Legislature, business scuffle over Yankee, health, housingby Art EdelsteinA variety of issues emerged from the 2008 legislative session of particular interest to Vermont’s business community. The cost of workers’ compensation, energy and the decommissioning of Vermont Yankee, health care, the declining quality of roads and bridges and the cross border passport issue are among several that came up in discussion with members of the Legislature and business leaders.Legislators must also pass some parts of the governor’s $214 million economic stymulus plan, which he announced April 19, 2008. (see www.vermontbiz.com for complete details of the plan)Workers’ compensation and its high cost in Vermont was an issue raised by Steve Adams, R-Hartland, the House minority leader. As of this writing Senate bill S345 has the best chance of passing both houses. Adams said the bill aims to reduce cost of workers’ compensation by addressing fraud, deductible policies, and calculation of the weekly wage. The bill House Republicans introduced, H831, said Adams, “won’t go anywhere.”According to Adams, S345 “won’t really reduce rates.” He said Vermont has the highest workers’ compensation rates in the nation, which “stymies economic development.” H831, he said, “would in fact lower rates but that bill won’t be taken up.”The Vermont Chamber of Commerce in its legislative update report, said it wants “greater cost savings from benefit realignment, which includes setting the minimum compensation rate at 15 percent of the average weekly wage (currently at 50 percent) and setting the maximum weekly compensation rate at 100 percent of the average weekly wage (currently at 150 percent); and offsetting wage replacement benefits for injured workmen who are not permanently disabled once they become eligible for certain governmental benefits.”Adams is not sure S345 will pass. According to him, “the bill doesn’t help but it doesn’t hurt.”Another issue of concern to House Republicans and the Vermont State Chamber of Commerce is the cost involved in the eventual decommissioning of the Vermont Yankee nuclear power plant in Vernon.”I’m hearing a lot about S373 and the decommissioning fund,” said Adams. Entergy, the company that owns the plant, he explained, wants to spin off some of its other nuclear facilities, ones that are currently stand alones, into a new company called Newco (ultimately, the name would change to something less generic).Adams said this plan is “about economies of scale, they save money and rate payers would save money through economy of scale.” The thrust of S373, according to him, is that the Legislature would let Entergy “spin off plants into Newco.”Tony Klein, D-East Montpelier/Middlesex, serves on the House Natural Resources and Energy Committee and has a very different view of the bill and this issue. He said Vermont Yankee had already submitted an application for relicensing on March 2. According to him, the fund set aside for decommissioning the plant needs to be assured to reach the estimated $700 million decommissioning cost.While the fund is currently at $440 million, Klein said, those who want more control over the funding of decommissioning do not think the current fund, and the money it earns, will be enough to meet expected expenses should the plant be relicensed for 20 more years beyond the current date of 2012 to the year 2032.Klein said that those who oppose the decommissioning bill “assume that decommissioning in 2032 will cost the same as in 2012.” He believes the cost will be much higher and the state has to assure that Entergy will be able to cover the costs, not Vermont ratepayers.Adams said the decommissioning fund is not a fund Vermont ratepayers should contribute to.”It’s a fund by federal law administered by the Nuclear Regulatory Commission. It’s managed by Mellon Bank.”According to Adams, if the bill passes requiring Entergy to assure there will be enough money in the fund, “then Entergy will pass on to local rate payers the cost of raising the additional money for the decommissioning fund.”In Adams’ view, “If Vermont Yankee shuts downs in 2012 and there is the five-year cool down time, there will be enough money in the fund.” He did not address the 2032 date.Adams said there is a greater issue with S373.”It does something not done before, it has the Legislature interfere with a public docket item the Public Service Board is currently working on.””That alone,” warns Adams, “ought to cause us to stop working on this bill. This isn’t the Legislature’s area to work on.””The business community is very suspicious of the regulatory process here if the Legislature is going to interfere in the process,” said Adams. “When is a deal a deal? they are asking.”Duane Marsh at the Vermont Chamber of Commerce said his group’s position on energy and Yankee is that “all energy