NE Legislatures Adjourn After a Tough Fiscal Year

Though New England state revenues have rebounded slightly during FY 2012, the states held the line on new spending for FY 2013 and, in some cases, made further cuts. The outlook for future state spending is uncertain as the economy continues to grow at a sluggish pace, and national and state elections signal new challenges.

CONNECTICUT

The Connecticut General Assembly adjourned on May 9 after approving a $20.5 billion budget for FY 2013 that increases spending by $143 million. Despite the passage of controversial tax increases of $1.6 billion for FY 2012 and assurances from Gov. Dannel P. Malloy that he would not borrow to cover state operating expenses, the governor and legislative leaders agreed to address a growing deficit by borrowing funds previously dedicated to paying down the state’s debt.

While revenues have increased, they have not lived up to projections. According to fiscal analysts, state revenue projections for FY 2012 were off by more than $200 million and are now predicted to fall short of projections for FY 2013 and FY 2014 by over $300 million.

State Treasurer Denise Nappier advised state officials that a portion of the state’s operating expenses for FY 2012 were covered by transferring funds from capital project accounts to cover operating expenses in January, March, April and June. Connecticut has a common cash pool, which includes tax revenues, federal grants, license and fee receipts and borrowed funds. The treasurer can make temporary transfers when fiscal challenges arise where expenses exceed operating funds.

Funds in the pool have steadily declined over the past 12 months. Nappier has indicated her willingness to keep legislators updated on the state’s cash-flow situation. A recent report noted that state workers’ benefits are also part of the common cash pool used to cover operating expenses.

The budget as passed:

• Increases education spending by $50 million;
• Provides $7.5 million for the Commissioner’s Network of Schools, a vehicle to raise academic achievement in low-performing schools (Malloy originally proposed $22 million);
• Provides seed money for a “Connecticut Made” program;
• Creates a state housing office within the Department of Economic and Community Development to promote affordable housing;
• Restores funding for scholarships for Connecticut students attending Connecticut private institutions and adds an additional $1.2 million (Malloy originally proposed eliminating scholarships for schools with endowments of $200 million or more);
• Restores all funding for arts programs (Malloy originally proposed all art groups apply for funding out of a pot of $14 million); and
• Borrows $30 million from state bond package to be used for road repairs in the state program Town Aid Road.

Among session highlights:

• Passage of an education reform package to address Connecticut’s highest-in-the-nation achievement gap. According to the U.S. Department of Education, scores show that on national science tests, the achievement gap between low-income Connecticut students and non low-income students continues to be the largest in the nation. The gap between black and Hispanic students and their white peers is also one of the worst in the country;
• Repeal of the death penalty making Connecticut the 17^th state to take such action;
• Ends remedial education at Connecticut’s community colleges in its current form;
• Legalizes use of marijuana for medical purposes making Connecticut the 17^th state to take similar action;
• Repeal of Blue Laws to allow liquor to be sold on Sundays and holidays; and
• Passage of bill that will allow Connecticut residents to register and vote on the same day.

K-12 Reform Malloy and the General Assembly made significant strides in addressing Connecticut’s worst–in–the-nation achievement gap by passing sweeping education reform legislation.

Key provisions include:

• Funding $7.5 million for the commissioner of education to select and work with 25 low-performing school districts on turnaround plans;
• Funding for 1,000 new seats in school-readiness programs with 500 spaces located in the 10 school districts with the lowest academic achievement;
• Creating intensive early reading program for K-3 to improve literacy;
• Increasing funding for charter schools;
• Increasing Education Cost Sharing Grants by $50 million; and
• Requiring school superintendents to use annual evaluations of teachers and administrators in granting  tenure. Teachers, administrators can be terminated as a result of poor evaluations and/or if they fail to complete a teacher remediation plan. A pilot program of the new evaluation process will be set up in eight to 10 school districts.

