 Hello, welcome to Vermont Press Bureau's Capitol Beat. I'm Steve Pappas, editor at the Times Argus. Today I'm with Joshua Gorman and Neil Goswami, both writers for the Vermont Press Bureau. The Press Bureau is the statehouse arm of coverage for the Times Argus and the Rutland Herald. So these two guys spend most of their time at the statehouse during the legislative session and traipsing after the governor and such. In just a few days, the legislative session will be opening and there are plenty of topics that we are gonna be discussing today as a look ahead to the session and the key issues that the legislators will be taking up. A major one, gentlemen, is going to be on the second day where the legislature is going to vote on who our next governor will be. Talk a little bit, Neil, about how that came about and what we can expect. Well, as most viewers will recall, the governor did not get 50% of the vote. No candidate received 50% of the vote on election day. And the Vermont Constitution requires the legislature to elect the governor when that happens. So on January 8th, all 180 members will gather in a joint assembly. They will cast ballots and choose from Governor Peter Shumlin, the Democrat, Republican Scott Milne, who in the vote came in just about, I think, 2,434 votes shy of toppling the governor. And then the distant third place, libertarian Dan Feliciano, who had about 4% of the vote. It was a pretty shocking election result for all of us who follow and cover this. We had seen some polling numbers in October that showed a double-digit lead for the governor, but still under 50%. And sort of in hindsight reporting, we now know that the governor and his team knew it was gonna be much closer on election day, and it certainly was. Whether they thought it was gonna be that close still is unknown, close, I guess, is a relative term. But regardless, the first action in the legislature this year will be electing the governor. And it's all but assured that Governor Shumlin will be re-elected. So it would be a major upset and surprise if the Democratic-led legislature did not select him. Are the, are both candidates at this point, and they're not candidates, I guess? Well, I don't know where they are, I guess. It's in some ways they are. I mean, there's a political commercial that came out last week, funded by what Vermonters for Truth in Government, I believe, that are advocating for Vermonters to contact their legislators and urge them to vote for Scott Milne on election day. So in a way, there is a second campaign going on. There were two major issues with the election outcome that could have drastic differences in how people vote. And this is a secret ballot vote. So people, the lawmakers don't actually have to give a reason why or indicate anything on the ballot other than a name, right, that goes into the box. But Josh, what are the issues? I mean, there's, if it goes according to the party, you have one outcome. But if you go by district, legislative district, we could have a completely different outcome, probably still with Peter Shumlin winning, right? Well, it's hard to say. If you go strictly by party lines, then without a doubt, Shumlin's got roughly a two to one majority over Republicans in the House. And so if people, in the House and the Senate, so if people were to vote strictly along party lines, then Shumlin will indeed be our next governor. However, if you wanted to count strictly by legislative districts, it comes down interestingly enough to a 90-90 tie. That was some work that you did shortly after the election. Right, right. It showed that in fact, if people in every legislative district vote solely by how their constituents voted at the governor's election in November, then we'll find in fact it would be a 90-90 tie. And they'll have to keep voting until there is a majority. But we already know that's not going to happen. Plenty of folks have already said how they will vote one way or the other. And even in districts where Milne won, those legislators have said that they're gonna vote for Shumlin or vice versa. So we know it's not going to be a 90-90 tie as much as we might enjoy that covering it. And it's probably a fair bet that it's gonna be a two to one margin when it all is said and done. Have the candidates been actually reaching out to the legislators or are they allowed to? They're allowed, they can do anything they want. Scott Milne said he might run his own television ad, trying to convince people that he's the right guy for the job. Milne is saying that he's not calling folks, but folks are calling him and he'll talk to them if they do. I spoke with House Speaker, Shab Smith, who said they're not twisting any arms or telling anyone how to vote. They're allowed to do, the Democratic caucus can vote however they want. And he wasn't sure if the governor or his team were reaching out to individual members of the Democratic caucus. So I think the governor is fairly confident that his party will pull through for him. And as I said earlier, it'd be a pretty major shock if they didn't. There has been talk about after this process is done about possibly changing, making a move to change the constitution so that maybe we get out of this gray area. Is that really necessary, do you think? Well, I mean, if you look at how other states do it, it's pretty unusual to have a gubernatorial election decided by a legislature. My sister who's back visiting from California when I told her about the scenario where no candidate got 50%, she assumed, oh, it's gonna be a runoff. I said, no, in fact, our legislators are the ones who make the final decision. Getting a change to the constitution is pretty challenging. You have to do it in two consecutive Ianniums, I believe. That's right. I mean, what we're looking at right now is that if Shulman is, in fact, elected by the majority of the legislators here in January, a lot of people are expecting it's gonna happen. It's gonna be two of his last three terms. He's gonna be elected by the legislature not by the voters of Vermont. And for some people that's troubling and for other people, I suppose that's not. Scott Milne has said that if he wins, he does have a budget in mind. He hasn't given any details. But the governor, certainly, and his budget writers are trying to come up with something to offset a pretty significant gap going into this legislative