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Bring Back the Babies

October 6, 2024

 

Dear All,

As a state, we are struggling with huge challenges around affordability. We want a lot of services, and we want the same access we had 20 years ago.  However, we are struggling with the high cost of it all. And, we are in the midst of a housing crisis. 

Something big has changed in recent decades that explains some of the pressure we feel: our demographics. I say this as someone growing her own headful of gray hair. Our average age is growing and as our population gets older, how we use services changes in ways that affect our affordability. 

The figure below shows what is happening.

 

The left axis represents number of people.

 

The bottom axis represents age groups within our population.

 

The green bar represents our school-aged population, and the blue bar represents people in their prime working years.

 

The lines represent how the distribution of our population by ages is shifting over the decades between 2010 to 2030.

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Just think about the story here!

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A large proportion of our population is aging out of the workforce and the number of people in the workforce is declining. Young families are not moving in behind them. State migration data suggest that while a handful of wealthier families are choosing to relocate to Vermont, we are losing moderate income families, especially those whose income is under about $100,000 year.

 

These families represent an essential part of our workforce.The challenge of an aging population is more severe in Windsor and Orange counties than it is in some counties.

 

For example, this second chart (below) of demographics for the Gifford Hospital region suggests we can expect our local workforce to shrink by 41% in the next ten years, unless we turn trends around. Just think about the impact of that. That is a staggering and sustained trend.

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Source

The median age in Windsor county is now about 48– one of the highest in the state– and growing. That compares to 37 in Chittenden County.  

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Impacts on Housing Availability and Prices: 

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For those of us who are aging, our kids have left home, which means many of us have fewer people living under the same roof than we did ten years ago. Statewide, that means we need more homes to house the same overall number of people.

 

That puts upward pressure on housing prices.

 

At the same time, it means fewer kids in our schools, which means higher costs per pupil to preserve good public education opportunities for our children. Higher per pupil costs mean higher tax rates. In turn, since housing costs include the cost of property taxes, those rising property taxes mean even higher housing costs. 

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This just makes it even harder for young families to move here.

 

It is even harder on them when their wages don't keep pace with inflation. And it is hard, of course, on seniors who also fear being priced out of their homes. 


When families can't afford to live here, employers struggle to find employees. When a hospital tries to hire nurses, but those nurses cannot find housing, then the hospital is forced to hire traveling nurses at up to three times the cost. 


These high housing prices and scarce availability also contribute to the increase in unsheltered homelessness across the state. 

Impact on Healthcare Prices:  

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As we age, we use different kinds of healthcare, and often more healthcare. More significantly, we are covered by Medicare.

 

Both Medicaid and Medicare reimbursements are capped by the federal government, and do not cover the real costs of care in VT.  Somebody has to pay the difference, and that means those costs shift on to people insured through commercial insurance companies.


In the last eight years, the cost of some of these plans has doubled.

 

This causes three problems: 

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  • First, a lot of people are underinsured, because they can't afford the premium.

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  • Second, a shrinking workforce means fewer people with private insurance. If our workforce shrinks as much as current trends suggest, the commercial insurance of that shrinking pool of workers will have to bear the burden of that cost shift from Medicare and Medicaid.  In turn, that creates a spike in the price of private insurance.

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  • Third, as those  commercial rates increase, those higher costs are baked into every budget, from the state budget to your school budget to the budgets of local businesses. 

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In fact, the Green Mountain Care Board identified out-of-control healthcare premium increases as a major driver of increased cost in school budgets. Similarly, businesses across the state have struggled to afford benefits. 

 

Many have had to choose between increasing wages and providing good healthcare benefits. In fact, wages in Vermont have not kept pace with inflation, which means a lot of working households are worse off than they were a few years ago.

 

Some families have reduced hours or wages to remain eligible for Medicaid, which improves their family finances, but which drives more cost back on to the federal government and commercial insurance rates.

 

To bring down property taxes and make Vermont affordable, we need serious leadership on development of housing near jobs and on healthcare reform.