In Higher Ed … Remedying Remedial? Responding to a rising tide of concerns regarding the cost and effectiveness of remedial education, the General Assembly’s Higher Education and Employment Advancement Committee sponsored legislation to end remedial education in its current form. According to the Connecticut Board of Regents for Higher Education, 70% of Connecticut students entering Connecticut’s Community Colleges are enrolled in at least remedial class. And 18% of students entering the Connecticut State Universities are enrolled in a remedial class. In signing the bill, Malloy said, “We do a disservice to our college students when we burn through their financial aid to pay for remedial learning which doesn’t fulfill graduation requirements.”

Beginning in fall 2014, community college and state university students can take college-level, credit-bearing courses with “embedded” remedial help for those who need it. That could mean an additional skills class, a lab or tutoring. The bill also requires colleges to improve the process for evaluating which students need remedial courses. Currently, the sole evaluation criteria are standardized test scores.

Transfer and Articulation The Higher Education and Employment Advancement Committee also sponsored legislation to create a fundamental set of General Education courses of at least 30 credits that would be accepted at Connecticut community colleges, CSUS and the University of Connecticut. Such action would give students the ability to transfer from one institution to another without duplicating similar courses. This would save money and expedite degree completion. Core courses would be developed and implemented by July 1, 2013. The bill received broad support from the Connecticut Board of Regents for Higher Education and administrators and faculty from Connecticut’s public colleges and universities.

Sexual Violence on College Campuses Requires public and private colleges and universities to adopt and disclose one or more policies on sexual assault and intimate partner violence. Policies must provide information to students about what to do if they are victims, as well as disciplinary procedures and penalties.

Session Casualties: Minimum Wage and GAAP Legislation to raise the minimum wage by 50 cents per hour over a two-year period failed. The measure was passed by the House but never taken up in the Senate. To help address the budget shortfall, Malloy was forced to abandon his campaign promise to convert the current system of accounting in the state to the more transparent system called Generally Accepted Accounting Principles or GAAP.  The conversion would have required a downpayment of $75 million as well as holding millions more in a reserve fund that would be used to pay bills in the same year that they are due instead of using accounting gimmicks to push payments into future years.

The Special Session Following a marathon budget session to finalize adjustments in the FY 2013 budget, the General Assembly held a special session on June 12 to implement the budget bill. Lawmakers also took up a number of legislative initiatives that were not addressed in the regular session. Among them, the General Assembly raised the ceiling for participation in the Small Business Express Program to employers with 100 or fewer employees, up from 50 or fewer employees. The change means an estimated 3,600 additional businesses will now qualify for Express loans and grants.

Lawmakers also created a new program, the Unemployed Armed Forces Member STEP-UP  (Subsidized Training and Employment Program) to provide grants to businesses to subsidize the cost of hiring unemployed veterans during their first 180 days on the job. The state will authorizes $10 million in bonds for the program, with $5 million available now and the balance available in FY 2014.

They created two new programs, “Connecticut Made” and “Connecticut Treasures,” to promote products made in Connecticut and promote the state’s cultural, educational and historic attractions.

And they sought to relocate overseas jobs to Connecticut through the “First Five Program” providing assistance to businesses in the form of loans, tax incentives and others that create jobs and invest capital within a certain timeframe.

They approved the merger of Connecticut Innovations with Connecticut Development Authority, stimulating new businesses with a one-stop quasi-public agency that will invest in new economic development.

MAINE

The Maine Legislature concluded its 125^th session after addressing a major hole in the state’s two-year, $6 billion budget. How? The state eliminated about 24,000 low-income parents and 19- and 20-year-olds from MaineCare, the state’s Medicaid program. Cuts were made to Head Start, family planning programs and home health care visits, In addition, 1,500 low-income elderly and disabled people were eliminated from a prescription drug assistance program.

Legislators rejected Gov. Paul LePage’s proposal to limit housing assistance to 90 days and to reduce general assistance by half to those currently receiving Temporary Assistance for Needy Families Assistance/TANFA. Instead, a legislative compromise was reached to cap housing assistance at nine months and reduce the maximum benefit in general assistance by 10%.

The budget also reduced the income tax on pensions and cut taxes for active duty members of the military.

