A deal on a tax bill Saturday afternoon finally ended a long – some would say, strange – legislative session in Montpelier. It started with lawmakers electing a governor, and wound up with a different set of accomplishments than what many observers might have predicted.
Gov. Peter Shumlin joined VPR to debrief the session.
Keefe: When you look at the agenda you laid out at the start of the session versus what you actually got in the end, how do you think you fared?
Shumlin: I’m thrilled, frankly. We put together a very ambitious agenda, and we got most of it. And obviously the biggest disappointment was kicking the can down the road on paying for health care as we should be paying for it, Medicaid. But we came out with a $113 million balanced budget. We came out with a water bill that’s finally going to clean up our lakes and streams. Blue-green algae, we hope for our kids and grandkids will be a thing of a past.
We came out with an education bill that’s eluded governors for generations, where we’re going to finally go after property taxes and quality by having a delivery system that deals with the 78,000 students that we’ve got instead of the 110,000 we used to educate. And we passed the RESET Energy bill that’s going to take Vermont on a next stage to green, clean, renewable power generated right here in Vermont.
Keefe: There were a lot of political observers who said you started from a weakened position at the start of the session, given the close election, given that you stepped away from single-payer health care. How did these things hurt your ability to get things done in Montpelier?
Shumlin: You know, I’ve never bought into that narrative. Governors have a lot of power, and it doesn’t – Vermonters don’t ask when you sign a bill, ‘How many votes did you get in the last election?’ They ask, ‘Are you doing the right thing, and are you doing what you asked me to do for us?’ I had a very clear message for voters this time: Make this economy work for every single Vermonter, not just a few.
And every initiative that we passed in this Legislature addresses that concern in one way, either directly through pocketbook issues, or quality of life issues. So, you know, governors have a lot of power, I exercised that power. I’m thrilled with the results we got, and I think that the fact that we got so much of the ambitious agenda that I laid out in January accomplished almost exactly the way I laid it out, is proof that there was no weakened position.
Keefe: So you don’t think it was harder to negotiate with legislative leaders this session?
Shumlin: It was exactly the same negotiations I’ve had with legislators every – each of the years that I’ve had the privilege of being governor, which is to bring together the administrative branch’s view with the legislative branch’s view and get the job done. And that’s what we did.
Keefe: One of the disappointments you mentioned, governor, and that lawmakers have mentioned, was health care. We started this year talking about single payer, then you called for this $90 million payroll tax that lawmakers rejected. We ended up with a roughly $3 million bill that one senator reportedly said was “pathetic” compared to what we were looking at earlier in the session. How do you feel about this health care agenda and where we ended up?
Shumlin: Well, I’m obviously disappointed that we didn’t get more done in this session. But big picture, we are doing more than most states to move to an all-payer waiver, to move the state from a fee-for-service ... payment system to one that reimburses for quality and outcomes. And health care is gobbling up our incomes faster than we can make it.
Between the Green Mountain Health Care Board and my administration and the entire health care community, we’re making real inroads on the possibility of an all-payer waiver from President Obama that’s going to help us to move our system to make it more affordable and more logical. And I’m excited about the prospects.
Keefe: But we didn’t make any of the big inroads that we started out talking about. Single payer or reducing the Medicaid cost-shift –
Shumlin: Yeah, but I want to remind us that in terms of single payer, I pulled the plug on that before the session started. So if anyone’s surprised at that, they just weren’t listening. In terms of the Medicaid cost-shift, we’ve got to deal with that. But let’s be honest: Governors have been kicking the can down the road – and legislators – on fair payment for our providers who take care of our most vulnerable for 20, 30 years now.
The problem continues to grow as we sign more and more people up for Medicaid, and then don’t pay for it. So, we’ve got a problem that’s got to be fixed. I came up with a solution to fix it. It’s not a huge surprise that it didn’t pass, since we’ve been avoiding this challenge for a long, long time. But it really does have to be addressed, and I’ll keep pushing.
Keefe: Given what you’ve already proposed for health care reforms, and what’s already been rejected, what can we realistically expect for next year when it comes to reforming the health care system?
Shumlin: Well, the most exciting that’s happening, I believe anywhere in the country, is on health care in Vermont right now. And it really is moving from a system that reimburses for quantity, which is the only way you can survive as a provider right now – the more volume you do, the more likelihood you have of being able to stay in business in this crazy payment system that we have – to one that reimburses for keeping folks healthy. And that’s going to revolutionize the way we spend our health care dollars to make it more affordable, improve quality and stop doing a lot of unnecessary work that we shouldn’t have been doing in the first place. So, I’m working together with the Green Mountain Health Care Board, with the entire health care community and with President Obama to try to get that done.