 

While it would be easy to blame private insurers, the reality is that BCBS has run a deficit in five of the last six years, even with double-digit rate increases, because the actual underlying growth in cost of care is just that great. 

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That brings us to property taxes.

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Vermont faces a crisis of affordability across multiple sectors, from housing to healthcare.

 

And this unaffordability is all coming together to drive up your school property taxes.

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This year, the biggest drivers of increased spending in school budgets was teacher healthcare (almost five cents on your rate), mental health for students (about five cents on your tax rate), infrastructure (about five cents on your tax rate), and about five cents needed to fill in the hole created by using surplus to buy DOWN your tax rate last year.

 

For most people in the state, that explains their entire increase.

 

Some of the most durable reductions in property taxes will come from building housing, especially in high tax rate communities near jobs and from tackling healthcare reform.  

The state must take the lead on developing municipal wastewater systems in communities near job density in order to help bring down tax rates.  

I wrote about priorities for tackling our high property taxes in detail last May. 

 

I will continue to advocate for durable changes that make Vermont affordable, not just today, but into the future. 

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Best,

Rebecca

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THE LATEST FROM REBECCA

Housing

Sept 28, 2024

 

Dear all, 

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It has been a very hard couple of weeks for many families across the state, as the state unhouses hundreds of Vermonters, including very young children and adults with serious medical conditions and disabilities.  As Thetford resident and health policy expert Anne Sosin has said, “This crisis was both predictable and preventable. It is also still solvable.”  

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This has also been frustrating for the many of you who have worked hard locally, thorugh advocacy and direct service, to prevent this from happening. Your efforts have kept this from being worse, but we need a state solution. This is a tragedy, and it needs state leadership to turn it around.

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The Governor keeps emphasizing his belief that we “need to wean ourselves” off of this program.  However, people are not puppies, and there are no happy adoptive homes for these people once they are “weaned”-- just emergency rooms, tents and streets. We are now “weaning” toddlers off their only housing. 

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The governor’s reason has been that the program is unsustainable, however throwing people in the streets does not cut costs.  It just shifts costs to other budgets, including hospitals and municipal budgets and school districts. 

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Each year for three years, the legislature asked the governor to come up with a transition plan.  In the midst of this, his policy director said about the General Assistance program: “We just need to rip the bandaid off and end this program.”  We didn’t do that, but we still don’t have a coherent strategy for how to keep people safe while they get back into stable housing. Moreover,  the subsidies provided by Reach Up, which is Vermont's income assistance program for very low-income families with children, still uses 2001 housing prices as the base for calculating the size of the benefit. Those subsides are no longer sufficient in the 2024 housing market. 

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Instead of spending $80 a night for someone with a medical condition, now we will spend $3000 a night in a hospital. Instead of providing a place for families with young kids to live, so those schools can easily provide for young children during the day,  schools are now obligated by federal law to provide more services to make sure these unhoused children can still reach and thrive at school.  

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Effectively, the Scott administration is reducing cost at the state level by making budgets managed by others pick up the cost.

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The 2024 “point in time” survey  found that Vermont has approximately 3,500 individuals who are homeless, including over 500 children. 

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The impact on young children of housing instability is  significant, and can harm long term cognitive, social-emotional and health outcomes. 

People need places to live. We have a grotesque shortage of housing in the state, and the result has been higher rents and house prices, and more people on the edge of losing their housing. People don’t end up in emergency housing because they do not work.  In fact, most have jobs and also have to do extraordinary work to stay in that emergency housing.  At one point, the state required people to check in every day…at great cost both to the state and families.  

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People often end up in the emergency housing program because they have less of a safety net and some bad luck: a medical emergency, a disability, a flood that destroyed their home, a landlord who decided to cash out at the top of the housing market, a death in the family, a loss of a job. One was a man with progressive dementia whose condition left him unable to manage his finances. In the end, he lost his house.  We will always need temporary shelter to support people who have been hit by adversity as they work to find permanent housing.

