SPOTLIGHT on the Legislative Session

Children — 22% of our population, 100% of our future

The 2010 State Budget Bites Vermont Children and Families

The 2009 legislative session was dominated by work on the state budget. And it is not over yet. The governor has stated that he will veto the budget passed by the legislature just before it adjourned on May 9th. He has put forward a counter proposal which he wants the legislature to adopt in a special session he has called for June 2nd. Details of the governor’s proposal have just become available and an update will follow, but a quick look shows that the proposal makes additional painful cuts to human services and shifts the significant cost of the teacher’s retirement fund from the general fund to the education fund. If the legislature does not agree with the governor’s proposal and the governor vetoes the FY10 budget as it was passed, the possibilities are:

  • The legislature overrides the governor’s veto and the budget becomes law. They would need a two-thirds majority of the number of members present at the special session. This is a possibility, but is by no means assured.
  • The veto is sustained and there is no passed budget for the fiscal year which begins on July 1, 2009. This is new territory for Vermont, as there has never been a budget veto before. Most likely, there will be intense negotiations to come up with something that both sides could agree on.

Events continue to unfold in the struggle to balance the state’s budget in this challenging time.

Revenue downturns before and during the session meant that, for the most part, advocates for children and youth were faced with defending existing services and programs instead of working toward needed advances in social policy.

Vermont policymakers have not fully acknowledged that the challenges facing the state are the result of falling revenues, not spending. The recession has led to dropping revenue, which has forced hard decisions about cutting services, raising revenue, or both. Before the downturn, policymakers had agreed that our collective resources were being used in ways that reflect good public policy and meet Vermonters’ needs.

Unfortunately, as Vermont’s revenues continue to decline, the response by policymakers has been to implement more budget cuts that threaten to erode essential public structures and have hit hardest those who are already struggling.

Governor Douglas introduced and advocated for a Fiscal Year 2010 budget proposing that the state’s most vulnerable citizens, including low-income children and their families, pay a big price for the economic downturn.
“We must all share the burden”, the governor said in his budget address and this administrative sound bite echoed through the halls of the State House. He proposed to cut all contracted programs and services for children and youth by 4%. The only children’s program he spared was the child care subsidy program, for which he proposed a significant increase (see “Early Childhood Funding” below).

Frail elders, children and adults with disabilities, persons with mental illness and those in need of health care were also not spared in the governor’s proposal. In addition, the governor claimed that local education spending was too high and proposed significant reductions in the general fund transfer to the education fund. The governor refused to consider tax increases – other than the property tax increases that would result from the reduction of the general fund transfer to the education fund.

The FY10 (July 1, 2009-June 30, 2010) budget that was passed by the legislature did include some revenue increases but not enough to prevent serious cuts to essential services. The legislature minimized or stopped some of the worst of the Administration’s proposals. In addition, the federal stimulus – the America Recovery and Reinvestment Act (ARRA) passed and will provide approximately $925-950 million in resources to the state. Certain of the governor’s cuts were stopped because of the criteria of ARRA for obtaining funds. For example, the governor proposed to increase premiums for the Medicaid program, including Dr. Dynasaur, Vermont’s children’s health insurance program. Pursuant to ARRA, no enhanced matching funds would be allotted to our state for Medicaid if policies further limiting eligibility to Medicaid programs were passed. The administration withdrew the premium increase proposals as a result. Though the State Children’s Health Insurance Program was not covered by ARRA rules, it was also spared a premium increase this year.

The House took its responsibility to protect Vermont’s vulnerable citizens seriously. It refused the entire 4% cut to contracted programs and services. In order to protect the education fund it reduced the governor’s seven million dollar increase in the child care subsidy to five million dollars and used general funds and federal stimulus for that increase. It refused to implement draconian Reach Up proposals in order to save money (see “Reach Up” below).