In a rebuke to the governor, the Republican-controlled legislature overrode his veto and restored services for medically needy students through MaineCare. The override vote was bipartisan with a 35-0 vote in the Senate and a 124-16 majority in the House. Legislators restored the governor’s cuts of $4.2 million from the Fund for a Healthy Maine and most of the $2.4 million in cuts proposed to the University of Maine System, Maine Community College System and Maine Maritime Academy. Legislators also restored $1.7 million to the Maine Public Broadcasting Network.

Lawmakers approved four of five bond proposals that will now go before voters. The governor’s veto of a fifth bond, a $20 million research and development proposal was upheld by the Legislature.

Workers Compensation Rolled Back While Maine’s business community lauded the session as productive, labor unions accused legislators of putting a further squeeze on middle-income workers and siding with insurance companies as they stripped away benefits for injured workers and restricted workers’ rights. For example, lawmakers:

• Approved changes in unemployment insurance, including delaying benefits for newly laid-off workers until most of their vacation pay has been used up;
• Set a 10-year cap on benefits for workers compensation for both partially and permanently impaired;
• Eliminated workers’ rights to unionize at a Turner-based egg farm, formerly known as DeCoster, and it’s subsidiaries; and
• Eliminated collective-bargaining rights for private child-care providers who receive state subsidies.

The Legislature also:

• Eliminated a “matching funds” section of Maine’s public campaign finance law;
• Gave permission to state workers to store concealed weapons in their locked vehicles while at work (those working at private companies are already covered); and
• Merged state departments of Agriculture, Conservation and Forestry.

K-12 Education In education, the Maine Legislature:

• Required school districts to establish comprehensive performance evaluations for teachers and principals, which must incorporate student learning and growth data.
• Ordered that personnel decisions made by school districts be based on the evaluations and effectiveness.
• Required that high schools, beginning in 2017, award diplomas based on demonstrated proficiency in subjects and skills, not on course credits or years spent in school
• Provided incentive for teachers to achieve national certification by the National Board for Professional Teaching Standards. Restores a $3,000 stipend to incentivize teachers to participate in a pre-eminent national certification program funded through fees collected by Maine Dept. of Education for teacher recertification (Legislature overrode Governor’s veto).
• Amended Educational Opportunity Tax Credit by limiting refund of the tax credit to program participants who earn associate or bachelor’s degree in STEM fields.
• Prohibited bullying, cyber-bullying in schools and required school districts to develop policies, procedures for victims. Incidents must be reported to Maine Department of Education.

In Higher Ed, Pluses, Minuses The Maine Legislature cut 1% from Maine’s public higher education system: $1.7 million to University of Maine System, $554,000 to community college system, and $86,000 to Maine Maritime Academy. The Legislature approved bonds of $8 million for University of Maine Animal Health Lab; $3 million for Mane Community College System Expansion; and $500,00 for Maine Maritime Academy. Voters will weigh in on the bond proposals in November.

MASSACHUSETTS

Gov. Deval Patrick signed a $32.5 billion budget for FY13, which represents a 4% increase over FY 2012. The budget continues to support K-12 education at record levels and makes adjustments to the state’s community colleges intended to strengthen their role in workforce development and job creation.

The supplemental budget, which was filed along with the state budget for FY13, contains $20 million for the August Sales Tax Holiday, which has been popular with the state’s consumers.

The Massachusetts Legislature adjourned its session on July 31—a session that began 19 months earlier in January 2011. In the final days of the session, lawmakers passed a health care cost containment bill designed to save $200 billion over the next 15 years and approved a “three strikes” sentencing bill, which will eliminate parole for three-time violent felons. Earlier in the session, the governor signed legislation legalizing casino gambling.

Casino Gambling Makes its Debut After signing legislation in November of 2011, which legalizes casino gambling in Massachusetts, Patrick inked a compact with the Mashpee Wampanoag Tribe Commission on July 31, 2012, to develop a resort casino in the City of Taunton on 146 acres of land near the junction of Routes 24 and 140. The $500 million complex will be built over five years and will include three 300-room hotels, retail shops, conference facilities and a water park. The Compact is in effect for 15 years. At the end of the 15 years, the agreement is automatically renewed unless either party serves notice for modification or nonrenewal.