alternatives need to be part of future energy mix, including nuclear.””We want to see that it doesn’t become so difficult for Yankee’s renewal that they do not continue toward renewing their license in 2012.”The actions by the Legislature, in his view, will “make it difficult to comply and give the sense to Yankee that it is so difficult to stay here and that they decide not to.”In another issue of concern to the business community, Adams said, was the cross border passport issue which deals with the federal government’s Western Hemisphere Travel Initiative. That legislation requires passports for all those crossing the US Canada/Mexico border. Business, he said, supports the creation of the enhanced drivers license rather than requiring everyone to have a passport. S358 addresses the issue, one he sees as a tourism initiative.”Vermont businesses,” he noted, “rely on tourism.”The bill passed the Senate and as of this writing was in the House Transportation Committee. The bill creates the enhanced drivers license.The issue of the declining quality of the state’s bridges and roads came up in discussions with Adams, Klein and Marsh.While the Douglas Administration has decided to put $3 million into Operation Smooth Ride, to fix potholes this year, there is a legislative push for the state to sell bonds to raise money for a more significant effort to improve the transportation infrastructure.Adams said the state had “done the best we can with the funds we have.”He attributes part of the problem to previous administrations, including the administration of Howard Dean.”It’s coming home to roost,” claims Adams, of the borrowing from the Transportation Fund in previous years.Adams said he favors bonding, which Douglas generally opposes.”We can’t afford to do what we have to do, it will cost a couple million to keep up.”He justified his position saying, “It will cost us less to pay for the bond today than to just purchase materials outright in the future. I’ve said interest rates will never be lower, we have a AAA bond rating.”Bonding beyond the $50 million accepted by Douglas, “will not happen this year,” said Adams.Klein said the Legislature “didn’t take from the Transportation Fund for unrelated activities.”According to him, the Douglas Administration’s transportation budget “had a deficit to begin with. They were making up the deficit by cutting across the Transportation Agency budget.”He sees Operation Smooth Road as a reaction to all the media interest in potholes. He called this program “operation road aspirin.”The House passed a requirement for looking into bonding which the governor doesn’t like, said Klein. According to him, “This governor is going to hold fast to not increasing taxes and he is betting the infrastructure while he is in power, but we all know the infrastructure will fall apart sometime.”Marsh said there has been too much diversion of funds from the transportation trust fund over the years. He said the figure was “close to $500 million in the past 20 years.”His answer to the problem was “to find ways to look at current spending levels to see what can be done from current levels to overcome the situation created.”The Chamber opposed a gas tax increase in the previous session.”Our policy is to stop diversions, and see what we can do,” said Marsh. “We want to look carefully at bonding, an alternative that needs to be considered.”Health care is an important issue for business this legislative session.Andrea Cohen, the Public Policy Coordinator with Vermont Businesses for Social Responsibility, said her organization wants the Legislature to begin exploring public financing for health care as “a more equitable system than we currently have.”VBSR members gripe about “the great expense members incur to insure families.”According to Cohen, under Catamount Health, competitors who don’t provide insurance pay $1 a day per worker to that program. As a result some VBSR employers spend $8,000 to $110,000 a year to insure workers and they do not see a level playing field “when our businesses spend so much money and the cost increases by 10 percent a year.”According to Cohen, “we have an equity issue, our employers pay so much and others pay $1 a day.”She gave the example of a construction company paying for health care at bidding time is unable to compete with a company paying $1 a day under Catamount Health rules.She sees premiums increasing yearly, while “the quality of insurance and benefits they can provide is decreasing and includes higher deductibles. We have a system relying on employer-sponsored insurance and it is crumbling,” notes Cohen.VBSR “wants to separate insurance from employment. We want to decouple health care. We have goals like public financing to pay for this.”The Vermont Chamber of Commerce supported a no vote on H887, which, according to Marsh, would shift