Keefe: I want to talk about the budget deal that was struck on Saturday afternoon to close out the session. It will result in some higher taxes for some Vermonters in the form of capped income tax deductions, though you fought to have some of those deductions excluded. But there were no major changes to the income tax code. We’ve seen major changes called for on both the Republican side and also on the – on the progressive side. And we’re still in line to spend about 4.5 percent more next year than we did this year. Are we just going to be dealing with this same problem next year? Do we still have a structural budget problem?
Shumlin: We made huge inroads in our structural budget problem, and let me be clear about the numbers. My budget that we just passed is 2 percent higher than the budget that we passed a year ago when the Legislature went home. That 4 percent number refers to after we did millions and millions of dollars worth of rescissions to last year’s budget. So, this is a 2 percent increase over the budget that was passed by the Legislature last year – that put us on a sustainable spending path. Having said that, in terms of taxes, listen, I know I sound like a broken record, but I do not believe, and as long as I’ve been governor, I have said this very clearly, that our income taxes, our sales taxes and rooms and meals taxes are too low – I think they’re too high.
So, I have successfully, for five years, fought increases in those tax rates. What I agreed to with the Legislature was making sensible changes to our tax system that would raise $30 million without raising those rates, and without taking away the ability of Vermonters to deduct charitable contributions and catastrophic health care costs, which are critical to quality of life in Vermont. So, I feel very good about the way we held down the tax package, made additional spending cuts, which I insisted upon, to the budgets that were passed, and came out with a tax package that didn’t hurt charities and Vermonters, that didn’t mostly seniors who deduct big health care costs.
Keefe: Were you happy with what you got out of this tax and revenue deal in the end?
Shumlin: I was, because it significantly contained spending, as I mentioned. There’s only a 2 percent increase over the budget that was passed last year. That’s sustainable. And we didn’t have to raise tax rates on Vermonters when our taxes are already high enough.
Keefe: You had some changes on some of your positions on certain issues this year. There was a gun bill that you originally opposed but you ultimately agreed to it with some significant changes there. And you seemed to have had a change of heart on the so-called philosophical exemption that parents use not to vaccinate their children. Can you help us understand your thinking here, your evolution on these issues?
Shumlin: There was no evolution on guns. And I’m amused by the interpretation of the gun bill that was just outlined, which I’ve heard from various press reports. Listen, I have been consistent on guns all my life. I think the laws that we have in Vermont serve us well. Sensible changes occasionally make sense. I then helped work together to get all the things I didn’t like out of the gun bill, so all it did in the end was similar to when we banned guns in schools. So, there was nothing left of the gun bill that I objected to, and therefore I signed it. And frankly, the sportsmen – men and women across Vermont didn’t object to the bill when we were done with it. So, that was a success – taking a bill that I opposed, and making it into something that was so small that I thought it actually made sense for Vermont.
Keefe: And what about the vaccination issue? You originally –
Shumlin: In terms of vaccination, I’ve always been clear that you should vaccinate your kids, that vaccinations work. I wished that the voluntary system that we put in place two and a half years ago had actually reduced the numbers in Vermont, which they haven’t. So, my feeling was, I would’ve – you know, I was perfectly happy to let the bill that we put in place work for another year or two. But I believe in vaccinations. They’re the right thing to do. And I hope that this will work in actually increasing the number of kids in Vermont who are vaccinated.
Keefe: And when you say this, it basically makes it more difficult for people to claim this philosophical exemption, is my understanding.
Shumlin: That’s the idea. Let’s see if it works. Don’t forget, you still have the religious exemption – you don’t need a letter from your pastor or from your rabbi or wherever, if you claim that you, that your religion doesn’t allow you vaccinate, then that gets you out of it. We still have the health – health necessity waiver. So the point is, there’s still ways to avoid vaccination. I think what we’ve got to do a better job of is convincing parents is convincing parents why vaccinations make sense, not just for their kids, but for the kids and people that they’re in contact with. We’ve got to raise the numbers.
Keefe: Governor, we ended the term with some pretty shocking and disturbing allegations about Republican state senator Norm McAllister from Franklin County being charged with some sexual assault charges. It doesn’t look like he’s going to resign any time soon, at least not right now, on his own volition. You’re a former president of the Vermont Senate. Do you think that Vermont state senators should act to try to kick him out of office if he refuses to leave on his own?
Shumlin: Well certainly if he hasn’t resigned by January they should take an action. I would expect him to resign, to see the light and resign soon. Listen, this is not serving anybody well. When you have allegations of that nature, which are so repugnant, and everyone deserves a trial – and he will get his, his day in court – but you should not be serving as a senator when you’re fighting allegations of that nature.
Keefe: Do you think that senators should come back over the summer or something to take care of this? Or is it something you think can wait?
Shumlin: I think we should see what happens. My guess is that Senator McAllister will do the right thing before we’re done.