The tribe, which is landless, must gain federal approval to have land put into a federal trust, which could take several years. If successful, the tribe will pay 21.5% of its gaming revenue to the Commonwealth. This is the highest figure to be negotiated between a state and a Native American Tribe.

Healthcare Cost Containment After months of deliberation, lawmakers approved and Patrick signed a healthcare cost containment law making Massachusetts the first state in the nation to establish measures to limit the future growth of healthcare costs. Specifically, the law limits growth of healthcare costs to the growth of the rest of the state’s economy, which is currently 3.7%. The rate of growth of healthcare costs is nearly double that. To help contain costs, the bill would among other things, shift government health insurance programs for state employees and the poor to alternative payment systems that reward outcomes and reduce costs.

This legislation was introduced earlier in the session and builds on the law passed in 2006. Containing costs has been the focus of lawmakers who filed the final 350-page bill on the evening of July 30, the day before the session adjourned, leaving legislators with little time to review the 300 sections of the bill. The law:

• Establishes accountable care organizations, which will create a vehicle for transitioning from paying doctors for individual tests and/or procedures to a system which focuses on the patient’s overall health;
• Expands the role of physician assistants and nurse practitioners to act as primary care providers to guarantee access to more affordable care;
• Establishes the Prevention and Wellness Trust to stem chronic illnesses such as diabetes, asthma, and heart disease that are fueling the growth of medical costs. The $60 million earmarked over the next four years for the trust, will be paid for by a tax on insurers and an assessment on some larger hospitals; and
• Sets spending targets for hospitals, doctors and applies penalties for those that exceed the targets.

Economic Development Package The Legislature passed a package providing millions of dollars to retrain unemployed workers, establish a $50 million fund to help colleges and universities support research and development of new technologies and products, provide tax exemptions for new startup businesses, gives consumers a sales tax holiday for two days in August and authorize a $5 million Workforce Competitive Trust Fund to support a training program that will address the “skills gap.” Patrick was expected to sign the bill.

Clean Energy Signed Into Law A major provision of the law extends long-term contracts with utility companies and renewable-energy companies, which will ultimately achieve cost savings for ratepayers by keeping the supply of renewable energy credits in balance with the growing demand. The law also extends participation in the Regional Greenhouse Gas Initiative, an agreement among the states of Connecticut, Delaware, Maine, Maryland, Massachusetts, New Hampshire, New York, Rhode Island and Vermont to reduce green house gases.

Auto Repair Bill Finally Passes After years of languishing in the Legislature, an auto repair bill passed, which will give auto repair shops access to codes stored in a car’s computer system. Automobile manufacturers agreed to provide access to those codes which are needed for repairs, but manufacturers also reserve the right to protect codes that are associated with the manufacturer’s intellectual property.

$1.4 Billion Transportation Bill Approved The House and Senate passed a $1.4 billion transportation bond bill which is expected to create jobs by providing funds for hundreds of road and bridge improvement projects throughout the Commonwealth. The bill was awaiting the governor’s signature.

Overhaul of Children In Need of Services System The Legislature passed and sent the governor a bill overhauling the state’s Children in Need of Services (CHINS), putting prevention before punishment in dealing with runaways, truants and children who habitually get into trouble. The legislation breaks down barriers between the juvenile court, parents and the community, and it creates a second access point for children to receive necessary services. It establishes a statewide network of family resource centers to provide community-based intervention and promote school and local resources for both the children in need and their families.

K-12 Education Education aid for the Commonwealth’s school districts was increased by $180 million for total funding of $4.2 billion. Reimbursements through the Special Education Circuit Breaker Programs were increased by $18.8 million with total funding of $28.8 million, which will allow school districts to be reimbursed for close to the 75% reimbursement, as provided for in state law. The budget also maintains funding for achievement gap programs in Gateway Cities that focus on career success and English language learning.