At the last minute, however, in order to fill a 4 million dollar hole, the Senate reinstituted the cut to contracted services at 2%. In Conference Committee the House agreed as long as language was inserted allowing the secretary of human services to use discretion and exempt certain services from the cuts. The final budget bill mandates that the secretary of human services reduce grants and contracts in the amount of $740,000, of which no more than $425,000 shall come from the department for children and families. The secretary is to use the following criteria to determine which grants and contracts are impacted and by how much:

  • (1) the preservation of direct services to Vermonters;
  • (2) the preservation of direct services to vulnerable populations most at risk for negative outcomes, including prioritizing twenty-four hour residential programs and emergency direct services;
  • (3) the minimization of reductions in services currently provided that would result in an increase in the severity of need and a shift in utilization to more invasive, intensive, or expensive services; and
  • (4) the minimization of negative impacts on the stability of community organizations receiving grants and contracts in order to promote a range of services to individuals and families.

The bill mandates that the agency of human services report to the Joint Fiscal Committee at its July 2009 meeting with the grant reduction plan and an explanation for how the plan fits the required priorities. In addition, no later than January 15, 2010, the agency shall report to the House committees on Appropriations and on Human Services and the Senate committees on Appropriations and on Health and Welfare with an updated grant reduction plan and an explanation for how the plan fits the priorities required.

The new language gives the secretary of human services discretion to save some of the contracted services from the 2% cut. However, the money will have to be taken from other programs. Determining which of the vital programs providing services and treatment don’t meet the criteria outlined will be extremely difficult.

Another disturbing trend during the 2009 session was the large amount of policy work done through budget language. Though the Appropriations Committee did request analysis by the Health and Welfare or Human Services Committees when it received proposed budget language that changed policy, toward the end of the session, when time was short, important policy changes were made with little or no public testimony or consideration. For example, a major change in the structure of child care funding was proposed and a change in statute was made the day before the session ended with no public testimony or scrutiny (see “Child Care Subsidy” below).

Reach Up

The legislature refused to implement a proposal strongly recommended by the Commissioner of the Department for Children and Families, Steve Dale, to implement full family sanctions in the Reach Up program. Full family sanctions allow for the termination of the entire family from benefits when the parent fails to meet work participation or other criteria for eligibility. In the 2010 budget debate Commissioner Dale claimed that these sanctions would save the state 1.2 million dollars (money ‘saved’ by terminating children from any source of financial support). Currently in Vermont the family is partially sanctioned in such a situation, with the parent losing their portion of the grant. The Commissioner told legislative committees that he considers full family sanctions good public policy because the program is voluntary and recipients should be terminated if they cannot follow the rules. He agreed that it might mean that some children are put at risk and that the state may have to step in and remove them from the custody of their parent. However, he felt that it was worse for children to exist on a partial TANF payment than to be taken into custody. The House Human Services Committee recommended against full family sanctions.

Commissioner Dale received a more sympathetic response to his proposal in the Senate Appropriations’ Committee and for a time it looked like the Senate would go along with the proposal. The Senate ended up concurring with the House and not implementing full family sanctions.

The worst part of the full family sanction debate, for those of us witnessing it, was the lack of sensitivity and compassion for families struggling during this economic downturn. This was particularly reflected in remarks made in discussions. And it was disturbing that the very state agency charged with caring for our state’s neediest families would think that proposing to terminate a percentage of families for failure to follow the rules would be a good way to force compliance and save money. Reach Up is a ‘voluntary’ program only in the sense that it is most likely the last resort for destitute parents and families with serious challenges who have no other options. It is a tiny amount of money with a few important guarantees, like Medicaid for the children and food stamps and child care subsidy. Most importantly, it protects the children of our most impoverished families from homelessness. We laud the courage of the legislature for holding out under pressure and refusing to implement these sanctions.

Reach Ahead

This innovative program allows Reach Up recipients who find work to stay on the program for one year by receiving food stamps as a supplement to their income. The program helps both the state and the families, as the state can count the Reach Ahead participants as working and is better able to meet work requirements set by the federal government in the Deficit Reduction Act. The Governor proposed not to start up the program. The House overruled that decision in the FY 09 Budget Adjustment Act.

Early Childhood Funding

In spite of all the budget challenges this year, funding for early childhood programs actually saw an increase of close to $5 million increase over last year. This included:

  • Payment for quality rate incentives (paid to providers with higher quality credentials): $2,645,855
  • One-time incentives for STARS, Vermont’s quality rating system: $100,000
  • Credential incentives for staff: $50,000
  • Annualization of the 2000 fee scale eligibility change from FY 2009: $1,654,000
  • Roll-back of the 4% grant reduction proposed by the Governor: $246,346

Thanks to the legislature for maintaining this substantial increase in spite of the sharp drop in available revenue. And thanks to Governor Douglas for his Child Care Initiative, which called for additional funds to improve quality and increase access to affordable child care for low- and moderate-income working families.