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Last session, the House passed H.879 which would have created, in statute, an emergency shelter program.  This was an acknowledgment that we need to have appropriate shelter to provide a safety net for those who are in between stable housing arrangements. The bill failed to pass the Senate. Some elements of the bill were modified and added to the budget (Act 113). The legislature expanded the definition of disability to include documenting disability or health care condition from a health care provider. (Previously a person had to have SSI or SSDI, but cuts at the federal level have limited the number of people who have had access to this federal identification.)  We still have work to do.

Over the summer, members of the House Human Services committee are again working to propose a shelter program that can provide a safety net for people as they get back on their feet. 

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Of course, this work goes hand in hand with efforts to make sure the state has enough housing for the people who live here– a problem that is made worse by the fact that almost one in five houses in VT is now a second home. Residents of Norwich and Thetford are feeling this on the pocket book front as well:  second homes are now taxed at a rate that is about 30 cents lower than homesteads, effectively rewarding people financially for using this valuable housing stock as a second home rather than a residence. The legislature asked the Tax Department to come back with recommendations on how to effectively identify and distinguish second homes from the rest of the property tax base, so that this problem can be addressed.  

In the meantime, I will also push for state funding for municipal wastewater systems near areas of job density.  We can't address our cost challenges, our education challenges, our health care challenges, or our workforce challenges without supporting the development of affordably homes near where people work.  This is how we take care of people while climbing out of our current cost "bomb."

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We will keep working,

Rebecca

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What did our FY 25 budget provides on housing?

  • $7.5M GF for Emergency Housing in addition to a $16.5M GF one-time appropriation and a $20M GF contingent appropriation

  • Provides $7.2M GF for shelter bed expansion

  • Provides additional $753K to support programs for homeless youth

  • Provides a $10M contingent appropriation for shelter beds and permanent supportive housing

  • Provides $25.8M to DCF for the Housing Opportunity Grant Program (HOP) which provides for shelter operations, flexible supports, rapid rehousing, etc.

  • Provides $900K GF for the State Refugee Office to support transitional housing for refugees

  • Directs $1.2M from the Opioid Abatement Fund for recovery residences, including two new residences

  • Provides $1M GF to extend 10 DCF positions to support Emergency Housing

  • Provides $1M GF to the Department of Housing and Community Development (DHCD) for the Manufactured Home Improvement and Repair Program

  • $6M GF to DHCD for the Vermont Housing Improvement Program (VHIP)

  • $4M GF to DEC for the Healthy Homes Initiative

  • Provides $332K GF for 2-1-1 to operate 24/7 (211 approves emergency shelter nights and weekends)AC

 

Ongoing data collection and reporting can be found at this site:  https://dcf.vermont.gov/Addressing-and-Preventing-Unsheltered-Homelessness


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Rep. Rebecca Holcombe: Vermonters deserve affordability, but Gov. Phil Scott has no ‘grand plan’

​The yield bill is more responsible than the governor’s offerings, and some of his ideas would raise taxes.

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June 11, 2024, 8:02 am

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This commentary is by Rep. Rebecca Holcombe, D-Norwich. She represents the Windsor-Orange-2 district and is a member of the House Appropriations Committee.

 

It’s Groundhog Day. Gov. Phil Scott vetoed the yield bill, again leaving Vermont school districts adrift. The reason: the school budgets voters approved add up to more than Gov. Scott wants them to spend.

None of us like an increase. Some legislators are leaving because they can’t afford to serve. We need people to call our communities home, operate our businesses, care for us when we are sick and educate our children. We know property taxes affect the cost of housing. That cost makes too many people say “no, thanks.” 

However, exactly what the governor expects the legislature and local school districts to cut is a mystery. As Seven Days noted: “Scott cautioned the public not to expect he’ll have any grand new proposals.” 

So, why the veto?

We need real leadership — not politicking — to move us forward. 

Health insurance premiums are up by double digits for yet another year, not just for school budgets (almost $50 million or 5 cents on the tax rate), but also for the state budget, business budgets, municipal budgets and family budgets. Out-of-control health care costs hurt everybody, but we can’t fix them at our kitchen tables or in school board meetings. What has Gov. Scott done — not said — to help? 