session. That's one of the challenges, but let's talk about it specifically. What is the state of Vermont up against and how does it change kind of the tone of the future for the future? Because this budget may redefine how we approach budgets going forward. That is sort of the indication that the governor is putting out there as we head into this. We're looking at $100 million budget gap that's on top of rescissions and gaps in past years. We just did a $30 million rescission in August. They're looking at about 17 million, I believe, by through January additional precision. So we have what the governor calls a structural deficit. And that's because the budgets have been based on projections of revenue growth that haven't panned out. They expected 5%, we are seeing 3% revenue growth. So that really sets you up for a bad bottom line when you're expecting more money to come in and you count on spending that. So what needs to happen is they need to figure out how to build budgets that are more sustainable and aren't counting on what right now is phantom money that's not coming into the state. There has been talk about possibly looking at eliminating entire programs rather than picking the pockets of each program throughout state government. I'm assuming the governor and his team are looking very closely at all programs across state government and all agencies and departments to determine what's the most effective, what's not working so well, what the state could live without. But the bottom line is the budget that he introduces for the 2016 fiscal year is likely to be much, much different than what we've seen in past years. And there's also talk about how the state has found one time sources of money in the last three or four years to balance budgets. And a lot of folks are saying, well, that money is gone now. We've sort of tapped all of the resources we have to patch budget holes and now is why we need to fix the structural deficit. So I'm sure you have a lot of advocates out there that are concerned that their program or their interest is going to take a hit as we move forward. Governor Snelling, when he was governor, brought in an approach that putting cost controls but also raised revenue in the form of certain taxes and fees. The governor, Governor Shumlin has kind of shied away from approach that does both. His position has softened on that, hasn't it? It certainly has. He has been adamant for the first four years of his governorship that he did not want to raise revenue. He didn't want to tinker with taxes in any way. He is sort of saying that he's taking nothing off the table now, which based on his previous speech is a pretty good shift in an indication that he recognizes the weakened position he's in as he enters this third term. And he knows that lawmakers have sort of been frustrated with him that he won't look at any additional source of revenue. There's a lot of issues that the state faces. One of them is Medicaid and finding a way to fund Medicaid. And that's a matching federal program. So the more the state can put in, the more the federal government kicks in. So one of the things that Speaker Schaff-Smith mentioned to me recently is that the state may need to look at raising additional revenue, specifically for Medicaid, to bring in those additional federal dollars. So I think we're likely to see whatever the governor puts out in his budget, in his proposed budget, if it doesn't include any revenue enhancements, I think lawmakers are likely to design their own budget that does include some. Yeah, Josh, one of the issues that has come off the table or is off the table and back on the table in a different form is that single payer has now been scrapped. The governor walked away from it after the financing plan looked untenable. Do we have any indication of how that conversation is going to shift and what we can expect from lawmakers in the course of proposals that might supplement an idea of single payer? Because some have said it's not dead, but for all intents and purposes, it appears it is. Well, I mean, Governor Shulin has said that he's open to any idea that might potentially work, and he's suffered a very bitter defeat, I suppose. He called it the most bitter, biggest disappointment in his political life. Biggest disappointment in his political career. And he said just recently that he's open to any ideas, and so it's certainly conceivable that the legislature might come up with an idea that somehow, if you can just move those economic shells around, that you can find a way to paper this that doesn't include a 9.5% hike on your income tax and 11.5% hike on your payroll tax. Now, whether there's the political will to do that in the legislature is something that I would question. I think that Republicans in the legislature are very relieved that this is not going forward. I think there's a lot of Dems that are very happy that this isn't necessarily going forward. And so I think, yes, you might see some advocates who are gonna push for this, but I don't see there's gonna be a lot of political will to continue this single day effort in the upcoming session. But the criticisms are still gonna remain there because the health exchange still isn't at 100%. So the public financing of healthcare is off the table for this session. And I don't think you're gonna see many people. You don't think that the Republicans will have a plan for that? No, no, so that is off the table for now. And what happens now is the conversation surrounding healthcare shifts from how we're gonna pay for it to a lot more about how much we're paying and why we're paying this way. Payment reform is sort of the buzzword right now. And the governor talked a lot about fee for service where doctors are paid based on the number of tests they run and how we need to get away from that to sort of a system that's based on the health outcome and how healthy somebody is after the doctor has worked his or her magic. So I think payment reform and working with the Green Mountain Care Board, the sort of regulatory authority over healthcare matters in Vermont to lower the cost of healthcare is going to be the focus. I don't think that the conversation around healthcare is diminished at all, it's just changed. And of course you will have Chris Pearson, the progressive leader in the House. Folks like that will be very adamant about continuing the conversation