The Vermont Legislature today adjourned until the 24th of March in light of COVID-19 developments. The Rules Committee will continue to meet by phone on a daily basis in order to assess the state of affairs and to see when the Legislature should reconvene. Committees are expected to continue to “meet” via conference calls during the next week to focus on their priorities. The House focused this afternoon on some emergency legislation with regards to unemployment insurance, paid family leave, emergency health insurance and telemedicine measures throughout the COVID-19 crisis. The Governor is expected to hold a press conference this evening on the matter as well. The House spent the afternoon moving all other bills on the Notice Calendar through all stages of passage. This includes H.611, the Older Vermonters Act which can be found on page 1636 of today’s calendar. I cannot attach a pdf because the file is over 100 pages. Please copy and paste the link into your browser if you would like to read the language.
https://legislature.vermont.gov/Documents/2020/Docs/CALENDAR/hc200313.pdf
On Thursday afternoon the Senate Institutions Committee heard from the Vermont Business Roundtable about the unfunded liabilities. They did not hand out copies of their report but they reiterated the need for changes to the current system. They suggested stress testing the investments and reconsidering the make-up of the Vermont Pension Investment Council (VPIC) to include more experts in financial matters. They argued that the Council is not prepared to make decisions with regard to investments and that is why the expected rate of return and discount rates are inflated. They also asked the Committee to consider contribution rate changes and the change from defined benefit to defined contributions for new employees. They also stressed that the current investments will be under even more pressure as a result of this bear market. Steve Howard from the VSEA then testified against the suggested plan design changes. He told the members the VSEA has proposed a bill which taxes those making over $500,000 to help make up for the pension liability issue. He argued that employees were not the ones to blame for the erroneous actuarial projections for this plan or the policy changes that have resulted in this problem and should not bear the burden to solve it.
David Coates, on behalf of the Roundtable then told the Committee that they have been unable to get time before Senate Government Operations or Senate Appropriations to explain their positions. Sen. Mazza (D-Grand Isle) then voiced his frustration with the fact that the Treasurer does not appear to have a plan to solve the issue. Howard defended her by explaining there is a plan in the works, but it is not ready for primetime. He told the Committee that there is a working group that has been planning behind the scenes. Committee members expressed great frustration that this process that the Treasurer is leading is taking too long. They want a solution this year. The pension gap is leading to an inability to bond which is reducing the capital budget by a substantial amount next year if they don’t address it.
I spoke with a representative from the Treasurer’s Office today. She said those conversations with the unions came to a standstill since the VBR community refused to accept changes proposed by the Treasurer that still maintain the defined benefit plans. She does believe that their office has the support of both Appropriations chairs and don’t think VBR will be successful in changing the plan structure.
I am sure you all heard the Governor’s press conference this evening, but for those who missed it, he has placed a strict order on banning visitors from long term care facilities unless family members are in intensive, or end of life care. He also is asking state government to postpone unnecessary travel and to allow employees to work from home as much as possible.
Our team will try to keep tabs on these remote meetings next week and hope to have an update for you all then.