Rising costs associated with mental health demands explain another 5 cents of the increase in this year’s property tax rate. Addressing mental health means treating risks at the source, including supporting parents, so parents can support their children. For that, the governor needs to bring his social service agencies — or what is left of them — to the conversation. 

Increased infrastructure costs explain another 5 cents of the increase, and are aggravated by ambitious but poorly thought out policy on PCB mitigation. We need the governor’s help on this too. What we have instead: the administration continues to turn up problems then leave solutions (and cost) to others. 

Just those items alone account for most of this year’s tax spike. 

Gov. Scott claims he has no “grand solutions.” His one big idea was to borrow from the future to pay for today. Then State Treasurer Pieciak explained his proposal could erode our state’s credit rating, making the future even more unaffordable.  

As he did in 2018, the governor insisted on using “one-time money” to pay for ongoing costs — a bad and unsustainable business practice. The legislature compromised by using $70 million for this purpose. There are no additional dollars to throw at this problem. 

Voters voted on school budgets. The governor signed the state budget. At this late date, what can we cut? We have few tools:

  • We could eliminate the property tax exemption for charitable and religious purposes, “saving” about 4.5 cents on the tax rate. 

  • We could reduce or asset-test the exemption for current use, “saving” up to five cents on the rate.

  • We could asset-test income sensitivity, “saving” by limiting who gets this credit. 

  • We could phase out TIF funding, about which the Joint Fiscal Office said “the core theoretical assumption upon which tax increment calculations are based is flawed and unsupported by the data and economic theory.” 

All of these actions would yield savings for the majority of taxpayers. Will the governor advocate for them? 

The reality: in education, as in health care, taxpayers are paying for too much infrastructure, both in Vermont and out of state, often in units that are too small to affordably provide quality care.

As a colleague used to say, a person can’t go to a 28-course buffet, pay only four dollars, and expect the food to be edible. Too often, our answer to rising cost and sagging quality is to add another course. 

We could reduce and improve  “courses” by bringing more children into fewer, more robust schools. The state’s actions do the opposite. 

There is no path to affordability that involves forcing public schools to compete with private schools that are narrow in scope, out-of-state, or exclusive in enrollment. Taxpayers in every community help fund tuition to: 

None of these programs can replace public schools or inclusive private schools like Thetford Academy. They do erode the scale and affordability of schools with a public mission.

If you support this, as the governor does, don’t complain about cost. This is a recipe that, across states and in Vermont, results in higher cost and worse outcomes overall. Let’s keep our dollars in Vermont, in schools of sufficient scale and in schools which meet the public obligations of our public education fund, as defined in our Education Quality Standards.

I’m disappointed we did not do better this session, but I will vote to override this veto. The bill is more responsible than the governor’s offerings, and some of his ideas would raise taxes. The bill requires summer work that puts us in a different position next year. It cushions the blow this year, while protecting children and our most vulnerable taxpayers.

OUR CHALLENGES ARE REAL

Sept 27, 2024

 

Dear all, 

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I generally try not to engage in the divisive political talk coming out of the Governor’s office during this election season because at the end of the day, we have to figure out how to work together. We have to work together if we hope to solve the big problems that face our communities, from the acute lack of housing, to high property taxes to the high cost of health care.

 

I have to believe we are on the same team: Vermont’s team. 

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However, this year has been extraordinary in both the level of misrepresentation and the aggressive tone coming out of Governor Scott’s office. The rhetoric has been particularly misleading and accusatory around property taxes and the Afforrdable Heat Act, which I have written about here and here.

 

He even used the Agency of Transportation to send out an accusatory political message on education property taxes-- an unusual use of taxpayer-funded transportation resources. 

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We are lucky so far in our region, but in some regions, his tone has fueled threats against other legislators, including at their homes. 

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I understand the politics can get heated, but the problems we face as a state are serious. They have developed over years, and not one session. They are complex and cannot be solved with slogans. 

