps small businesses in their communities because they have that money to spend. Do we know how much small businesses tend to grow by lifting wages as Representative Turner would say artificially? You asked this question yesterday and I said let me get back to you because this is a very complicated question because we're talking about business sizes. We're talking about rural versus urban. You know there are all these different factors that play into it and one study that I shot saw that I thought was really interesting was that the number of small businesses in Washington state has been growing and they have one of the highest minimum wages in the country and so I know that study says that is a part now I think there are probably other factors that help support that but I think if they are able to do that and see an increase we need to look at that. I suspect the Republican caucus has a slightly different view of this issue. Explain to me why maybe it's not the greatest idea. We're open to listening and I haven't seen the study that Jill's referring to but our caucus is made up of a lot of small businesses. I mean a lot of small business people are members of our caucus and what we hear and what we see and we know to be the reality is that some of these are real small mom and pop places that have two or three or five or six employees. Their top employee might receive $13 an hour today. So what are you supposed to do with the people that have some responsibility say there are system managers making $13 an hour when you bump up the kid who's running the bottle room to 15 what do you have to do to all the rest of them the rest of the employees. So the cost to the businesses far more than those few people that are making minimum wage if there are anybody they're making minimum wage. So the issue that I see that is the greatest detriment is that you know the size of the business is really going to impact who can survive and who can't. If you have a number a chain of convenience stores versus a single sole sole proprietor you're in a much different place in buying power and so on. So those those factors have to be looked at and have to be considered if we're going to look at raising the minimum wage what 50% over the next five years that's a substantial increase to business. I prefer to see us make the economy more viable for businesses to prosper because we know from history and we know that businesses that prosper generally pay people more they offer more benefits they do more for their employees. So if you make it so restrictive and they've got to pay a minimum wage of X and they're just barely surviving that's all they're going to get and we're not going to see those businesses to be around for very long. Is there is the room for that discussion that debate over business size number of employees all these factors different factors. Absolutely. I mean we have a whole committee process in place to vet these policies and I think our goal here is to put a policy out for people to react to to chew on to talk about into debate. You know I think that's really important to put something on the table to start with and we look forward to hearing what other ideas you have that you could put on the table and we have a strong coalition of almost 30 organizations and some of those are business organizations that have said we support raising the minimum wage and we had one business owner at our press conference yesterday who was talking about how her raising the minimum wage she supported it and it helps their business for many different ways some of it around retention which I just think is another interesting thing for us to talk about especially given the climate we're in and that we have all these job openings we're trying to find people to stay in them or to apply for them. So I just think there's a lot of different perspectives around it and I think this will be at least one proposal and I'm sure there will be more that land on that table and committee room for them to discuss. Can I just just want to say we didn't talk much about it kind of alluded to it a little bit earlier is that our labor market is declining. We're going to see a huge decline over the next 10 years. That's going to put natural pressure on these employers as I said earlier to raise their wages and that to me is a far better way of doing it than legislating it from Montpelier or from Washington. OK. Well House Democrats also be pushing forward on a paid family leave bill this year? We're having that discussion about where that falls in the list of our priorities. I mean it definitely is a policy that we've been looking at and has been on our list of you know potential things that could help retain or bring families to the state because of it because let's let's face it. It's so hard for working families right now. You know to people both parents in the workforce and trying to be able to take time off when they have a child and I think that this is actually people to come to Vermont and so I think that is something that we should look at and there's been a business coalition coming together to advocate for that so I would say something that we're looking at. Representative Turner is there do you see a viable path forward on a paid family leave? You know there's always room to discuss it. I think if we if we have if our economy starts to grow and because more vibrant and businesses are moving and we're having this type of growth in our economy that would support that I'm all for it. Yeah. But it's we don't have that. We haven't had that for a number of years. It's not projected in what the economists are telling us about growing the economy at the current rate at the current based on current regulatory rules and so on. So if we could come up with some you know ways to modify the regulatory process for a number of businesses where it made it more beneficial for them and they could prosper. I'm willing to look at all that. I think our caucus is willing to look at we want we want Vermonters to prosper. We want them to have time with their family. We want all that. I don't think any of us don't agree with that. The problem is if we have no place for those people to work and we don't have any housing that they can afford to buy they're not going to be here and if we keep putting these legislative obligations on them from Montpelier that you have to do this and you have to do that and you have to do they're not going to be here. Yeah. So that's where I my concern lies. Okay. Governor Scott has promised to close the budget gap without raising any new taxes fees any new revenue at all representative Kroinsky is that is that a feasible path forward in your view? Well, I just don't think it's the right place to start the conversation by putting this tight box around where we can negotiate and compromise and really brainstorm and vet ideas around. You know, as you know we have so much uncertainty with what's happening in Washington D.C. And I think it's premature to be putting certain parameters like that on our budget without knowing what we're going to have to deal with. I think it's possible. I do. I think it's absolutely essential. I think it's absolutely essential that in the last two years we raise this this legislature raised 95.3 million in new taxes and fees. The session before was over 50 million in new taxes and fees. How much can people afford? As I said earlier in this discussion people have said they can't afford to live here. Yeah, we our response here in Montpelier is let's raise more taxes. Let's raise more fees. When you go to register your car you want to pay more. We can't continue to do that. So I think the discussion has to start there and we have to get state spending within our means and that's going to take some work. It's not going to be. Well, let me follow up with you. Have you shared has the House Republican caucus shared ideas with Governor Scott on where to cut? We have talked in the past. We haven't shared any of the proposals that we put forth last year. I haven't. Now I have a number of caucus members. The governor met with every single one of our members last week. So they've shared ideas. I haven't seen anything that the governor is proposing or how he's going to approach this. But we have put a number of proposals on the table in the past that have essentially been ignored. We're still on the wall. One for one case would be employees. And we don't want to lay off a bunch of state employees. But we put a proposal forth last biennium that would lower reduce the state workforce by 10% by 2020. And that would be achieved through natural nutrition. Those are common sense ways to get where we need to go from our perspective without affecting any state employees or any services being offered today. I have just a couple of minutes left with the both of you. I want to ask you about marijuana and marijuana legalization. Can we expect a bill to legalize marijuana this year? You can expect several different versions of that bill to hit the committee process. I've already heard about four or five different versions of it. So that is definitely going to be proposed from all various different members in the body. And the judiciary committee will talk and prioritize as a committee about where that falls and how that discussion goes. And I think we have a really strong leadership team in that committee and look forward to seeing how those deliberations take place. The regulated market that was proposed last year failed spectacularly in the House last year. Was that a caucus issue? Was that a party issue? Or did you both leave that open to your members to vote as they please? We left it open in our caucus and I think this year we have 24 new members in our caucus. So it's a brand new debate in our caucus. But what it comes back to us for determining our caucus priorities is really around does this help us grow a healthy economy? And I think at the end of the day that's what it's going to come back to. And for you, was it a... It was not a caucus position. We had several people that were in favor of some form of allowing it to come about. We didn't take a caucus position on it. Most of our people were opposed. We're dealing with this opiate crisis and so on. We just don't feel that we need to legalize another drug at this point. So I don't believe it'll be a caucus position this time if it is. I mean, as Jill said, it's going to come up. We just don't know how or what form or so. All right. We will leave it there for this week, Representative Kroinski, Representative Turner. Thanks so much for joining us. And on behalf of Orca Media and Vermont PBS, I'm Neil Goswami with the Vermont Press Bureau. And we thank you for tuning in. Join us again next week when we'll sit down with Speaker Mitzi Johnson and Senate Pro Tem Tim Ash to discuss Governor Scott's budget proposal.