about how we finance healthcare and needing a public system. That isn't really, it's got nowhere to go. It's done for now, we know that. But we'll still hear from folks who really believe in it that we need to continue it. Josh, the issue that is going to be front and center is gonna be education, which is right on your beat. Talk us through, but there's two kind of pieces to this. What are we gonna see then? Where are the battle lines gonna be drawn? Well, I mean it's, yes there are two separate issues that are kind of tied up in this. So one is property tax and informal polling and just discussions in our letters to the editor section, it's just people on the street. We've heard that maybe this is the year that folks need, that the legislature needs to do something to revisit the way that we pay property tax. It's also what we pay property tax for. The majority of our property tax dollars go to support our education system, which is the second component. Our education system is just hemorrhaging money. We're seeing rising costs with declining enrollment, lower pupil counts, and you're seeing, and going back to health insurance, you're seeing health insurance as part of a teacher's compensation package just increasing every year. So there's some discussion, there's a number of proposals, but one of them is decoupling the idea of property tax and education funding. So there are notions of having, there is a legislative working group that Shep Smith put together that had a host of proposals, some of which contradicted each other, but it's good to put everything on the table. And so one of the proposals is to have a single statewide property tax that would be significantly lower than what people are paying now, and instead fund education through income tax. Now the income tax can be based on your region. So if you live within a school district or supervisory union and you vote for your school budgets there, that your tax, that your income tax rate is gonna be based upon this. And the idea is the whole skin in the game argument. Some critics will say that the current funding system given income sensitivity and given the fact that some people are not property owners, that there are a lot of people voting on school budgets, who in fact are really necessarily interested in what are those budgets, ass or not, and even not impacted by a rise in their property tax. There are also proposals again to increase proposals to somehow consolidate. So looking at ways to save money, which is the other component. You can change the way that you fund education if you don't change the amount of money you're spending on education. We're gonna have the same problem you're just digging deeper into the other pocket. So there's proposals again to increase incentives to encourage school districts to consolidate so you can have like sharing of say special education services and transportation services. However, we've had these incentives on the book since 2010 and thus far the carrot approach has not been working. Right, it's only been a handful of districts, schools that have actually taken advantage of it. Very, very few. Chittenden East recently voted two to consolidate down in the South Southern Midlands. School District that contains Landgrove and Peru and I think of London Dairy, consolidating created a red regional education district. But so far it hasn't been successful. The all-carat approach has not encouraged people really to consolidate. So you might see in addition to the carrot a stick which is what I've been hearing that there's going to be some sort of mechanisms put in place to penalize school districts that continue to operate small schools that they're gonna see the small school grants disappear and it's gonna be financially onerous on communities who really choose to keep open these small schools and not share services. The lawmakers, there's a discussion at that level but at the local level there's also the discussion that this is not necessarily palatable and is the local control issue and discussion really relevant or is it an old conversation that just needs to go away at this point? Well, you know, everybody wants to tell local control but they don't necessarily want to talk about local responsibility for that control. You know, your local school board and the people who vote on the budget, they control your staffing levels. They control whether or not you combine grades. If you close schools, if you consolidate, all of these pressures that are being placed on the education fund as a whole are coming from local communities and local communities will again point their finger back in Montpelier and justifiably so. Because Montpelier places a lot of mandates on them that they then have to figure out, be it universal pre-K, finding ways to support dual enrollment, having to find out a way to put every child on an individual learning plan. These are all things that Montpelier mandates and then the school districts have to scramble and do. But at the same time when you have 85% of the education fund budget is assessed for salary and benefits, it isn't just mandates that are coming down from Montpelier. Are we gonna be looking at pensions again this year? Yeah, I don't know who has the courage to actually do that. But yeah, I imagine people are gonna look at pensions. You know, a couple, you know, a big stressor on the education fund is the fact that the teachers pension, the teachers retirement account was transferred from the general fund into the education fund. So that puts some stress for sure on the education fund and therefore the property tax payers who are supporting that Ed fund. Yes, you might have a look at that. You might have a look again coming back to healthcare. The fact that teachers healthcare plans are very expensive, that they have better insurance than you or I. And so there's gonna be some discussion, well, can there be concessions there? But those concessions are done at the individual board level, again, because boards negotiate their individual contracts. So what molecule you're going to do about it, I really don't know. Neal, are there other third rail kind of issues that are gonna come up this session? What are we expecting now to be the big talking points that single payers kind of off the public level? I think you'll see, well, advocates will come back and be looking for paid sick leave. You know, the