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Moreover, they cannot be solved unless the Governor steps up. He and his team are there year round, and they run the agencies and the data. We need him to propose viable solutions. On the other hand, legislators only show up for 4 to 5 months, and our total compensation is only a little more than the raise that he received this year.

 

In our VT constitution, the legislature is best positioned not to propose, but to dispose of policy put forth by the Governor.  When he does not step up and help with sensible, evidence-based recommendations, we struggle. That is great for his politics, but very hard on the state and taxpayers. 

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I sit in the House Appropriations, and I see first hand that to the Governor, cost containment means not filling positions in state government (there are at least 1000 vacancies at any given time), then using the vacancy savings to offset out of control health care costs. Who pays the price?  The people who need the services these now vacant positions would have provided, and teh people who would have benefited from policy developed with the healp of experts. 

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I also see how fiscally constrained we are as a state.  Several of our current challenges: constrained revenues, housing shortages, higher costs, are related to the demographic changes we are undergoing.  The answer cannot always be more money or more programs. It sometimes has to be: we need to do things differently and focus on priorities and core operations. 

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When the failure to recruit and retain staff includes failure to access critical expertise, the whole state pays the price. 

 

For example, the Agency of Education has struggled to recruit and retain a state director of special education. The agency went for months without a director of special education. This staff person is responsible for providing technical assistance and guidance to school districts, so that they can provide special education as directed in rule and statute. 

 

Unsurprisingly, after months with no captain at the helm, multiple districts were struggling to comply. The fact that the Governor’s administration posted the state director position with a salary of only $66,000 was probably part of the problem;  a skilled special education can make twice that in a school district.

 

The lack of education expertise in the Agency leadership and the turnover (the position is again vacant) have eroded the ability of the Governor and his administration to provide technical assistance and support that would protect kids and keep districts in compliance with federal law.  That means less effective use of tax dollars at the local level and worse outcomes for children. 

Similarly, instead of adequate funding technology at the Department of Children and Families, our Foster Care Information System is so outdated that it impairs the ability of state workers to do their jobs and renders the state unable to apply for some federal funds to support the needs of foster children…dropping that cost back on Vermonters and leaving children less safe.

 

Again, this inaction led to higher cost to taxpayers for worse service. 

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And as always, putting current operations on a credit card, which has basically been the governor’s strategy to force cuts on public education, can lead to higher cost and loss of service for the most vulnerable people in particular. Failure to do the hard work means pain for those who are least able to protect themselves, usually children, seniors on fixed incomes, people with disabilities, and families with modest incomes. 

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The governor’s most recent press release touts 2018 proposals that he claims would reduct tax burdens on Vermonters. This claim is not accurate. At the time, I had recently stepped down as secretary of education, and I was  concerned enough by the budget games that I wrote this.

 

Back then, as now, Scott was trying to overturn budgets that had been approved by local voters, while proposing a budget gimmick that might lower tax rates on paper, but which would have increased tax bills. You deserve better. 

The legislature has made mistakes as well.

 

I support funding equitable education opportunities AND I strongly believe the current education funding formula is deeply flawed and should not have been signed into law.

 

It is inflationary and poorly targeted in ways that will do real harm-- and not just to children-- if we don't fix it. We can change weights, but need to do so in a different formula.

 

I will continue to push for this change.  

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We need better. We really do. People cannot afford the crushing growth of cost in health care and education and housing, especially since these higher costs are not leading to better access or better quality.  

 

And at the same time, we can't just cut our way out of these challenges, all of which are aggravated by our lack of housing.  We need a coordinated and aggressive effort to turn the corner on housing, including by leveraging waste water investments and zoning for greater density near job centers. This alone would solve a whole host of our challenges. But this heavy lift is something we need to do together. 

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I will keep working with anyone who wants to help address the crushing costs that are driving higher property taxes, a lack of affordable housing, and health care that people can no longer afford. I believe these problems can be addressed.  But I regret that the kind of aggressive blame game coming out of the Governor’s office is chilling efforts to collaborate and propose solutions before the next session even begins. 

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Best,

Rebecca

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