Child Care Subsidy Program

Just before the budget bill was finalized, the Department for Children and Families (DCF) proposed sweeping changes to the Child Care Subsidy Program. For part of those changes, DCF sought and was granted legislative authority – through language in the budget bill – to change the way income eligibility is determined at the higher end of the income eligibility scale.

The DCF will be taking extensive public input regarding the impact of the proposed changes on families’ ability to access affordable early care and education services, the quality of those services and programs’ ability to stay afloat financially. It will hold a series of meetings around the state. Here is what DCF says about the proposal:

For years, the basic program has been severely out of date with basic eligibility criteria grounded in the 2000 Federal Poverty Level (FPL) and with basic rates providing access to only 41% of providers. Over a number of years, the Child Development Division has sought to compensate for these shortcomings through special grants and contracts. We need to review the entire system to determine how best to create a more equitable system and one which more uniformly promotes quality, affordability, and access to eligible families.

We have been given approval by the legislature to engage in a full review of the system by early fall and are required to get approval from two legislative committees before proceeding to implement any major changes.

Note, that no changes will occur without the public input process and approval by the Joint Fiscal Committee. This proposal does not increase the amount of funding in the subsidy program, so any additional payment that goes to providers will have to come from funds used to pay providers in another part of the system.

The DCF’s website has a description of the proposal and a place to give input. A schedule of the meetings will be posted soon.

Voices and the Kids Are Priority One Coalition are collecting information about the impact of these proposed changes and will monitor the public input. We will do all we can to make sure any changes made will fulfill the stated goals.

Increasing Accountability and Transparency

The ability of a small group of legislators to make far-reaching decisions with minimal public input raised concerns about fairness and transparency. We saw the problem first-hand with the Joint Fiscal Committee’s decision in December, 2008, before the start of the legislative session, to make significant cuts to the current budget. Decisions were made quickly, by the ten legislators on the Committee, with little chance for public input and without the full legislature able to vote.

The legislature has attempted to improve the decision-making process by passing H. 75. Current law requires that if revenues drop when the legislature is not in session, the Governor must get approval from the Joint Fiscal Committee before cutting the current state budget by 1% or more. H. 75 would require the Joint Fiscal Committee to have public hearings and provide an opportunity for public comment before making a decision. The committee could not reduce state spending in any particular area by more than 4% of the amount budgeted. For reductions over 4% of the amount budgeted, the full legislature would have to come back in session to make those changes.

The Governor has expressed doubts about the bill and it is not clear that he will sign it.

Public Funding for Pre-School (Act 62)

There was a flurry of unanticipated activity late in the legislative session aimed at removing the provision in Act 62 which caps the number of preschool students a school district can count in their student count. The cap, which many advocates oppose, limits the number of 3- and 4-year olds who can access quality early education services that are supported by public education dollars. During the final weeks of the session, an amendment calling for elimination of the cap was added to a bill aimed at reducing high school drop-out rates (see S.136 in “Other Bills” below). The cap language was then removed from S. 136 when legislators determined that the controversial nature of the amendment might hurt the bill’s chances of becoming law. Also removed from S. 136 were proposed changes in language governing requirements for licensed teachers at pre-k programs. Requirements for licensed teachers remain unchanged.

Other Bills Affecting Children and Families

S.109 (became part of H.444) – Toxic Flame Retardants
Passed as part of a larger health care bill in the House, S.109 bans toxic flame retardants in mattresses, upholstered furniture, TVs, and computers, and requires the use of safer and equally effective alternatives.

Toxic flame retardants, known as polybrominated diphenyl ethers (PBDEs), are widespread environmental contaminants that build up in the body, and have been linked to cancer, liver damage, and other serious health effects. As a member of the Alliance for a Clean and Healthy Vermont, Voices supported the work of VPIRG and other allies including the Professional Fire Fighters of Vermont and Planned Parenthood of Northern New England to successfully pass S.109.