legislative leaders last year were adamant that the votes were just not there. They were accused of not having the political will to do sick leave and raising the minimum wage at the same time, but by all accounts, it does appear that the votes were simply not there. And legislators just weren't willing to support that. So I have a feeling there's gonna be a strong push now that single payers off the table for paid sick leave. Again, marijuana, legalizing marijuana is likely to come up. I don't think it moves forward this year. Again, it does not look like there's the votes or that leadership really wants to move that through this year. They think there's still time and lessons to be learned from Colorado and Washington State about how that's going before Vermont moves forward. And, you know, we're not going to be the first, so why rush is sort of the argument at this point. I think with all of the problems with Fairpoint, you might see something come up along those lines. I don't know that there's much the legislature can do, but it's my understanding that Fairpoint does get some subsidies from the state to help with their rural delivering of services. And I would imagine that that could be used as a threat to get Fairpoint back to the bargaining table and to work out a contract with its workers and B, to really improve its game because by all accounts it's a terribly run company in Vermont and elsewhere. You know, the number of complaints, consumer complaints is skyrocketing. People are just not pleased with the service they're getting from Fairpoint. And it's quite possible that the legislature will use whatever leverage it has to force some changes there. Earlier this fall, the coalition of 30 different organizations rolled out the idea of a carbon tax, which was met with resistance from both parties, actually. Sheriff Smith indicated that he probably wouldn't roll it out and certainly the Republicans are saying why would you put a tax on fossil fuels from our major oil dealers and others? Does that have any traction? Traction in the sense that you put an idea out there, you let it sort of fester a little bit and then you can come back to it later after people have sort of digested it a bit. It's not gonna pass. We're not going to see a new carbon tax this year. I would think somewhere down the road, this is an idea that's going to be embraced across the country as we sort of deal with the realities of climate change and a dwindling fossil fuel source and the need to sort of invest in other types of fuel sources and energy sources. But definitely not this year. Both of you guys, you're too sick. That'll be cold, sorry. The legislature in this past November did have a little bit of a shake-up. We saw turnover in 11 races, two in the Senate, nine in the House. Is that sugaring out to appear to have changed the dynamic of the legislature at all? Well, for the first time in however many years, four or six years, the House will not be, will not have a legislative veto-proof authority. Or supermajority as they call it. There are I think over 53 seats now in the House for Republicans. So before the House could jam anything it wanted through with the help of some progressives and independents and then even if the governor didn't like it, they could override that veto. In the Senate, there's still a supermajority. I think they're up to nine seats in the Senate for Republicans. In the grand scheme of things, the Republicans still have very little power. They can use some parliamentary maneuvers to slow things down, but essentially they have no authority or power to stop things that they don't want. It's not like Congress where they can filibuster or... Let's not give them any idea. Yeah, right, exactly. So in the grand scheme of things, yes, they grew and that's good news for Republicans in Vermont. The Republican Party had seen a steady decline and this is sort of reversing the trend. So we'll see if it becomes a long-term trend where they bring more balance to Montpelier, but for all intents and purposes right now, it does very little to impact policy. Josh, the governor pretty much got slapped in the election regardless of what the outcome was. He claims he got the message that he's been humbled by what Vermonters want and saw a lot of the folks who voted against him as a protest vote, probably from his own base. We gonna see a different kind of Peter Shum on this session? Well, he's certainly exhibited signs of what could be considered humility over the past month. Now, whether that will translate into the day-to-day leadership that he exhibits when he's there, especially after January 8th, assuming he is re-elected for a third term, we'll see. I can tell you at a recent press conference, I didn't see much indication of change from him and that he shrugged off questions that were kind of pertinent related to property tax reform and education funding and shrugged off a lot of questions regarding the sink single payer that I think he would just assume to put behind him at this point. So I believe this is really gonna be a different or humble Peter Shumlet, I don't think so. The question is whether or not he's actually going to wield the same measure of power that he had during his last term when he was elected with I think a 68% turnout, or he received 68% of the vote. I don't think that he's going to, he might think he has that same amount of power going into this term, but I don't think that's necessarily going to be the case. Yeah. I just wanna say, I think we won't really know whether there is a humbled Peter Shumlet until we get into the legislative session and we'll see in his budget proposal, we'll see in how he and his administration deal with lawmakers as they inevitably, butt heads over policy. It's one thing to stand up at a press conference. It's hard to change who you are and the governor is a very self-assured man and I guess we'll see how it goes when once they're into the think of the legislative session. Yeah, well with that gentlemen, we've gotta go, but you will see one of us, or two of us at a time, throughout the legislative session, bringing you updates on Capitol Beat, the Vermont Press Bureau here on Orca Media and we appreciate your time today. Joshua Gorman and Neil Goswami of Vermont Press Bureau, thank you for walking us through what could be a very historic session. Thank you. All right.