more cost onto private sector premiums, while enhancing the access and thus cost of Catamount Health. He said “the bill does contain some good provisions, but amendments to eliminate the problems failed on the House floor.”The Chamber doesn’t like new mandates placed on insurance policies. An example is post-divorce coverage where a divorced person has the right to stay on their ex spouse’s policy with any extra cost paid by two parties. “It still makes a business a partner in a divorce settlement,” argues Marsh.The provision for coverage for adult children up to age 23 is unacceptable to the Chamber. Marsh said the cost to private insurance payers would be $16 million to $32 million a year because these health insurance costs are being born by businesses that pay a portion of the policy. The current coverage provisions end at age 19.Marsh said upping the coverage age “sends a wrong message to a child not attending college who should be seeking employment. If coverage is not available they are eligible for Catamount Health, a subsidized policy. By staying on a family policy the Catamount product isn’t available to them.”The Chamber wants to see elimination of the 75 percent rule where currently an insurance carrier doesn’t have to sell to a business unless 75 percent of employees sign up.Marsh said the new Catamount provisions would eliminate that completely, which will lead to “adverse selection. Which means business can have multiple carriers within their company.” The Chamber is concerned about the ramifications to insurance rates.”You have to balance good risk with bad risk,” said Marsh.The Chamber wants to study what a single-payer system would look like and how it would be funded. It also wants to study what the system would look like if it were government intervention free.”We want a cost comparison, structural comparison and we want the information to go forward.”We think Catamount Health should work and be sustainable before we expand it,” said Dawn Francis at the Greater Burlington Industrial Corp. “We oppose the cost implications of the bill as currently drafted.”Klein was blunt in discussing the current legislative initiatives on health care.”Nobody likes what we have now for health care in terms of cost and coverage,” he admitted. “Most reasonable people would agree we can’t get universal coverage in one step. Anything that we can do to move forward on an incremental basis is better than nothing I believe. I think that is what the Legislature has attempted to do this session. The Legislature wanted to go further but there is no money.”There is considerable discussion about H863 “AN ACT RELATING TO CREATION AND PRESERVATION OF AFFORDABLE HOUSING AND SMART GROWTH DEVELOPMENT.”The governor advanced an alternative, The Vermont Neighborhoods Bill. Marsh said the problem with the bill passed by the House “is it doesn’t allow for construction of needed homes to increase supply and reduce overall costs.”He said under this legislation “500 homes would be produced and the need is in the 12,000 home range, we need to balance demand and supply and control costs.”The Chamber said the Legislature “wants to contain housing to contiguous areas. We think there are areas of development that can be made without impacting the character of Vermont. We want to make it easier for more homes to be built.””What I heard on the floor of the house from developers,” said Klein, is “less regulation means more housing. That is a discussion most Vermonters don’t approve of anymore. We are well beyond that.”He said the Vermont Neighborhoods Bill, was a gut of Act 250. “What it did,” he explained, “was it took language from other programs tightly designed around their location. The program the administration offered was to let them build what they want where they want with no guaranteed of any affordability.””We are following H863 housing bill very closely,” said Francis with GBIC. Her group opposes the bill in its current form. “It offers very little gain for a lot of pain. We’re concerned the bill is too restrictive for the amount of land area that could be considered for regulatory relief and fee reduction. We would like to see more land area included for consideration of permit relief. It could be for commercial as well.”The current bill, said Francis, won’t result in any significant expansion of workforce housing. “This bill doesn’t have any money. It does have some tax credits for VFHA. There are no incentives for municipalities or the for-profit community to build.”Sam Matthews at Central Vermont Economic Development Corp has concerns with the bill. She is concerned the bill “doesn’t encourage new housing starts outside of state designated growth centers, meaning rural areas, which leaves the rural municipalities out of the equation.”Art Edelstein is a freelance writer from East Calais.