Massachusetts Teachers Change Seniority The Massachusetts Teachers Association, the largest teachers union in the state, agreed to give up some seniority rights in exchange for an education advocacy’s group’s consent to drop its plan to put a more extensive proposal on the ballot. The legislation, which puts performance before seniority in determining teacher layoffs, is a compromise between the union and Stand for Children, an advocacy group. The bill also provides $13 million to put a new evaluation process in place in the Commonwealth’s school districts. The new evaluation process will begin in 2016 to guide staff reductions and reorganization.

Higher Education Despite a slight increase in total funding for public higher education in the FY 2013 budget, campus budgets were level-funded. According to the Massachusetts Budget and Policy Center, FY 2013 funding still represents an inflation-adjusted cut of around 13% from pre-fiscal crisis levels of FY 2009. Cuts are even deeper when looked at over a longer time, with FY 2013 funding proposals representing a 30% cut from FY 2001. Most of the increase for FY 2013—$49.1 million of it—funds collective bargaining agreements that cover each of the campuses.

Beginning in FY 2012, all campuses of public higher education began retaining tuition payments from out-of-state students, Previously, tuition payments went to the state’s general fund. Tuition rates continue to rise as state appropriations continue to decline.

Law School Gets Green Light The University of Massachusetts Dartmouth received preliminary accreditation from the American Bar Association (ABA), which allows student from the two-year-old UMass School of Law to take the bar exam in any state. To become fully accredited, the school will follow ABA guidelines for the next three years.

Centralizing Community College Control Patrick’s controversial plan to centralize control over community colleges was adopted with minor changes. The governor and the Massachusetts Department of Higher Education will have more say about the state’s two-year colleges. More specifically:

• The governor will appoint the chair of the board of trustees for each of the nine community colleges.
• The chair will be selected from the region where the community college is located.
• The commissioner of higher education, the presidents of the community colleges and representatives of the Massachusetts Teachers Association, will develop a funding formula for the campuses based partly on performance data.
• An “office of coordination” will allow the commissioner to better coordinate workforce training and to establish a clearinghouse for all training opportunities provided by public higher education institutions. Funding of $400,000 will be provided for this office.
• A competitive grant program of $2.3 million will be developed for community colleges, partly to establish worker-training programs within three months of a request by an employer.

NEW HAMPSHIRE

At the end of the first year of the biennium, revenues in New Hampshire were $26.6 million short of projections. Gov. John Lynch indicated he will use a net surplus of $11 million from FY 2011 to reduce the shortfall to approximately $14 million.  On paper, the budget for the two-year cycle (FY2012 and FY2013) is balanced, but a closer look at the second year of the biennium reveals hurdles.

One area in question is a projected $16 million savings from the conversion of Medicaid health insurance to the newly created New Hampshire Medicaid Managed Care program. Lawmakers now admit the savings may not be there since implementation of the new program won’t start until January 2013.  The new program has yet to get final clearance from the Center for Medicaid Services, a federal agency that administers Medicare and Medicaid programs.

A myriad of issues involving Medicaid reimbursements continues. New Hampshire owes the federal government a payment of $9 million in penalties arising from a 2002 federal audit of the state’s Medicaid reimbursements. Also, the battle lines have been drawn with state officials insisting acute care hospitals owe New Hampshire $24.5 million under the Medicaid Enhancement Tax while 10 New Hampshire acute care hospitals have filed a suit against the state regarding Medicaid reimbursement rates and the cut in the disproportionate share program, which helps hospitals address the cost of uncompensated care. The state has asked for a waiver, but hospitals are adamant and have asked the Center for Medicaid Services to reject the state’s request.

State Revenues Revenues reveal a mixed picture. Lottery revenues and most of the sin taxes have consistently come in below projections. Business taxes have come in higher than expected. Last year, lawmakers cut the tax on a pack of cigarettes by 10 cents despite warnings that revenues would go down. In the end, the cut cost the state $12 million in revenue.