S. 136 sets a goal for the Department of Education to increase graduation rates in Vermont schools to 100 percent by 2020.

Failure to graduate from high school is associated with many adverse life outcomes. Young people who drop out of school are more likely than their peers who graduate to be unemployed, suffer from health problems, live in poverty, risk incarceration, and be single parents. Often, for the majority of young people who drop out, it is not a sudden decision but a gradual process that is the result of complex challenges and circumstances. S. 136 is designed with this in mind and promotes a variety of strategies across age and need. The legislation:

  • • strengthens and expands Vermont’s educational support team and supplemental reading instruction programs for students identified at risk based on indicators such as academic progress, attendance, poverty;
  • • allows participation of enrolled students in the high school completion program that formerly served only students who had dropped out;
  • • promotes flexible practices and programs for elementary and secondary students in need of support to succeed in school;
  • • requires the development of comprehensive model truancy protocols and adoption of district-wide truancy policies consistent with model protocols; and
  • • requires the development of a uniform definition and measure of a high school completion rate and the setting benchmarks for assessing the performance of individual schools in meeting the goal of 100% high school completion.

S. 136 passed with strong support of Voices.

H.147 (passed by House)

This highway safety bill passed the House and will be taken up by the Senate next year. It prohibits an operator with a junior operator’s license from operating a motor vehicle between 1:00 a.m. and 5:00 a.m., with some exceptions. It also prohibits an operator with a learner’s permit or junior operator’s license from using a wireless telephone or handheld electronic device while operating a motor vehicle on the traveled portion of a highway. It provides for hands-free use of a wireless telephone or electronic communication devices by an operator while operating a motor vehicle on the traveled portion of the highway. It also provides for primary enforcement of the safety belt law, meaning that a driver can be stopped and ticketed for the sole violation of failure to wear their safety belt. Under current law a person who neglects to wear their safety belt can be ticketed only if they are stopped for another violation.

Child Nutrition Bills (yet to leave committee)
Three child nutrition bills were introduced this year, two in the House and one in the Senate. Though hearings on the bills were held in the House Human Services Committee and the Senate Health and Welfare Committee, the nutrition bills remain in the committees.

a. H.311 will increase funding to three separate child nutrition programs. The Simplified Summer Food Program would receive a small increase from the state for the cost of each breakfast and lunch (estimated cost is $25,000). The Child and Adult Care Food Program would receive a supplement from the state for the cost of snacks (estimated cost is $100,000). The School Lunch Program would be supplemented in order to provide free lunch to all low income students (estimated cost is $352,000). The total estimated cost for this bill is $477,000.

b. H. 408 will implement all federal options allowable within 3Squares VT, the new Food Stamp Program. The gross income limit for Food Stamp Program eligibility will be raised from 130% of the federal poverty line to 185%. In addition, the bill would eliminate the asset test for the food stamp program. It is estimated that up to 30,000 more Vermonters would become eligible as a result of these changes. Because food stamps are entirely federally funded the changes would bring in millions of additional federal dollars at minimal cost to the state.

H. 408 would also require 21st Century Community Learning Center programs (grant funded after school and summer programs) to provide after school snacks to participants through a federal child nutrition program available and underused in the state. The bill requires all schools with more than 50% low income enrollment with an existing summer program to provide federally funded meals to program participants throughout the duration of the program. The bill also calls for increasing the frequency that children receiving 3SquaresVT are directly certified for free meals to a monthly basis. Direct certification means that students are not required to fill out a separate application for school meals if their family receives 3SquaresVT. Now it is done only once a year, in July. Monthly certification means that a child whose family becomes eligible over the course of the year will be certified.

c. S. 118 in an omnibus bill that combines all of the elements of H. 311 and H. 408.

H. 382: An act relating to absence from work for health care and safety (yet to leave committee)
This bill proposes to ensure that all workers in Vermont are able to take care of their own health and safety needs, and those of their families, by allowing employees to accrue a maximum number of paid hours annually (56 hours for a full-time employee) so that workers can take paid time from work to address issues related to health care or safety for themselves or a family member. The bill was not brought up in committee this session. Voices will work hard next session to obtain passage of this important legislation.

For a list of other bills introduced in 2009 that would affect children and families, click here.

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