February 18, 2011 – Week 7

As part of the third annual Employer Day at the Statehouse, employers met with legislators and administration officials to talk about the impacts their decisions have on employers’ ability to create and retain jobs. In a joint hearing of the Senate Economic Development and House Commerce Committees, employers explained the need for predictability and consistency so that they have a solid foundation on which to create jobs. Jeff Beer, co-owner of Select Design in Burlington and Chair of the Chamber Board, explained that employers don’t have the ability to continually raise their prices and that while he loves Vermont, being here can’t be a competitive disadvantage. He asked legislators to always keep in mind that these days, businesses need to be able to compete with companies in New York or Shanghai.

The health care reform proposal under consideration also drew a number of comments from employers. Chamber Board Member Sara Byers of Leonardo’s Pizza told the committees that when they talk about removing the burden of health care from employers, it’s not shopping for insurance or administering the benefit that is the problem, it’s the cost. “If you’re going to remove the burden from employers, you need to remove the cost.” In response to the concerns raised, Senator Vince Illuzzi (R-Essex/Orleans Co.) indicated that his committee has made it clear to the Senate Health and Welfare Committee that they would like to review the health reform bill from the employer perspective. He added that he’s heard the message loud and clear that ERISA employers need to be able to continue to operate their health insurance plans.

The House Commerce Committee, which is currently working on Governor Shumlin’s Jobs Bill, was interested in what kind of programs and incentives would be useful to the employers present. Byers indicated that while she hasn’t taken advantage of the state’s Vermont Employment Growth Incentive (VEGI), she was glad that Dealer.com accessed the incentive and that not only will their 400 jobs stay here because of it but that they plan to double their workforce here. For Byers it means that many more people will buy her pizza. Beer also clarified that VEGI is an earned credit and it’s not free money, telling committee members “we don’t need an incentive to want to grow, but sometimes an incentive can help us do it faster.”

Governor Shumlin, Lieutenant Governor Scott, Senate President Pro Tem John Campbell, and House Assistant Majority Leader Willem Jewett also took the time to address the more than 150 employers who made the trip to Montpelier. They all emphasized their hope that employers would be a part of the process as Vermont tackles some big issues like health care and tax reform. Our organizations wish to thank these officials as well as the members of the House Commerce and Senate Economic Development Committees and legislators for the time they spent with our member businesses.

The House Commerce Committee spent long hours combing through language for the Jobs Bill. Several regional development corporations expressed support for the development of a long-range economic development plan for the state. They recommended using the public outreach efforts conducted by groups such as the Commission on the Future of Economic Development and the Future of Vermont as well as the strategic plans generated by the state’s 12 regional development corporations.

Governor Shumlin’s Health Care Reform proposal received much attention on Employer Day. Banking, Insurance, Securities and Health Care Administration Commissioner Steve Kimbell, told employers that the administration is open to new ideas and asked employers to be a part of the process, cautioning them that Vermont’s current health care spending is unsustainable. Meanwhile, the House Health Care Committee continued their work on the bill, H. 202, with Chair Mark Larson (D-Burlington) noting that the committee had to make decisions in order to complete their work on the bill by the week after Town Meeting Day. The Committee also heard testimony from both the Vermont Grocers’ Association and the Vermont Retailers’ Association. The Retailers asked the committee to exempt ERISA employers from any single payer plan since these companies would have to administer a different plan in Vermont than for their operations in other states.

The House Natural Resources Committee released a new draft of their renewable energy bill, H.56. The bill includes three provisions that could raise rates for electric customers: a new standard offer for additional solar power projects, an expansion of the state’s net-metering program, and a renewable portfolio standard that would require utilities to purchase in-state biomass electric generation. The solar provision may be broadened to include other types of renewable energy projects. During the Committee’s consideration of the bill, representatives for Green Mountain Power indicated that the biomass provision in the bill alone could mean a 2.5% rate increase.