Among session highlights, New Hampshire legislators reached a compromise in which the Granite State will remain a member of the nine-state Regional Greenhouse Gas Initiative, but may withdraw from the pact if one or more states decide to withdraw. Under the pact, quarterly auctions are held to determine how much carbon dioxide can be emitted from power plants. Owners of the plants pay for every ton emitted which provides an incentive to reduce emissions. Money from the auction is returned to the states.

Lawmakers originally proposed withdrawing from the carbon-reduction agreement. The law will now direct auction revenues to the state’s Public Utility Commission for energy-efficiency programs and to return some of the revenue to ratepayers in the form of rebates.

Lawmakers Override Gov’s Vetoes A protracted battle between Republican lawmakers and Democratic Gov. John Lynch over controversial measures dominated the legislative agenda.

Lawmakers overrode Lynch’s veto of a bill which now requires that New Hampshire voters must present photo identification when voting. Supporters say this will protect the integrity of the voting process, while opponents point out there is no history of voter fraud in the state. The law must pass muster with the U.S. Department of Justice, which has blocked similar laws in South Carolina and Texas.

They also overrode Lynch’s veto of a bill that would provide a tax credit for business organizations and enterprises that contribute to nonprofit scholarship organizations that award scholarships up to $2,500 to parents in selecting a K-12 private school. Corporations who contribute would receive 85% of their donation as a tax credit, which can be applied to the corporation’s business tax.

They overrode Lynch’s veto of a bill that provides that plaintiffs in a medical malpractice case will have the option of avoiding a trial by accepting a settlement from the medical provider. Should the settlement offer be rejected, the plaintiff could still go to trial but would have to pay the medical provider’s attorney even if the plaintiff wins and the verdict was less than 125% of the settlement offer.

And they overrode his veto of a bill banning late-term abortions. The new law requires that any physician who performs a late-term abortion that is deemed medically necessary, will need to have the decision confirmed by a second physician who is not affiliated in any way with the primary or first physician.

No Change in K-12 Education Funding After years of wrangling, legislative leaders agreed to compromise on the education funding formula. However, legislators rejected the compromise. The New Hampshire State Senate approved the compromise by a vote of 17-6, but the House could not come up with the three-fifths majority needed to approve an amendment to the state constitution.  Had the bill been approved, control of education funding would have shifted from the courts to the Legislature. Local educators breathed a sigh of relief with the courts slated to maintain control over education funding. Democrats who opposed the compromise bill said they were concerned that many legislators would not adequately fund education. The Claremont rulings of 2006, called for the state Supreme Court to require that the state provide more funding to districts and reserved the right to oversee the Legislature’s decisions on funding levels and education standards.

Higher Education The University System of New Hampshire (USNH) survived another attack as legislators rejected a proposal to eliminate the chancellor’s office and staff and replace them with a volunteer chair of the USNH. The bill was purported to reduce the cost of public higher education but opponents noted that under the bill, costs would actually rise as services that are now consolidated under a system office would have to be replicated on every campus in the system.

USNH Employees Reduce Health Care Costs One of the largest operating expenses for the USNH is health care costs—projected to total about $66 million in 2012. To reduce costs and bring about greater efficiencies, university officials are pursuing new initiatives. In 2012, USNH switched to self-insurance, which means that instead of employees paying a premium to the insurance company, the USNH pays the medical claims of employees which saves administrative costs.  Harvard Pilgrim Healthcare still processes medical claims.

Tandem Health Advantage is now available to USNH employees. Tandem provides a shopping center, where employees with the assistance of Tandem can shop for the same service offered by lower-cost providers. Employees receive rewards for the amount saved using a lower-cost provider. As an example, one employee saved $1,700 on a CT Scan, which resulted in a $200 reward to the employee. The Tandem partnership also engaged in educating employees in wellness programs as a way of reducing health care costs.

USNH and Community Colleges Agree to Increase STEM Graduates The USNH and the New Hampshire Community Colleges signed a letter of agreement to commit to steps to increase the number of STEM graduates by 50% in 2020 and doubling that number in 2025. The two systems currently graduate a total of 1,120 students in STEM fields. New steps will include:

• Creation of new transfer pathways for students in STEM fields;
• Collaboration on program development and delivery;
• Promotion of STEM career opportunities;
• Sharing of facilities equipment, technology and staff and faculty expertise;
• Identification of resources to support STEM field education;
• A commitment to expand access to education and opportunities in STEM fields for all state residents across all regions and socioeconomic groups; and
• Other initiatives in partnership with New Hampshire employers.

RHODE ISLAND

The Rhode Island General Assembly concluded business on June 13, after approving an $8.1 billion budget funded in part by new taxes on taxi fares, clothing items costing $250 or more and pet grooming. The budget accelerates implementation of the new school aid formula, restores previous cuts to services for developmentally disabled and rejects an expansion of the meals tax proposed by Gov. Lincoln Chafee.

Lawmakers enacted a legislative package, which builds on the “Making it Easy to do Business in Rhode Island” program that began in the 2010 legislative session.  The package is designed to aid small businesses by eliminating red tape and replacing outdated laws and regulations while insuring the state and municipalities are using the same standards. One measure which is part of this package and which is funded in the budget is a new web-based permitting system that will include a uniform building plan review, permit management and inspection system.

Among session highlights, the Rhode Island Legislature:

• Passed the first-in-the-nation Homeless Bill of Rights which prohibits unfair treatment of homeless people by police, healthcare workers, landlords and employers;
• Passed bill that would give the state 18% of proceeds from table games that would be part of new casinos at the Newport Grand and Twin River Slot Parlors. (Rhode Island voters must first approve the proposed casinos.);
• Repealed a 7% sales tax on tours and sightseeing packages after strong lobbying by the state’s tourism industry;
• Increased the tax on cigarettes by 4 cents per pack;
• Decriminalized marijuana, eliminating the criminal penalty for possession of an ounce or less and instead, imposing a civil penalty of $150;
• Increased surcharge on rental cars from 8%, up from 6%;
• Made sports drinks, iced teas and iced coffees subject to the state’s beverage container tax;
• Increased the minimum hourly wage from $7.40 to $7.75, beginning, Jan. 2013;
• Passed a flexible, less-costly fire code that takes into consideration, new technologies which are designed to increase safety while reducing costs;
• Approved fast-track permitting for projects; and
• Authorized Rhode Island Economic Development Corporation to issue bonds to fund dredging at the Port of Davisville to accommodate modern shipping vessels.

K-12 Education Education Commissioner Deborah Gist recommended closing the Academy for Career Exploration because of poor performance. None of the 225 high school students scored proficient or better on recent mathematics tests. Gist also noted the school has failed to provide instructional support for students with difficulties in math. School Head Larry DeSalvatore countered that 80% of students were proficient in reading and that students would show success in math over time. Gist has been critical of other charter schools in the state, citing the same issues regarding performance and leadership.

Higher Education Reorganized After considering several options, House and Senate members came to an agreement on plans to reorganize education and higher education agencies. In a last-minute change, legislators included language in the FY 2013 budget, to eliminate the Rhode Island Board of Governors for Higher Education and the Board of Regents for Elementary and Secondary Education and merge both into a single entity, the Rhode Island Board of Education. The new agency will be governed by an 11-member board that will oversee the commissioner of education and the commissioner of higher education. An executive committee made up of the presidents of the Community College of Rhode Island, Rhode Island College and the University of Rhode Island will work with both commissioners to eliminate unnecessary duplication in public education.

VERMONT

On May 6, Vermont lawmakers approved a $5 billion budget for FY 2013, which increases spending by 6%. The budget which is balanced without raising sales or income taxes, includes funds for cleaning up after Tropical Storm Irene.

Goodnight Irene, Hello Single Payer Without including funds for Irene, spending rose by nearly 3%. The budget includes the General Fund, Education Fund, Transportation Fund and miscellaneous smaller funds. Lawmakers also agreed to rebuild state offices in Waterbury where Irene wiped out the state offices complex.