In a continued effort to raise awareness about the effect of internet sales on our brick and mortar retailers, Chamber Board member Mike Trombley of Advance Music testified about the difficulty of competing with on-line vendors. Trombley described an almost daily occurrence where customers come in to get information about a musical instrument and then buy the product online due to the state’s sales tax.  We must find a solution to level the playing field to ensure that shopping on Vermont’s Main Streets remains attractive to customers.  It is estimated Vermont loses between $30-40 million in revenue due to sales occurring over the internet by sellers that do not collect a sales tax. H.143 and S.54 are bills requiring businesses that sell items subject to the sales and use tax via independent contractors located within Vermont to collect the sales tax.

S.53 would lift the cap on the number of prekindergarten pupils counted in a school district’s average daily membership (ADM). The School Boards and Superintendents Associations support S.53 because it eliminates the complexities and potential liabilities involved in managing a cap and deciding which children will and won’t get services. The bill continues to leave preK as an optional service, so each district can decide whether to provide services. It is believed the cost impact of S.53 on public education would be limited and gradual. Department of Education records indicate that only 40 prekindergarten students were served statewide in FY2011 that were not counted in a district’s ADM as a result of the cap. The bill does not amend existing law that requires a comprehensive needs assessment in any district that is considering starting or expanding a prekindergarten program. School districts remain under pressure to control overall spending, and when local boards contemplate adding any service, including prekindergarten, they must consider the costs in the context of the whole school budget and local education tax rates. Governor Shumlin expressed his support for repealing the prekindergarten ADM caps in his budget address.

Several Committees with jurisdiction over water quality issues watched a documentary “Bloom” which focuses on algae problems in Lake Champlain. The reaction from legislators was one of frustration. Rep. Deen (D-Westminster), Chair of the House Fish and Wildlife Committee, cited the need for additional federal resources to solve the problems associated with urban and agricultural runoff and wastewater treatment. “We are letting the feds get away with not providing the tools we need to address the problem.” Chris Recchia, Deputy Secretary for the Agency of Natural Resources, echoed that our choices of investment are not where they need to be at the federal level.

Testimony on bills (S.29 and H.97) that would unionize early child care providers was taken in the House Human Services Committee. Many child care centers such as the YMCA and Burlington Boys and Girls Club are opposed to this proposal as it would divert already limited resources that they feel should be used for child care services to union dues and a national collective bargaining unit. Mary Burns and Mary Alice McKenzie with the above organizations both questioned the wisdom of the bill believing that it would do nothing to improve standards or incentives for better care or training of workers.

One of the tools that municipalities can use to pay for infrastructure is tax increment financing (TIF). Officials from seven communities provided testimony to the Senate Economic Development Committee about the importance of TIFs to Vermont’s economic recovery and in stimulating redevelopment in underutilized downtowns. Several amendments are needed including providing for more TIFs to be established; allowing municipalities to incur debt at any time within a 20 year life of a TIF; and clarifying the use of TIF revenues for services or commodities that replace the need to construct new infrastructure. There is not a bill number for these amendments as yet.

The House General, Housing and Military Affairs Committee continues to work on two bills of potential interest to our members. H. 42, An Act Relating to Employment Decisions Based on Credit Information would disallow most businesses from conducting a credit check on an employee as part of the hiring process. H.41, An Act Relating to Employment Breaks would require employers to provide employees with paid or unpaid breaks of at least 30 minutes for each six hours worked. More importantly, the bill would require that said breaks occur at least two hours after the beginning of work and at least two hours prior to the end of that employee’s shift. Committee Chair Representative Helen Head (D-South Burlington) has indicated an interest in hearing from businesses on both bills. If you have thoughts on either bill or would like an opportunity to speak with the Committee, please contact Cathy Davis at cathy@vermont.org.

Cultivating Prosperity is the Chamber and GBIC's publication featuring Vermont companies talking about how we can create jobs and provide opportunities for Vermonters. Our newest profile is now online. Click here to see why life is sweet at Rhino Foods and what owner Ted Castle has to say about running a business in Vermont.

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