The transportation bill, with a price tag of $685 million, represents the largest transportation bill in the state’s history and increases spending over the previous year by $105 million. Funds will be used to tackle roadway projects along with state and local bridges, especially in areas affected by Irene. The bill also decreases the match that local communities must come up with, to 5%, for making road and bridge repairs.

Health Care Exchanges Bill Passes Lawmakers made more progress toward a single-payer plan. This year, in phase two of the plan to put a single payer system in place, lawmakers sent the governor a bill that designs healthcare exchanges and mandates health insurance for all Vermonters. Vermont is now seeking a federal waiver to begin making its own rules including the design of a marketplace for health insurance and mandating insurance for all Vermonters. By 2014, Vermont businesses with fewer than 50 employers must drop their insurance plans and become part of the state’s health insurance exchange. In 2016, Vermont businesses with fewer than 100 employees will be added to the exchange, and finally, in 2017, the journey will be complete with all Vermonters included in the exchange. For the coming legislative session, lawmakers will tackle setting up healthcare exchanges and finding a way to pay for it.

Ed Agency Will Be in Governor’s Cabinet The Legislature approved making the Secretary of the Agency of Education a cabinet officer who will report directly to the governor. Previously, the “commissioner” of education reported to the State Board of Education, which also set education policy. The bill also reduces the term of members of the State Board of Education from six years to three. The law essentially allows the governor a place at the table in setting an agenda for education.

Mental Health Reforms Landmark legislation reforming the state’s mental health care system was passed by lawmakers and signed by Gov. Peter Shumlin. The bill essentially moves from an antiquated institution-based care system to an individual, community-based system. Vermont State Hospital, which was damaged by Irene, will remain closed. The new law will provide acute in-patient care at the Brattleboro Retreat, the Rutland Regional Medical Center and Fletcher Allen Health Care in Burlington, as well as a new 16- to 25-bed secure facility near the Central Vermont Medical Center in Berlin. Also more will be done to see that services that enable individuals to remain in their communities will be increased.

Tropical Storm Irene flooded Vermont State Hospital, forcing it to close. Ironically, the hospital’s closure provided the impetus for the legislation that revamped the mental health care system in the state.

Mandatory Statewide Recycling Signed Into Law Vermonters currently recycle 36% of their solid waste with 64% of waste going into landfills. State officials say Vermonters are throwing away $7 million worth of waste, which could be recycled. The bill would mandate statewide recycling to be phased in by 2020. In 2014, large generators of food waste will be required to recycle. By 2015, all households would be required to recycle paper and plastic and in 2016. all organic materials would be recycled.

K-12 Education Despite objections of some lawmakers who said creating a cabinet position for education would politicize the process of setting an education agenda for the state, the legislation passed with bipartisan support and the support of the Commissioner of Education Armando Vilaseca. The bill converts the Department of Education into the Agency of Education headed by a secretary of education, which replaces the current position of commissioner.

Shumlin noted that under the old system, the State Board of Education, has been responsible for making changes in education standards without the governor and the commissioner of education. In January 2013, the State Board of Education will recommend three candidates to governor for the new position of secretary of education. Stephan Morse, Chairman of the State Board of Education indicated the board will present a list of educational priorities to the new secretary. The State Board will remain the state’s education policymaking authority.

Higher Education Shumlin named a panel to examine the relationship between the State of Vermont and the University of Vermont and produce realistic outcomes that would be presented to the governor and the new president of UVM. Anong the eight panel members are: Nicholas Donofrio, former Executive Vice President at IBM; Alma Arteaga, a junior at UVM; A. John Bramley, former Intern President of UVM, former Provost and Senior Vice President of UVM; and former Lyndon State College President Peggy Williams.

The panel issued a report, New Ideas for Changing Times: Strengthening the Partnership between the State of Vermont and the University of Vermont, which, among other things, would modify the requirement that restricts tuition for all in-state students to 40% of out of state tuition, allowing the university to establish tuition to provide access and affordability to Vermonters, according to their ability to pay, while focusing more on strategies to address appropriate financial aid.

Carolyn Morwick is a consultant at NEBHE and former director of the Caucus of New England State Legislatures.

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